Google To Start Building Self-driving Cars

Google is to start building its own self-driving cars, rather than modifying vehicles built by other manufacturers.

The car will have a stop-go button but no controls, steering wheel or pedals.

Pictures of the Google vehicle show it looks like a city car with a “friendly” face, designed to make it seem non-threatening and help people accept self-driving technology.

Co-founder Sergey Brin revealed the plans at a conference in California.

“We’re really excited about this vehicle – it’s something that will allow us to really push the capabilities of self driving technology, and understand the limitations,” said Chris Urmson, director of the company’s self-driving project.

He added that the cars had the ability to “improve people’s lives by transforming mobility”.

But some researchers working in this field are investigating potential downsides to driverless car technology.

They believe they could make traffic and urban sprawl worse, as people accept longer commutes as they do not have to drive themselves.

Flexible windscreen

The BBC was given access to the Google team to talk about the secret project, and see early renderings of the car.

It looks almost cartoon-like, it has no traditional bonnet at the front, and the wheels are pushed to the corners.

Google self-drive carGoogle says it will initially build 100 prototype vehicles

It will seat two people, propulsion will be electric, and at the start it will be limited to 25mph (40km/h) to help ensure safety.

The most significant thing about the design is that it does not have any controls, apart from a stop/go button.

For early testing, extra controls will be fitted so one of Google’s test drivers can take over if there is a problem.

The controls will simply plug in, and Mr Urmson believes that over time, as confidence in the technology grows, they will be removed entirely.

The front end of the vehicle is designed to be safer for pedestrians, with a soft foam-like material where a traditional bumper would be, and a more flexible windscreen, which may help reduce injuries.

The vehicle will use a combination of laser and radar sensors along with camera data to drive autonomously.

It will depend on Google’s road maps, built specifically for the programme, and tested on the company’s current fleet of vehicles.

Google self-drive carGoogle says it expects its self-drive cars to be on the road ‘within a year’

Ready in a year

Google recently announced that its self driving cars had covered 700,000 miles of public roads in autonomous mode, and that they were now tackling the tricky problem of busy city streets.

The company plans to build a fleet of around 200 of the cars in Detroit, with the hope of using them as an autonomous technology test bed.

“We’ll see these vehicles on the road within the year,” says Mr Urmson.

Advocates claim that autonomous cars have the potential to revolutionise transport, by making roads safer, eliminating crashes, and decreasing congestion and pollution. In the year to June 2013, more than 23,500 people were killed or seriously injured in road traffic accidents in the UK,according to government figures.

Simulation of roadThe view from Google’s self-drive car and its computer during tests

Ron Medford, previously the deputy director of the US National Highway Traffic Safety Administration, and now the safety director for the self-driving car team at Google, believes that number could be drastically reduced by removing the chance of driver error.

“I think it has the potential to be the most important safety technology that the auto industry has ever seen,” he said.

But Sven Beiker, executive director of the Center for Automotive Research at Stanford, cautions that driverless cars may still require human input in extreme circumstances and that people may forget how to operate their vehicles if they do not do it regularly.

This could be particularly dangerous in an emergency situation where the computer does not know how to react, and asks for input from a human who may not have been paying attention, he warned.

“You will not be able to fiddle around looking for the instruction manual in the glove box that you’ve never looked at before,” he said.

He equates it to people who drive automatics forgetting how to easily drive a car with a manual gearbox.

Tesla : The 21st Century vs Auto Dealerships – The 20th Century

Congratulations to Tesla Investors

If you bought shares of Tesla in early 2013, and still own them, then first of all, you deserve a round of applause for having picked one of the biggest and ‘most-glamorous’ multi baggers of our time.

Kudos to you. Your investment is already up from a low of $34 in 2013 to a high of $265 in 2014. That’s more than 675% in just over a year. EvenWarren Buffett would be proud of you.

Since its IPO in June 2010, Tesla was up as much as 1200% at its peak. Currently sitting at around 860%.

THE FINANCIAL PAGE

SHUT UP AND DEAL

BY APRIL 21, 2014   The New Yorker

The electric-car company Tesla seems like everyone’s darling these days. Its stock, even amid a pervasive selloff in the tech sector, is up nearly forty per cent this year. It has announced plans to build a five-billion-dollar battery factory, which various Southwestern states are vying to host. And it’s now starting to sell cars in China. But there is one place where Tesla is getting no love: New Jersey. Last month, the state decreed that the company would have to shut down its showrooms. In doing so, New Jersey joined states like Texas and Arizona, where it’s effectively illegal to buy a Tesla. Pretty soon, you’ll be able to get a Model S in Beijing but not in Paramus.

Why was Tesla banned? It sold cars. It built showrooms where customers could check out a vehicle, arrange a test drive, and buy a car. The hitch was that Tesla sold cars directly to the public, without going through independent dealers. In most industries, this would hardly be a radical idea. Dell built its business on selling direct to consumers, and the most successful retail phenomenon of the past decade is the manufacturer-owned Apple Store. But the auto industry is different. In its early years, companies tried all kinds of ways of selling cars; you could buy them right at the factory, or at local department stores, or even from the Sears catalogue. But by the nineteen-twenties the industry’s major players had settled on a system of local, independently owned car dealers. Today, almost every new car in the U.S. is sold this way. In forty-eight states, direct sales by car manufacturers are restricted or legally prohibited, and manufacturers are often prevented from opening a dealership that would compete with existing ones. If Ford wanted to open a flagship store on Santa Monica Boulevard, it couldn’t.

Tesla, since it’s starting from scratch, has no existing dealers, and so in theory it isn’t encroaching on anyone’s turf. But auto dealers around the country have still been lobbying state governments to force the company to change its ways. Dealers like the existing system, and they don’t want other automakers to get any ideas. Fiona Scott Morton, an economics professor at Yale who has written extensively on car dealers, told me, “There isn’t a rational argument for why a new company should have to use dealers. It’s just dealers trying to protect their profits.”

Of course, no one involved presents it like this. State legislators insist that the status quo benefits consumers: the relevant Florida statute claims to be “providing consumer protection and fair trade.” We’re told that only independent dealers can guarantee service and warranty coverage. But look at the Apple Store: manufacturer-owned, and yet famous for the customer service and tech support provided at the Genius Bar. And while the argument is sometimes made that the use of independent dealers lowers prices, it’s hard to see how forcing Tesla to sell its cars through middlemen would make them cheaper. Indeed, a series of studies in the nineteen-eighties found that the various rules protecting dealers led to higher prices—six per cent higher, according to an estimate by the Federal Trade Commission. And in 2001 the Consumer Federation of America estimated that restrictive franchise laws could be costing consumers as much as twenty billion dollars a year. In any case, no one expects dealers to disappear. The question is whether automakers should be legally banned from trying out new ways to sell their cars.

It isn’t just auto dealers. State regulations are littered with provisions designed to protect incumbent businesses. In most states, retailers and restaurants have to buy alcohol from wholesalers rather than directly from producers. And there’s an ever-growing thicket of occupational licensing regulations. For some professions, a licensing requirement makes sense. But, according to a 2008 study, almost thirty per cent of jobs now require a license in some state or other, including many—auctioneer, shampooer, home-entertainment installer—where licensing seems totally unnecessary.

State governments have been looking out for local businesses since way back—in the nineteenth century, they forced travelling salesmen to pay extortionate fees—and they haven’t minded too much when this protectionism comes at the expense of consumers. Besides, as Scott Morton says, “dealers employ a lot of people and they generate a lot of sales-tax revenue, so they have great influence over state legislators.” Auto manufacturers, by contrast, are typically based out of state, while consumers are too amorphous a group to really exert much political pull. And, as the political scientist Mancur Olson famously noted, when the benefits of a regulation are concentrated and the costs are diffuse, the party that gets the benefits is almost certain to win.

