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  • Audi ‘15 A8 Is A 868-Mile-Range Tesla-Killer, And Diesel Is The Secret

    NEW YORK (TheStreet) — Are you in the market for a $100,000 limo that can go 868 miles without stopping, and that can be refueled 100% in five minutes?  Audi has good news for you. I recently had the opportunity to drive the 2015 Audi A8, which is a large limousine with four-wheel drive as standard, ideal for snow and the mountains.  It is Audi’s new flagship sedan, and it has an amazing range and ability to refuel from any of… What’s even more amazing, if my initial test results were to hold up, is that it could cost as little as $1,200 per year to operate, in terms of fuel cost only.  So what is the secret between this automotive wonder? It’s diesel. Audi’s 2015 A8 diesel is rated by the Environmental Protection Agency at 24 miles per gallon city, 36 mpg highway.  However, as has become a popular refrain among diesel cars, real-world performance typically exceeds the EPA numbers.  In my case, I achieved a whopping 40 mpg in mixed driving, including idling and city traffic. 40 mpg in mixed driving is a very good number, beaten only by Toyota’s (TM) Prius and a small number of other cars.  However, this is no econo-box or midsize sedan.  It’s not even a regular large car. This is a flagship limousine with rear seat space fit for Queen Elizabeth in a celebratory parade — if she were German.  The overall luxury and interior comfort of the Audi A8 is to the Tesla  (TSLA) Model S what Buckingham Palace is to a Burger King (BKW). Unlike in the Tesla, the Audi A8 lets you depart and drive in any direction you want, without having to plan carefully for those few locations where you can charge electrically relatively quickly (212 miles of range in 30 minutes).  In addition, you’re not worried about whether there will be a line ahead of you with other drivers waiting to take their 30-minute turn at charging their cars before you do. You can also turn up the heat to the max, without having to see the remaining range deplete at an alarming rate.  That alone might be the deciding purchase factor. About that cost of operation: In the event that the Audi A8 diesel were to actually achieve 40 mpg in an annualized real-life experience as opposed to a day’s test drive, the annual fuel cost could be $1,200.  Basically, the average American’s annual 12,000 miles driven, divided by 40 mpg, is 300 gallons.  Multiply by $4 per gallon and you have $1,200. Annual fuel cost of $1,200 is very low compared with depreciation on a $100,000 car.  In an electric car, you also have the unique component of a big battery, which loses meaningful capacity every year, unlike an internal combustion engine. In an electric car with 265 miles of range, that battery is often reported as costing $30,000, which is subject to a variety of caveats, but still. Let’s assume that the battery salvage value after 10 years is $10,000.  That means you will have depreciated $20,000 over 10 years, or $2,000 per year. But the Audi A8 diesel’s annual fuel cost could be as low as $1,200.  In other words, even if you assume that the cost of electricity is zero, that $100,000 electric car is already more expensive to run than this 40 mpg diesel limo from Audi. Actually, while we’re at it, let’s estimate the annual electricity cost to run that large $100,000 electric car for a year.  A car like that can go approximately 3 miles per kWh.  For the 12,000 mile per year average, that means 4,000 kWh.  At the nationwide average of 12 cents per kWh, that means $480 per year.  Add to the $2,000 annual battery depreciation, and you have $2,480 in annual operating cost, exclusive of depreciation and service. That dollar figure is still peanuts compared with all sorts of things, including the total cost of ownership of the car, but nevertheless:  $2,480 for the Tesla versus $1,200 for the Audi A8 diesel.  That’s twice the money — for a car with one-third the range and much longer refueling times, from far fewer charging stations.  In other words, the Audi A8 obliterates the Tesla in all the most relevant comparisons: cost of operation, range, refueling time and convenience. As a result, it goes without saying that Audi isn’t worried about competition from Tesla.  Instead, the Audi A8’s main competition comes from the other large limousines with spacious and comfortable rear seats. The primary competition is BMW 7-series and Mercedes S-Class.  Right behind those are the Lexus LS, Hyundai Equus and Kia K900. The three factors that set the Audi A8 apart are: 1.  Standard four-wheel drive.  The other main competitors are rear-wheel drive in some models, and four wheel drive in others, or as an option.  Audi is four-wheel drive from the ground up. 2.  At 4,564 pounds, the Audi A8 diesel is lighter than the BMW and Mercedes models.  The BMW 740 diesel is 4,685 pounds, and the Mercedes 4x4 gasoline S550 is 4,773 pounds.  Mercedes has not yet started selling a diesel version of its all-new S-class in the U.S.  The Tesla is 4,673 pounds. 3.  Superior fuel economy.  BMW offers the only direct competitor in the U.S. market right now, and it is EPA highway-rated at 5 mpg less than the Audi A8 diesel. When it comes to this flagship limousine class, it would be painful to declare one of these BMWs, Audis or Mercedes to be objectively “better” than the next.  They all drive like a dream and have the ultimate seat comfort and space.  At this altitude of automotive excellence, it is just as much a matter of taste as it is about objective measurements. Still, I find that I have to give the nod to the Audi A8 diesel at this point in time.  The reasons are mainly twofold: 1.  As mentioned earlier, the superior fuel economy.  Driving this ultra-luxurious limousine fit for royals and billionaires, while getting almost Prius-like fuel economy, is an automotive achievement of Olympian proportions.  It certainly punctuates the idea of Tesla being a rational luxury car choice. 2.  The infotainment system is the tallest of the midgets.  While I find no pleasure in almost any automotive infotainment system, Audi has some of the least bad ones.  The integration with Google Maps and Google Earth is excellent, providing some of the very best navigation in the industry. Actually, the infotainment system is an area where I do think Tesla has an advantage.  One can debate the merits of a large touch-screen versus this knob-and-button control of a remote display forever, but on balance I find that I prefer Tesla’s approach.  Most people I have seen in side-by-side comparisons tend to agree with me on this Tesla advantage. The Audi A8 diesel has a base price of $86,025 including destination.  Adding all the options that one really wants in a car of this stature, I get to $96,375. As for the Tesla, it starts at $81,070 including destination.  Equipping it to a reasonable level, essentially equivalent to the Audi whenever possible, I get to $98,270.  Of course, depending on your tax situation and the state in which you live, a Tesla may yield you subsidies effectively subtracting from this price.  This is, of course, courtesy of Audi buyers having to subsidize consumption of Tesla cars. To summarize, the Audi A8 diesel beats the pants off the Tesla in the most relevant categories for a luxury limousine: — Up to 868 miles of range versus 265 miles. — Refuel 868 miles in 5 minutes versus 212 miles in 30 minutes. — Ability to fuel almost anywhere at the drop of a hat. — Annual fuel cost an estimated 50% less, when including estimated battery depreciation. — A more luxurious and comfortable interior. — When it’s cold outside, you can be warm without sacrificing range. — Four-wheel drive, ideal for snow and mountains. There is no question that the drivetrain smoothness and responsiveness of almost any electric car is superior to an internal combustion engine, experienced mostly in city traffic.  There is no getting around that.  However, it is also the case that there is a price for everything. In my analysis, the advantages of this 2015 Audi A8 diesel vastly outweigh the benefits of an electric car as they exist with today’s battery and recharging technology.  This may change in the future, and the equation is already different where diesel is $8 per gallon instead of $4 per gallon. In the meantime, imagine this:  What would be the impact if Audi had a CEO with as many Twitter followers as Elon Musk?

