Sunday, May 6, 2018

Analysis of VW 2018


Logo of VW 2018


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: 7.6

Here you can find the previous analysis of VW 2016

Contrarian analysis of VW 2018 with P/E, P/B, ROE as well as dividend.

The P/E for VW is excellent with 7.6 as is the P/B which is only at 0.8 which gives a clear buy signal from Graham. The earnings to sales are so, so with 5% and the ROE is not the best with only 10% while the book to debt ratio is at 0.35 which is also not superb but these days all these companies have leasing as part of their model for making the sales.
In the last five years they have had a yearly revenue growth rate of 3.2% which gives us a motivated P/E of 10 to 15 which means that VW is undervalued by the market.
The spend a large chunk of money on R&D since it corresponds to over 100% of their earnings.
They pay a tiny dividends in the size of 2.3% which happily corresponds to 17% of their earnings so there is room for improvement but by the look of things they tend to enjoy to keep the money.

Conclusion: Graham directly says yes and I am also not negative however what nags in the back of my head is that harder times will come and probably more sooner than later. Anyway the P/E and P/B is excellent while the ROE and dividends are not something to brag about. I will remain as a shareholder.

No comments: