Sunday, 30. April 2017  
05.10.2016 01:06
Author: Nic Wright

STOCK SCREEN: Automobile Stocks With Solid Upside To Intrinsic Value

 

In September, the Global PMI-manufacturing index, which gives an average estimate for around thirty countries, hit its highest point since the fourth quarter of 2015. The indicator, which is produced by JPMorgan and NTC Research in association with the Institute for Supply Management (ISM) and the International Federation of Purchasing and Materials Management (IFPMM), has a good track record of monitoring the global business cycle.

 

While the September PMIs signal that the global manufacturing sector remained in a low growth gear at the end of the third quarter, the survey has registered a reacceleration of global trade in recent months.

 

Evidence of reacceleration was also confirmed by latest automobile industry sales data, as U.S. SAAR Auto sales are now tracking up 1.2% year-to-date, which suggests the industry might eclipse the high sales level set last year. Additionally, the ‘big-5’ markets in Europe reported car sales of +5.8% YoY in Sept (+7.2% YTD), hinting to a EU SAAR close to 14m units, or +1% vs. the 3-mth rolling average.

 

As the market is showing little appetite for a sector hit by a 14% decline year to date and a 9% underperformance, despite solid operating performance and valuations at a discount to historical references, we screen for automobile stocks with solid upside to our AVM’s intrinsic value estimate.

 

These are the exact filter criteria we used:

 

1. Market capitalization above 1bn.

2. 10 percent plus Upside to fair value based on all three of our AVM’s valuation approaches.

 

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

LAST PRICE

MARKET CAP.

MEAN MULTIPLE UPSIDE [%]

GRAHAM UPSIDE [%]

GREENBLATT UPSIDE [%]

DIVIDEND YIELD [%]

NETDEBT / EBITDA

 AISIN SEIKI CO LTD

 Japan

4815.00

1418858

14.9

24.4

42.6

2.1

-0.0

 BAYERISCHE MOTOREN WERKE AG

 Germany

76.82

50070

215.0

93.3

172.2

4.3

-1.2

 DAIMLER AG-REGISTERED SHARES

 Germany

64.07

68544

12.9

42.2

83.3

5.2

0.0

 HYUNDAI MOBIS CO LTD

 South Korea

276500.00

26915578

44.6

60.6

57.9

1.5

-1.5

 ISUZU MOTORS LTD

 Japan

1216.50

1032106

15.3

24.2

78.6

2.8

-0.5

 KIA MOTORS CORPORATION

 South Korea

42150.00

17086065

88.7

83.0

196.0

2.9

-0.4

 VOLKSWAGEN AG-PREF

 Germany

118.00

62948

171.2

94.6

60.4

2.2

-0.8