Opinions
Stan Wong
Mercedes-Benz Group ADR
MBGYY-OTC
TOP PICK
Jul 27, 2023
Stock price when the opinion was issued
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One of the top luxury brands, sold in nearly every country in the world. Forecast of 150 billion Euros of revenues this year; Europe accounts for 35%, Asia 28% but definitely growing. Improving supply chains, more semis, and China's revival will all help. Shares moved above their 200-day a few months ago. MB is moving more into e-batteries that could challenge Tesla, now with a 6% market share (cars with their e-batteries), but targets all cars by 2030. MB is a value stock trading at 6x earnings, a big discount vs. its history. Shares are outpacing the MSCI world index.
Great brand, but he sold, 200-day MA started to tilt downwards. Decline in sales volumes, along with earnings and cashflow. Increasing competition and pricing pressures, particularly in EVs. Softening sales in China, very concerning; Chinese are preferring domestic brands.
Affluent customers are not affected by economic downturns, so this type of company is somewhat insulated. Pricing elasticity. Growth rate of high-net worth individuals is growing at 5% a year, faster than mass market growth. Trades at 5.7x earnings, cheap. Raised 2023 earnings guidance. Yield is 7.27%.