The high-voltage hype of electric cars

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A Nissan Leaf charges at a electric vehicle charging station in Portland, Ore. AP Photo/Rick Bowmer

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David Roeder reports on real estate at 6:22 PM. Every Thursday on News- radio 780 and 105.9 FM WBBM. The reports are repeated at 10:22 p.m. Thursday and 7:22 a.m. Sunday

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Updated: December 1, 2011 8:24AM

Will electric vehicles power years of profits for the auto manufacturers? If you like auto stocks because you think the product line is at last going green, an industry analyst wants to pull the plug on your reasoning.

David Whiston of Morningstar thought he’d look at how quickly consumers will embrace electric vehicles, which sell for thousands of dollars more than cars of comparable size and features. He concluded that the internal combustion engine is a long way from the junkyard.

Consider the pure electric car from Nissan (NSANY), the Leaf. It has a price of about $27,700 and an advertised range of 100 miles. But the range depends on speed, terrain and whether the air conditioner is on. For most driving, the range might be just 60 to 80 miles, Nissan reports on the car’s website.

Drivers can spend another $5,000 and get a Chevy Volt that’s a gas-electric hybrid, which offers a range of 375 miles. Whiston said some conventional gas vehicles now report mileage that’s close to that of Toyota’s (TM) Prius hybrid.

Regardless, the higher cost of electric cars still means it takes years of gasless driving before the owner sees any savings. The conventionally powered Chevy Cruze compact carries half the sticker price of a Volt.

Whiston said, however, that no matter what happens with technology, a smart auto industry stock to buy is Johnson Controls (JCI). It has 36 percent of the global auto battery market and is poised for growth from advances in lead-acid and lithium-ion systems, he said.

Finally, I wonder how many prospective Leaf owners know that a public charging station isn’t like going to a gas pump. Nissan said it takes about 30 minutes to take the car’s battery from zero to an 80 percent charge. The biggest investor in these stations ought to be Starbucks (SBUX).

BUY PICKS: Earnings reports can temporarily knock down the prices of stocks that otherwise have decent stories to tell. Accordingly, senior stock strategist Kevin Cook at Zacks Investment Research has found three that he said should be considered in short order.

They are Lululemon Athletica (LULU), IBM (IBM) and Cummins (CMI). His take: LULU is projected to show 27 percent earnings growth next year, IBM is making a killing on selling smart-grid energy systems to governments and CMI, king of the diesel engines, will move to natural gas engines as it becomes a preferred energy source.

DEAD DOW: Blue-chip companies with decent dividends are all the rage, but not all the big names are equally attractive. Jeff Reeves, editor at InvestorPlace.com, wrote that even in the Dow Jones industrial average, there are stocks that are slugs. He calls them “dead Dow stocks” and they are:

Bank of America (BAC), no surprise there; McDonald’s (MCD), due for a breather after racing higher the last few years; Procter & Gamble (PG), with revenue below 2008 levels; JP Morgan Chase (JPM), where weak earnings plus accounting tricks equal a lack of trust, and General Electric (GE), beset by all sorts of trouble, with credit woes at GE Capital a problem of its own making.

RENDING REITS: Analysts at Cowen & Co. offered what could a bracing message to all those developers constructing apartment buildings around downtown Chicago. They see some weaker fundamentals in the rental business and are downgrading real-estate investment trusts that specialize in apartments.

They cut their ratings on AvalonBay (AVB) and Chicago-based Equity Residential (EQR) to neutral, while keeping an “outperform” rating on Essex (ESS). Their thesis is that the apartment REIT sector has had a good run, earnings comparisons will get tougher and, perhaps the biggest point of all, “demand headwinds are forming as supply is ramping up.”

Analysts James Sullivan, Steve Boyd and William Kuo said REIT management has told them more people are moving out because of rent hikes.

GOING ROGUE: Why do big banks have people who nearly bring down the fiscal house around them with unauthorized trading? It’s because those are the people the banks want, said experts interviewed by Reuters.

Banks wants traders who are super-competitive, calm under pressure, motivated by money and willing to take risks. Psychologists told the news service the banks self-select for the traits that are most likely to lead to abuses.

CLOSING QUOTE: “The market keeps on thinking that it’s put Europe’s problems to bed, but it’s like putting a three-year-old to bed: You might put it there but it won’t stay there.” — David Kelley, chief market strategist, J.P. Morgan Funds