Of course, you might ask, who really cares if some luxury-sedan maker has to sell through dealers? But what the New Jersey ban exemplifies is the tendency for businesses to use state power to divide the economy between insiders and outsiders. This discourages innovation, raises prices, and makes life hard for people trying to start new businesses—or even just get a new job. Does it really make sense to force someone, as Utah did until 2012, to go through two thousand hours of cosmetology training to work as a hair braider? Such statutes delegitimatize the idea of regulation, by making it look merely like a way for governments to indulge special interests. As the financial crisis showed, there are plenty of areas in real need of regulation. But maybe car buyers can take care of themselves. 

ILLUSTRATION: CHRISTOPH NIEMANN

Westport Innovations Inc. Continue To AVOID

WPRT : NASDAQ : US$16.91 WPT : TSX
AVOID

 Target: US$20.00

We have written about the research company that walks like an investment – and said avoid from – was it $40 down- despite the enthusiasm of Motley Fools- better to engage as a client of Jack A. Bass Managed funds is the lesson here.

COMPANY DESCRIPTION: Westport Innovations is a leading developer of technologies that allow engines to operate on gaseous fuels such as natural gas across light, medium, heavy and high horse power market applications.

Investment recommendation

AVOID

Macro challenges keep share volatility high, while the company works to introduce engine platforms and book orders in ‘14. The recent follow-on offering helps alleviate cash issues near-term ($210.6M cash at year-end vs. burn of $26.9M in Q4). While we continue to favor the strategy (and the nat gas macro), risk/reward stays balanced.
Investment highlights

 Few changes this quarter, as Westport finishes a challenging 2013 and looks to transition from R&D phase to increased product adoption in 2014 (with heightened focus on cost optimization and prioritized investments  goal of breakeven adjusted EBITDA for all three units by year-end).
 The outlook for 2014 implies solid growth (~7-13%), despite a ~$25M headwind from discontinuation of first generation HPDI (as focus turns to roll-out of HPDI 2.0 and expectation of improved warranty accruals – work underway with several OEMs currently).
 CWI and Weichai continue to grow nicely, with both JVs reporting record volumes for the year (2014 expected to benefit from ramp of ISX12G and build-out of additional capacity at Weichai). Early opportunities in rail/mining/marine also continue to progress nicely.
 Our 2014 revenue/EPS estimates go to $184M/$(1.80) from $241M/$(1.90); F2015 is introduced at $300M/$(0.90).
Valuation Our $20 price target (from $28) is derived by applying a 4x multiple to our 2015 sales estimate of $300M

Canadian Tire Corporation Ltd.

No Longer ” Crappy Tire” )

CTC.A : TSX : C$96.97
BUY 
Target: C$109.00 
COMPANY DESCRIPTION:
Canadian Tire is Canada’s most shopped general merchandise retailer, operating stores under the Canadian Tire, Mark’s, and PartSource banners. Through Canadian Tire Financial Services the company also manages a portfolio of credit card receivables.
All amounts in C$ unless otherwise noted.

Consumer & Retail — Merchandising
SOLID QUARTER, DIVIDEND RAISE WELL RECEIVED
Investment recommendation
We are reiterating our BUY rating and C$109.00 target price following Canadian Tire’s Q3/13 earnings results.
Investment highlights
 Canadian Tire reported Q3/13 earnings results on Thursday morning, before the market open. Revenue increased 4.5% YoY to $2,956 million. EPS of $1.79 was in-line with our estimate, and above consensus of $1.76 and last year at $1.61. The company also announced a 25% increase to its quarterly dividend to $1.75 per share.
 Retail appeared to be firing on all cylinders during the quarter, with healthy same-store sales growth at all banners. CTR, Forzani, and Mark’s delivered 2.0%, 6.3% and 4.3% increases in same-store sales, respectively. At CTFS, a 118 bps YoY decline in write-off rates to 5.74% allowed the company’s return on receivables to increase to 7.21% from 6.68% last year. EBT at CTFS increased to $80 million, up 8.5% YoY.
 Looking forward, we expect continued strength at the company’s Retail division as we head into the holiday season, with management noting that inventories remain in a healthy position in advance of Q4/13. Furthermore, we believe investors will focus on the potential announcement of a credit card partnership over the next 12 months which we believe should unlock meaningful cash for Canadian Tire.
Valuation
Our 12-month C$109.00 target price reflects our sum-of-the-parts valuation, whereby we value the company’s real estate, Retail division, and Financial Service division separately.

