Tuesday 26 May 2015

Analysis of VW 2015

VW, a German automotive company

Company: Volkswagen

ISIN DE0007664039 | WKN 766403 

Business:  A German automobile manufacturer. The are still producing motorcycles, cars, trucks, large-bore diesel engines, turbochargers, turbo machinery, compressors and chemical reactors. They are however most famous for their cars and here are the Volkswagen brands. The next time you go for a spinn with your Ducati remember it is a Volkswagen you are sitting on and never forget that the many will always beat the few in the end... one way or the other.

Active: World wide with sales in 153 countries.

P/E: 10.0

Here you can find the previous analysis of Volkswagen (VW) 2014

contrarian values of P/E, P/B, ROE as well as dividend for VW

The P/E of VW is very nice with 10.0 and the P/B is also great with 1.2 giving a clear buy signal from Graham! Earnings to sales look very good with 5% but the ROE is only ok with 12%. The book to debt ratio I do not like that much since it is at 0.3.
In the last five years they have had a yearly revenue growth of 9.8% which is insane high and this then gives us a motivated P/E of 23 to 28 which means VW is highly undervalued by the market today. As a comment though... in the last three years the yearly growth has only been 1.7% which would motivate a P/E of around 11 so that makes VW fairly valued.
They pay a tiny dividend of 2.1% which happily only correspond to 21% of their earnings so still room for improvement.

Conclusion: Graham says yes and all I can say is that I would have loved to grab them in October last year when they dipped down to around 150 €. But I did not and that is that. I fear the high revenue that they make today and where they will go next? I also feared that with Apple but they seem to manage to push it higher and higher so... I do not know. P/E, P/B is great, ROE is ok and dividend is ok. They make in general good cars and the brands they take over they completely convert due to intensive quality control. I will stay away but another dip like that one and I must buy!

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