    TheStreet.com a week ago respond

  • 5 Dividend Stocks That Want To Pay You More In 2014

    Factoring in dividends to this year’s return numbers, the S&P’s gains sit at 6.96% so far, a 20% boost vs. the plain price gains alone. So, yes, dividends clearly matter for your total returns this year. But to find the biggest gains, it’s not… So instead of chasing yield, we’ll try to step in front of the next round of stock payout hikes. >>5 Stocks With Big Insider Buying For our purposes, that “crystal ball” is composed of a few factors: namely a solid balance sheet, low payout ratio and a history of dividend hikes. While those items don’t guarantee dividend announcements in the next month or three, they do dramatically increase the odds that management will hike their cash payouts to shareholders. Without further ado, here’s a look at five stocks that could be about to increase their dividend payments in the next quarter.

    TheStreet.com a week ago respond

  • When Will The Stock Market Avalanche Finally Happen?

    For example, on Friday, June 28, 2013, the S&P 500 Trust Series ETF (SPY) volume was 160.1 million shares traded. One year later, today, the SPY volume is 68.5 million shares. Old Wall Street pundits will tell you that it does not matter anymore. It is different this time. If you believe that sentiment, good luck to you as we move forward. This stock market is one geopolitical event away from a catastrophic collapse. The Federal Reserve balance sheet is at $4.4 trillion. That is over 25% of the Gross Domestic Product. Consensus macro remains way too high on its GDP estimates for 2014,… The CRB Food Index is up 23.5% for the year to date. There is a total disconnect between the stock market and economic reality out there. I will continue to pound the table and tell you traders and investors that it is not different this time. The negative geopolitical events happening worldwide are being ignored by the stock market. The U.S. dollar continues to burn with the Fed policies that are in place. President Putin of Russia will meet with the Argentine president in July. Does this sound like maybe, just maybe, they will discuss an anti-dollar alliance? Folks, take notice. Old Wall Street is not telling you what is really going on out there as the Fed continues to inflate a massive bubble. It will only take one event to cause the avalanche that will be unprecedented in nature. After all that, I came into trading on Friday with Apple  (AAPL) as a long position. On Wednesday my algorithm gave me an extremely oversold signal. I sold AAPL on Friday at nearly a 2% gain. That’s how we roll at www.strategicstocktrade.com. We buy on the oversold signal and short on the overbought signal. Risk management is so critical at the present time. You need that process. The stock market is not in sync with economic reality. At the time of publication the author had no position in any of the stocks mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff. >>Why Apple Decided to Introduce New iPods

    TheStreet.com a week ago respond

  • Here’s Why An Apple iWatch Will Be A Big Hit With Consumers

    I’d like to take the other side of the argument and explain why the iWatch would be a big hit. (Remember, Apple has yet to announce such a product, but there has been plenty of detailed reporting by reliable news organizations suggesting a launch is… How other smart watches have done so far has no predictive value for how Apple’s smart watch will do. We’ve seen this movie before. Hyper-skepticism greeted the “Jesus Phone” — otherwise known as the iPhone — back in 2007. People argued that Apple had no appreciation for how to sell phones through carriers. Even more skepticism greeted the iPad. Many scoffed at the name at launch. Several pointed to the poor results of other companies’ tablet introductions, some of which were rushed to the market to beat Apple’s tablet on to store shelves. Yet people proved that they only knew they wanted the iPad once they saw it and tried it in action. Why wouldn’t the same be true with the iWatch? People don’t know what they want until they use it. We can do all the surveys of potential customers that we want. We can say: “Do you want to buy Apple’s iWatch, which we think will retail for $350?” But how can anyone really answer this question? They might think they know what an iWatch is going to be, but of course they have no idea. Apple has always had it in its DNA to figure out what customers want rather than asking them what they want. It turns out that customers have no idea what they want. The only thing they know about smart watches so far are things like Pebble and Samsung’s Gear watch. But Apple’s version will probably be much different from either of those offerings. Even so, there was a recent survey that said 14% of “watch wearers” would pay $350 for an iWatch. This is bullish for Apple. Who is a watch wearer? It’s probably a minority of the population now. Tim Cook himself said at the D conference over a year ago that the most popular watch these days for telling the time is the smartphone. So, whoever is still wearing a watch is probably a consumer that is older and more stuck in the past rather than the most technology-savvy person. Even so, 14% of these fuddy-duddies said they’d buy the new iWatch, sight unseen. Again, if history is a guide, once people actually see the Apple iWatch in action, they’ll find it much more appealing than they think it is going to be. Let’s assume that once folks see it, double the surveyed number will want one. That’s 28% of about one-third of the population who still wears a watch. That’s about 30 million potential iWatch sales just in the U.S. What would constitute a good iWatch launch? Apple has suggested it is making 5 million iWatches for the initial launch. The big opportunity for Apple selling iWatches is not current watch users but current iOS users. Let’s face it, anyone with a current iOS device is going to be very interested in adding the iWatch to his or her collection. Presumably it will be well-stitched to the iPhone and other iDevices coming online such as stuff in the car and home. Apple is selling about 200 million iPhones a year. Can it sell about one-third of those buyers an iWatch? That’s another 67 million iWatches a year, right there. If you believe it’s possible that Apple can sell 80 million iWatches in its first year, that would be a huge success in comparison to its other products. The poor old iPods are now down to selling about 10 million units a year. The iPads seem to have hit a wall in terms of new growth and are now selling about 60 million a year or 200 million units since they launched. Even if Apple can sell only 30 million iWatches in the product’s first year, it would be a big revenue contributor to the company. The consensus thinking seems to be that iWatches will retail for around $350. I’m not sure it will be that high. Let’s say it’s only $250 a phone to make it more attractive. At 30 million units, that’s $7.5 billion in incremental revenue for Apple. Apple is doing about $175 billion a year in revenue. So that’s about an increase of 4.2% in Apple revenue thanks to the iWatch. That might not sound like a lot to you but it would be needle-moving number. Basically, it appears that Apple should be able to sell just as many iWatches annually as it sells iPads. If that’s true, that’s a home run new product introduction.