Linamar Corp. Raising Target Price To $43

LNR : TSX : C$35.67
BUY 
Target: C$43.00

COMPANY DESCRIPTION:
Linamar is a leading industrial manufacturer specializing in machined automotive components (mainly engine, transmission and other driveline components) and other industrial systems (aerial work platforms and related products, energy product assemblies, agricultural equipment assemblies). The company operates principally from Guelph, Canada but it has growing operations in Europe, the U.S., Mexico and Asia.
All amounts in C$ unless otherwise noted.

Transportation and Industrials — Auto Components
Q3/13: LARGE POSITIVE SURPRISE, FORECAST, TARGET BOOSTED
Continue to recommend BUYing for good growth potential
LNR remains attractive for a strong EPS growth profile from strong organic sales growth in its Powertrain/Drivetrain (P/D) automotive segment and sales growth and margin expansion in its Industrial segment.
Q3/13 results were consistent with this thesis and then some. We boosted our target on a slightly stronger mid-term forecast, powered by slightly stronger sales and margin assumptions, and our usual one-quarter valuation period roll forward.
Q3/13: large beat on sales and margins
EPS came in at $0.80, much stronger than our $0.64 forecast and the consensus mean estimate of $0.66. EPS was up a healthy 54% YOY.
LNR is clicking on most cylinders. P/D benefited from launches and strong industry volumes. Industrial continues to rebound but remains below potential. P/D sales and margins and Industrial margins all came in stronger than we expected.
LNR guided to very strong margins in 2014 (in the same ballpark as the very strong 2013 margins). This was a large upside surprise. Sales expectations are good too.
We boosted our 2014 forecast on the margin guidance upside surprise. Mid-term prospects appear relatively unchanged, suggesting an eventual margin decline at P/D. Our mid-term forecast is only slightly stronger.
Premium valuation given growth and industry outlook
We continue to value LNR at 5.75x EV/NTM EBITDA (5.75x Q3/14E EV to Q4/14E – Q3/15E EBITDA), which is about 0.75x higher than normal. We are using a premium multiple given LNR’s growth and excellent industry fundamentals.

Atmel Corporation

ATML : NASDAQ : US$6.58
BUY 
Target: US$9.00

COMPANY DESCRIPTION:
Atmel Corporation designs, develops, manufactures and sells a broad range of advanced logic, microcontroller,
nonvolatile memory, radio frequency (RF), and capacitive touch solutions. The company’s products are designed for
use in the automotive, communications, computing/storage/printing, consumer electronics , industrial/military/aerospace, and security end markets

REITERATE BUY ON MARGIN EXPANSION
Investment recommendation
We reiterate a BUY ahead of what we believe is likely to be strong gross margin expansion. Q4 gross margins are guided up Q/Q due to higher utilization rates and continued cost reduction efforts. Management expects gross margins to continue to improve in 2014 as utilization improves; they control operating costs and use up the higher cost inventory from the take or pay foundry agreements. We are slightly adjusting our estimates and maintain a $9 target.
Investment highlights
 ATML reported Q3/13A (Sep) after the close. Revenues and non- GAAP EPS were $356.3 million (+2% Q/Q) and $0.09, compared to our inline estimates of $357 million and $0.09. Revenue was slightly below the mid-point of guidance ($348M to $365M)
 Management guided revenue to be in the range of $340 million to $364 million ($357 million mid-point), compared to consensus estimate of $365 million and our estimate of $359 million. Management expects MCU to be flat Q/Q with maxTouch down low single digits and core MCU up single digits, ASIC to be down low double digits, Memory down mid to high single digits and RF & Automotive up low single digits.
 Atmel’s board authorized an additional $300M to the existing $700M stock repurchase program, of which ATML has repurchased approximately $636.3M (72.1M shares) of its common stock

Westport : Relying on Motley Fool PR and Cramer

English: CNBC’s “Mad Money with Jim Cramer” ca...

