Select Comfort Coupons

Vehicles with Modest Depreciation Rates Highlight NADAguides' Top Recommended Buys

NADAguides Top Recommended Current Buys Report includes six vehicles from five different nameplates.

The six 2011 models included are from Acura, Dodge, GMC, Hyundai and Toyota. In light of a slowly recovering economy, current fuel prices and strains on some vehicle availability from Japanese manufacturers, NADAguides’ analysts recommend this select set of new units that — based upon specific criteria important to new-vehicle shoppers — are excellent options during a time when many uncontrollable market factors are affecting vehicle-buying decisions.

The specific models are the Acura TL, Dodge Challenger R/T, GMC Terrain SLE-2, Hyundai Azera Limited, Toyota Tacoma Double Cab V6 Manual and the Toyota Venza I4 AWD.

NADAguides reiterated that its Top Recommended Current Buys are competitively priced, offer incentives and rebates or other features that add value to the vehicle, offer a low first-year depreciation rate and maintain their value better than others.

Additionally, NADAguides reviewed the days’ supply of these vehicles to ensure each had sustainable dealer inventory currently on lots.

Troy Snyder, director of product development at NADAguides, began to explain the latest report by insisting, “The results of our most recent Car Buyer’s Market Report show a healthy mix from diverse manufacturers across several segments.

“There are numerous factors influencing car shoppers today, and in some cases, car research and purchasing a vehicle has become unattractive to consumers,” Snyder acknowledged. “The Car Buyer’s Market Report is intended to sort through the clutter and provide car shoppers with a clear view of the best vehicles for the money that are currently available at local lots.

“Lower incentives and mixed economic news have stinted new-car sales in recent months, but rest assured, there are deals currently available at local lots on some phenomenal vehicles and we have the list,” he declared.

NADAguides went into more detail about why it selected each specific unit.

2011 Acura TL

Analysts included this unit based on the vehicle’s first-year depreciation rate of 19 percent, its estimated 22 miles per gallon combined fuel efficiency, great customer financing incentives and its abundance of safety and comfort features.

NADAguides said Acura is currently offering 1.9 percent financing for 36 months, and 2.9 percent on either 48 or 60 months.

Momentum Stock: Select Comfort Corp

Has been a momentum high flier in 2011, coming close to doubling in price after recently topping off at $17.35. But with estimates on the rise and a bullish growth projection, this Zacks #1 rank stock offers a comfortable take on momentum.

Company Description

Select Comfort Corp develops and sells adjustable firmness beds and various sleep related accessories in the United States, Canada and Australia. The company was founded in 1987 and has a market cap of $950 million.

Select comfort has been pumping out big gains in 2011, recently hitting a new multi-year high after reporting another strong quarter that came in well ahead of expectations.

First-Quarter Results

Revenue for the period was up 22% from last year to $193 million. Earnings also came in strong at 30 cents, 58% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 41% over the last four quarters.

The good results were driven by a sharp up tick in company-owned store sales, which were up 26% from last year, with average sales per store climbing to $1.4 million, also a 26% increase. And even though sales and marketing expenses increased 15% from last year, as a percentage of sales that number fell to 42% from 44%.

Financial Profile

Moving forward, Select Comfort will continue to benefit from its awesome balance sheet, with cash and short-term investments up $58 million from last year to $102 million against no long-term debt.

Estimates

We saw some very bullish movement in estimates off the good quarter, with the current year jumping 27% to 90 cents. The next-year estimate is up 24 cents in the same time to $1.08, a bullish 20% growth projection.

Valuation

But in spite of the gains, this stock still has value, trading with a PEG ratio of .95, below the traditional benchmark for value of 1.

12-Month Chart

On the chart, shares have been strong for all of 2011, jumping into a new multi-year high in late April on the good quarter. Look for support from the long-term trend on any weakness. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.