Sunday 10 May 2020

Analysis of VW 2020



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. They have seven essential group values, that considering not that long ago, are simply a joke.

Active: World wide with sales in 153 countries. 

P/E: 4.8

Here you can find the previous Analysis of VW 2018


The P/E for VW is excellent with 4.8 as is the P/B with 0.5 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 11% while the book to debt ratio is at 0.3 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 3.4% which gives us a motivated P/E of 12 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 almost 100% of their earnings.
They pay a dividends in the size of 5% which happily corresponds to 25% of their earnings so there is room for improvement if so desired.

Future: Means of solo and multi-people transportation will be around for a long time. If that car is running on electricity, petrol, gas etc. is a different story. Few car companies are bound to use a specific source of "fuel" besides from Tesla. I do believe that VW will be able to change to what is required of them and if not then they can hopefully make a take-over of a company that already has what they need.

Conclusion: It is indeed a go for Graham and also for me even though I am still annoyed about the diesel-scandal and me buying the shares just before that took place. I am half interested in increasing my holding.

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