English: CNBC’s “Mad Money with Jim Cramer” came to Tulane University’s Freeman School of Business Oct. 19, 2010 to broadcast in front of a live audience as part of the show’s “Back to School Tour.” (Photo credit: Wikipedia)

As noted here there is a long term trend to natural gas as a real alternative to oil. However, Motley Fool ( in a run up to $40) and so many others have urged investors to climb aboard before the train is ready to leave the station. by that i mean that there is still little infrastructure to support natural gas vehicles on the road. the long term trend is in – profits are still years away .

  • Westport Innovations (WPRT +0.8%) enjoys a bump after Jim Cramer says WPRT iswell positioned as more trucks turn to natural gas.
  • CEO David Demmers tells Cramer that just 1% of all trucks in the U.S. are running on natural gas, but the trendline points to growth; many in the industry are racing to build the proper infrastructure to meet expected demand. (video)
  • Nat gas is cleaner and cheaper than diesel, and wide availability in the U.S. and China will make it a popular energy source for years to come, the CEO says.
  • WPRT also has a strong partnership with Ford, with its technology included in 11 vehicles and in the F-150 starting next year.

WESTPORT INNOVATIONS INC(WPRT:NASDAQ, US)

BuySell
27.56USDIncrease0.22(0.80%)Volume:
Above Average
As of 04 Sep 2013 at 11:36 AM EDT.
S

QUOTE DETAILS

Open 27.26 P/E Ratio (TTM)
Last Bid/Size 27.52 / 1 EPS (TTM)
Last Ask/Size 27.60 / 3 Next Earnings
Previous Close 27.34 Beta
Volume 300,264 Last Dividend
Average Volume 386,347 Dividend Yield 0.00%
Day High 27.65 Ex-Dividend Date
Day Low 27.05 Shares Outstanding 56.5M
52 Week High 35.40 # of Floating Shares
52 Week Low 23.01 Short Interest as % of Float
chart

Magna International Inc. A Growth Story

Mila (concept car division of Magna-Steyr) Alp...

Mila (concept car division of Magna-Steyr) Alpin, 2008, seen at MOTOR SHOW ESSEN 2010 (Photo credit: Wikipedia)

MGA : NYSE : US$81.16
MG : TSX : C$83.90
BUY
Target: US$89.00

COMPANY DESCRIPTION:
Magna is a one of the world’s largest and most diversified Tier 1 automotive components suppliers, active in 25 countries. The company also provides complete vehicle assembly services through its subsidiary, Magna Steyr.
All amounts in US$ unless otherwise noted.

BUY for strong growth story
We continue to recommend BUYing MGA to benefit from good EPS growth from modest sales growth, margin expansion and share buy backs. Margins should especially benefit from European and eventually emerging market (Rest of World or ROW) operating improvements and lower new facility costs.
Net, we expect these factors to drive low double-digit EPS growth/year. 
Management meetings reconfirm growth potential

Highlights include:
 European margin improvement could happen faster than expected,  There is upside potential to MGA’s European margin improvement target,
 MGA’s product mix seems likely to evolve, but we do not expect it to change substantially, as MGA is already a leader in most of its product areas, and
 We expect free cash flows to be spent on acquisitions and/or share buy backs, which should drive EPS growth. We expect acquisition discipline and acquisition opportunities to be lower.
High valuation, but supported by positive growth dynamics MGA’s valuation remains on the high side (see valuation section), but we think it can remain there given positive industry and company dynamics. Such dynamics support good EPS growth and the potential for upside surprises and positive forecast revisions, as per this quarter.
We have maintained our valuation multiple at 6.0x EV/NTM EBITDA, a roughly 1x multiple premium to MGA’s normal range given the positive growth dynamic thesis. The resulting target is moderately above our $83.27 DCF analysis.

Magna International Inc. BUY Target $ 75

Mila (concept car division of Magna-Steyr) Alp...

