Q. I'd like your opinion of Honda Motor Co. stock, in light of all that has gone on in the auto industry? - BR, via the Internet

A. The latest indication that green technology is key to the company's future is the new EV-neo electric motorbike that will be leased to businesses in Japan in December.

The company already sells gasoline-electric hybrid vehicles such as the Insight car and the limited-availability FCX Clarity hydrogen powered fuel-cell car. It expects to sell 500,000 hybrids a year within a few years. An increase in gas prices would boost the premium paid for such vehicles.

Shorter-term, Japan's No.2 carmaker must work to ensure consumer trust in Japanese quality, overcoming No.1 Toyota's highly-publicised problems and its own large-scale vehicle recalls. Honda CEO Takanobu Ito has said of the news coverage of rival Toyota: "We have a concern that it may lead to customers' perceptions of Japanese carmakers altogether as negative."

Global vehicle overcapacity, cyclical sales trends, steel prices, currency fluctuations and stricter environmental laws are problems affecting automakers.

Honda stock is up four percent this year following last year's 59 percent rise. The company significantly raised its profit estimate for the fiscal year that ended March 31, based on its cost-cutting efforts and improved Asian sales.

The sales of Honda cars in the US - which accounts for more than half of its worldwide car sales - have risen lately as the overall auto industry benefited from a strengthening economy and buyer incentives. Honda uncharacteristically has offered leases with no down payment, no security deposit and no payment for the first month across nearly its entire lineup.

Honda and Subaru were named the best all-around vehicle makers in the Consumer Reports annual auto issue, while Honda's CR-V, Fit and Ridgeline led their categories in dependability in the latest JD Power and Associates study.

Cars represent about 77 percent of Honda revenue and motorcycles 14 percent, with the rest divided between power products and financial services. The firm also makes robots and private jets. Honda's US market share rose to more than 11 percent last year, moving ahead of Chrysler Corp.

The only Honda stock analyst who is tracked by Thomson Reuters gives it a "hold" recommendation. The company has solid finances with little debt and an A-plus credit rating. Honda earnings are expected to rise 11 percent in the fiscal year that began in April, with a projected five-year annualised growth rate of 28 percent.

Q. We're wondering if Fidelity Trend Fund is worth holding or out of date? - PJ, via the Internet

A. As its name implies, this fund's premise from its 1958 launch has been to capitalise on trends in the marketplace. It rode the wave of popular growth companies such as Apple and Google, as well as some less-known firms.

The $817 million Fidelity Trend Fund is up 53 percent over the past 12 months to rank in the top 10 percent of large growth funds. Its relatively flat three-year annualised return places it in the upper one-fourth of its peers.

"I have a hold rating on Fidelity Trend because there are other managers I simply like more at this moment in the economic and market cycle," said Jim Lowell, editor of the independent Fidelity Investor newsletter, Potomac, Maryland. "However, if you own it, there's no reason to sell."

The fund is well-positioned for inflation-related trends, though these have yet to occur, said Lowell. On the other hand, its emphasis on large-cap growth stocks in technology, health care and consumer discretionary should excel in a growth environment, he said. That could mean he will upgrade his rating on the fund in the future, he said.

Jeffrey Feingold, who had been at Fidelity since 1997 running sector and industry funds, became Fidelity Trend manager in early 2007. He builds a portfolio of about 100 stocks that he believes have positive earnings surprises ahead, tracking their buying and selling trends while keeping within range of the Russell 1000 Growth Index. He is both conservative and aggressive at the same time with different issues.

"This fund has less than eight percent of its portfolio in foreign stocks, so it evidently doesn't consider the global marketplace to be a stable trend," said Lowell.

Hardware represents its largest concentration at 17 percent, followed by consumer goods, consumer services, health care and software. Its top holdings were recently Microsoft, Apple, Google, Cisco Systems, Procter & Gamble, Tempur-Pedic International, Amazon.com, Wal-Mart Stores, Covidien and Hewlett-Packard.

This "no-load" (no sales charge) fund requires a $2,500 minimum initial investment and has an annual expense ratio of 0.80 percent.

Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, 555 North Central Avenue, Suite 302, Phoenix, Arizona 85004-1248, or by e-mail at andrewinv@aol.com

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