Opinions
Norman Levine
Volkswagen AG
VOW-GR
DON'T BUY
Oct 01, 2015
Stock price when the opinion was issued
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He is not a big fan of car companies because they don't generate much free cash flow. Cap X is very high. He would prefers LFUS-Q. It makes all the fuses that go into electric vehicles.
He's buying this week's dip. These shares fell to $30, which is obscene compared to other carmakers. Overall, FedEx and Nike are talking about supply chain issues which he hears is worsening, not improving, as rising wages will narrow margins. So, he will likely return to high cash levels.
Not a huge fan. Reasonably well managed. Slowdown in EV buying, just as it's been ramping up its EV production. The field is getting crowded, and Chinese makers have the cost advantage. These factories take so many 10s of billions of dollars of investment, so if you don't get demand in a reasonable time, EPS suffers.
Auto companies haven't been great investments over the long haul.
He sold it a few years ago. BMW has said one of their sport utility vehicles does not meet standards. He would avoid the sector right now. Two Canadian auto parts makers make almost nothing for VW and may be worth looking at.