Mila (concept car division of Magna-Steyr) Alpin, 2008, seen at MOTOR SHOW ESSEN 2010 (Photo credit: Wikipedia)

MGA : NYSE : US$64.71
MG : TSX
BUY
Target: US$75.00

COMPANY DESCRIPTION:
Magna is a one of the world’s largest and most diversified Tier 1 automotive components suppliers, active in 25 countries. The company also provides
complete vehicle assembly services through its subsidiary, Magna Steyr.

Substantial Q1/13 upside surprise, guidance increased MGA reported EPS of $1.57, ahead of our $1.44 and the consensus mean $1.44. Positive surprises versus our forecast were on European sales and margins. 2013 guidance was also modestly increased.
We boosted our near-term forecast slightly given the guidance and boosted our mid-term forecast more significantly to model better European margins (but consistent with management’s goals). EPS was also boosted by our assumption that all of MGA’s current 12 million share buy back will be utilized, per management’s commentary.
Solid EPS growth expected
MGA produced 18% EPS growth in 2012 from strong North American sales and improved European margins. We forecast annual EPS growth
to slow to high single-digit to low double-digit rates through mid-decade from expectations of slowing industry growth in North America,
eventual gradual recovery in Europe, and modest margin expansion. Solid upside, with additional potential
We continue to recommend BUYing MGA for solid EPS growth, modest multiple expansion, and the potential for additional value creation from
cash deployment and/or business streamlining.
We expect EPS growth from forecast low- to mid-single-digit sales growth, based on booked business and gradual margin improvements in
Europe and Rest of World (ROW) segments.
We have boosted our valuation 0.5x to a 5.5x EV/NTM EBITDA multiple, as we think there is increasing investor interest in consumer growth
cyclical stocks like MGA. Our valuation and target is supported by our $77.61 DCF analysis.
Our target was boosted nicely (17%) this quarter based on the forecast increase, benefit from our usual one-quarter valuation period roll forward,
and the valuation boost.

Magna International Inc.

Mila (concept car division of Magna-Steyr) Alp...

Mila (concept car division of Magna-Steyr) Alpin, 2008, seen at MOTOR SHOW ESSEN 2010 (Photo credit: Wikipedia)

Nov. 9

Magna International Inc.

MGA  NYSE  $ 44.67

MG  TSX

 

COMPANY DESCRIPTION:
Magna is a one of the world’s largest and most diversified Tier 1 automotive components suppliers, active in 25 countries. The company also provides complete vehicle assembly services through its subsidiary, Magna Steyr.

BUY for attractive valuation, but growth looks limited
MGA has been a strong share price performer in 2012, in part due to nice EPS growth and more so from valuation expansion. We think the stock has more valuation expansion potential, although this may be limited by sector valuations. We believe EPS growth is set to slow.
Our forecast was increased in this report due to company specific adjustments, which contributed to the increase in our target price. We think the share price appreciation potential remains attractive assuming a relatively normal 5x EV/NTM EBITDA multiple. Our target is supported by our $68.42 DCF.
Beat on Rest of World (ROW) EBIT; guidance raised
MGA reported EPS of $1.13, ahead of our $1.05 estimate and the consensus mean of $1.01. MGA’s 2012 sales guidance was stronger than we expected and we adjusted our Q4/12 forecast slightly higher.
After reviewing Q3/12 results and guidance and assessing trends, we boosted our sales forecast and North American and ROW margins.
Slowing EPS growth expected in next couple of years
We believe MGA is on track for solid double-digit EPS growth in 2012 from strong North American sales and improved European margins. We forecast high-single-digit annual EPS growth from 2012-14 due to slowing industry growth in North America and industry weakness in Europe. We expect these factors to limit sales growth and margin expansion.
Looks inexpensive, but normal valuation spread relative to the group
MGA’s valuation looks attractive relative to its historical multiples and DCF, but normal relative to the group. We think this suggests the potential for an upward bias in valuation, but the upside potential is probably limited by group valuation moves.

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