    TheStreet.com a week ago respond

  • United Should Close Dulles Hub, Analyst Says, As He Cuts Rating

    “Importantly, during those four years, Delta and American will be similarly working to increase earnings,” he wrote. Year-to-date, United shares are up 10%, while Delta shares are up 43% and American shares are up 76%. McAdoo panned the presentation United executives made at a November investor day event, where they outlined a $2 billion program of cost and revenue improvements. Read: 3 Little Known Credit Card Tips for Summer Travel It “seemed more likely to be found in a typical operating department’s annual budget presentation than in a corporate presentation as to how United’s results would be lifted to record levels,” he wrote, noting that adjustments such as reducing… What United should do, McAdoo argued, is to close the Dulles hub, given its proximity to the hub in Newark, N.J. Other airlines have realized synergies by closing hubs that are close together, he said, and United has already moved to close its redundant Cleveland hub. Moreover, local passengers to Washington generally prefer to fly to US Airways’ hub at Reagan National. McAdoo estimated that at best, Dulles flights can get only 20% to 30% of local traffic to Washington. “United would not operate two payroll departments, so we wonder why it would operate two hubs only 211 miles apart?” McAdoo asked. “Both hubs connect traffic from the eastern third of the country to Europe (and) connect north/south domestic traffic. By eliminating the smaller of the two hubs, United would see outsized savings and improved profitability across the entire United route network.” Read: Boeing Receives Multimillion Dollar Contract from Belavia Airlines The Washington hub was created to compete with Continental’s Newark hub. The two airlines merged in 2010, yet “almost four years after the merger, it is still competing,” McAdoo said. “Today the Dulles hub is the smallest in the northeast, carrying fewer passengers to Europe than Newark, than Delta at JFK or American Airlines/US Airways in Philadelphia.” In fact, Newark, with 32 daily departures to Europe, is the largest and strongest of the four. Yet curiously, United flies Boeing (BA) 757s on two-thirds of its flights to Europe. “Typically a carrier would place its largest aircraft in its largest hub, especially if the hub were slot-limited,” McAdoo wrote. “By upgauging these aircraft, we believe United would be able to move traffic currently connecting to Europe over IAD to EWR. “United’s cuts in Cleveland set the standard for whether to unwind the Washington Dulles hub,” McAdoo noted. In Cleveland, he said, 17 markets with less than 10 local passengers per flight and 16 markets with generally 11 to 30 local passengers per flight were eliminated as of next month. Using the same metrics in Dulles, 65 spoke routes would be cut.

    TheStreet.com a week ago respond

  • A Beaten-Down Biotech Stock Poised For An Epic Short Squeeze

    Just last week, I flagged shares of small-cap biotechnology player Geron (GERN) as a short-squeeze candidate at around $2.10 a share. Shares of GERN didn’t wait long to get that short squeeze started. The stock exploded higher that same day and the… Another biotech that absolutely annihilated the short-sellers last week was Karyopharm Therapeutics (KPTI), which exploded higher by over 90% after Wall Street cheered its release of its initial phase I data for Selinexor. I flagged this stock stock in June 3’s “3 Big-Volume Stocks in Breakout Territory” at around $26.50 a share. KaPTI tagged an intraday high of $47.98 a share last week on monster upside volume. >>5 Toxic Stocks You Should Sell This Summer I love spotting hot biotech stocks that have the potential to make big moves and squeeze the shorts. The next biopharmaceutical player that’s setting up from a technical perspective to put a big hurting on the short-sellers is Endocyte (ECYT), which develops targeted therapies for the treatment of cancer and inflammatory diseases in the U.S. Shares of Endocyte plunged back on May 2 by a whopping 62% after the company said it was halting its phase III study for vintafolide. The company decided to stop the study after it failed to show efficiency when treating patients with platinum-resistant ovarian cancer. That was a surprise to Wall Street, especially since a recent trial Endocyte had conducted for non-small-cell lung cancer had shown favorable data. That phase III failure and subsequent collapse in the stock price for Endocyte has now created a unique opportunity, since the company is running trials for vintafolide as a treatment for lung cancer. That trial is currently in phase IIb testing, and key data results could come out at the end of 2014. RBC Capital Markets analyst Adnan Butt recently said that the lung cancer indication is the most important one because the market is bigger. >>5 Stocks Poised for Breakouts

    TheStreet.com 3 weeks ago respond

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