Bank of America Corp (BAC), Ford Motor Company (F): Kids Won’t Stay At Home; They Will Buy a Home

Page 1 of 2

I found myself laughing at this Yahoo! Inc. (NASDAQ:YHOO) article that depicts those who are 16 to 34-years of age. The millennial generation (me being one of them) is a a group of kids who live in front of four inch screens, has to screen shot everything that goes on (Instagram,) and live at home with parents (this actually sucks.) Now, that doesn’t mean all millennials live at home with mom and dad, but a lot of them do.

Bank of America Corp (NYSE:BAC)

Trends in teenagers

I think the most interesting things that the author, Rick Newman, brings out is the fact that the percentage of 16 to 24-year-olds with driver license declined below 70% for the first time since 1963. The point is, kids are not buying cars and not buying homes. Much of it may have to do with the fact that the unemployment rate is 16.1% for 16 to 24-year-olds. So these younger consumers are substantially more budget conscious, and have to adhere to better spending principles.

The up-trend

Source: Ycharts

So the data seems a little crazy. But basically over the past three years we have seen three trends emerge: Durable goods new orders are on the rise as shown above. The overall population has grown by about 2.2% over the past 3 years, meaning that the increase in demand for durable goods is primarily driven by older laborers returning to the labor force and buying things like cars, homes, and etc. This is excellent news because in a trickle-down-economy, older people will eventually lift the younger people into the workforce. So for now, durable good demand is primarily driven by people who were unemployed and now re-employed. If anything, the younger generation will eventually be a part of the labor force and will increase consumption of durable goods.

Buy property, lending, and cars

I believe that the housing market is unquestionably on the mend, and it is likely to turn around. KB Home (NYSE:KBH) should be a compelling investment opportunity that investors should pursue. The company grew Q1 2013 revenues to $405 million versus the $254 million in revenue in 2012. The growth in revenues was drive by a strengthening economy paired with an increase in the average selling price of homes. The company’s selling price of homes jumped from $219,000 to $271,000 between the first quarter of 2012 to the first quarter of 2013.

Analysts on a consensus basis anticipate the company to grow earnings by 136% in fiscal year 2013, implying substantial upside potential for those who are patient enough to buy into this homebuilder.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!