Wednesday, 28. June 2017  
16.07.2016 10:51
Author: Nic Wright

STOCK SCREEN: Automobile Stocks With Solid Margin-Of-Safety

 

After six years of industry sales gains, the sustainability of consumer demand for new cars is being questioned by the market. U.S. Light Vehicle Retail Sales in June was 16.66 Mil. Units (SAAR) after 17.45 Mil. Units in the month before and 17 Mil. Units in June 2015, fueling worries that demand in the world’s most profitable vehicle market has peaked.

 

While new passenger car registrations in the EU were still growing at 6.9% in June 2016 compared to a year ago, Russia and Brazil remain down significantly and China has been offering sales-tax discounts to fuel sales gains.

 

With additional political and economic uncertainties arising from the UK’s vote to leave the EU, the automotive sector has de-rated sharply from mid-March 2015 highs. If fundamentals remain better than shares suggest, the upside for the sector might be significant, as it is currently trading at historically low valuation levels.

 

In looking for ideas this week, we search for stocks with the highest Margin-Of-Safety in the automobile sector, according to our AVM’s Intrinsic Stock Value estimates.

 

Here are the filter criteria:

1. Market capitalization above 1bn.

2. More than 20 percent Upside to Intrinsic Stock Value according to our AVM’s Graham Value estimates.

 

Here is our list of stocks matching all criteria in alphabetical order. Company names in the table below are linked to the ANALYZER, our single stock analysis tool. Intrinsic Value Model assumptions can be adapted in the MODELER, our modeling and forecasting environment:

CLICK COMPANY NAME FOR DETAILED STOCK VALUE ANALYSIS

COUNTRY

INDUSTRY

LAST PRICE

MARKET CAP.

GRAHAM UPSIDE [%]

DIV. YIELD [%]

 AISIN SEIKI CO LTD

 Japan

 Auto Parts&Equipment

4230.00

1246474

38.8

2.4

 BAYERISCHE MOTOREN WERKE AG

 Germany

 Car Manufacturers

72.86

47216

102.7

4.6

 BRIDGESTONE CORP

 Japan

 Auto Parts&Equipment

3428.00

2787315

21.1

4.1

 DAIMLER AG-REGISTERED SHARES

 Germany

 Car Manufacturers

57.27

61227

70.1

5.8

 ELRINGKLINGER AG

 Germany

 Auto Parts&Equipment

17.69

1121

33.0

3.4

 FAURECIA

 France

 Auto Parts&Equipment

31.99

4429

16.0

2.4

 FIAT CHRYSLER AUTOMOBILES NV

 Netherlands

 Car Manufacturers

5.91

7746

397.6

0.3

 ISUZU MOTORS LTD

 Japan

 Car Manufacturers

1316.50

1116948

20.4

2.5

 KIA MOTORS CORPORATION

 South Korea

 Car Manufacturers

41850.00

16964456

79.8

3.0

 SUZUKI MOTOR CORP

 Japan

 Car Manufacturers

3042.00

1493622

21.5

1.1

 VOLKSWAGEN AG-PREF

 Germany

 Car Manufacturers

115.70

61081

98.7

2.2

 YOKOHAMA RUBBER CO LTD

 Japan

 Auto Parts&Equipment

1373.00

232791

39.0

3.8