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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (60187)12/9/2017 7:07:24 PM
From: E_K_S  Read Replies (1) of 78430
 
RE: VLKAY

I wanted to Buy a VW for my next car (currently own a 2005 VW Passat TDI station wagon) but do not like their current offering. They appear to be eliminating all diesels. I was intrigued by their hybrid diesel concept SUV but that is now off the table.

I like the SUV & wagons that Volvo offers for 2018/2019 specifically their new XC40 compact crossover. According to Volvo, this is the best selling car in their fleet in Europe (both diesal & Gas offered w/ an electric/hybrid version in the works).



Have you looked at Volvo in your search for value?

I also have been studying the auto parts companies specifically Delphi and the spin off of their Powertrain Division into a seperate company. The part I like is named Aptiv (APTV). The problem is the valuation is pretty high w/ fair value around $60.00/share (based on a Morningstar report) and the stock is currently selling at $85.00/share. The growth is in their self-driving car segment that is backed by Intel’s technology (Mobileye an Intel company).

Delphi acquires self-driving startup NuTonomy for $450 million
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For the first time in over 20 years I am excited about the auto sector, their new technologies, specifically the self driving technologies and how that might disrupte the market as we currently know it.

I own a small position in Ford I bought many years ago (over 15 years) when I bought my 1998 F150 truck. I still own that truck and it is built rock solid. My investment is almost a 2 bagger but not that good when you look at the years I have held the stock but it was a good dividend payer.

Based on GM's previous announcements, they actually may be one of the first auto companies to deploy this self driving technology in large scale. The other large auto companies (BMW, Vovo, VW) have working prototypes. That is why I focused on the part suppliers and now have APTV on my Buy watch list.

FWIW, I am willing to pay a small premium but the Moringstar report did point out that APTV is already priced w/ a lare premium and does not even discount the cyclical nature of the auto industry.

So for now, watching and making my Buy list of players in this sector but I do believe 2018 is the year to start to invest in this sector.

EKS
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