We at the Lab are well familiar with the auto industry. Our first ever published piece was about Daimler’s sum of the parts, and we recently commented on the performance of the European auto majors (Mercedes, Renault, and Ferrari) in the second quarter. We continue with Volkswagen (OTCPK:VWAGY) and its upcoming Porsche IPO today in a very similar manner. We should take note of the following before getting into the specifics:
- There are two types of shares in Volkswagen AG and Porsche Automobil Holding SE: voting ordinary shares and voting preference shares.
- Another listed firm with no manufacturing operations is Porsche Automobil Holding SE. This business is a holding, and Volkswagen AG is its biggest investor.
- Volkswagen AG is a holding company with numerous brands and industrial units (many of these entities are run independently). One of these organizations is the Porsche Corporation. Volkswagen AG currently owns Porsche AG in its entirety.
As we anticipate the half-year results, it’s important to remember that Volkswagen’s market capitalization is currently 85.4 billion. The most recent speculations claim that Porsche’s initial public offering will be one of the biggest in Europe. Indeed, according to Bloomberg, the sports car manufacturer would have really gathered a demand greater than the offer during the pre-order process, valuing the company at between 60 billion and 85 billion.
The operation is anticipated to happen in the first week of September after receiving the go-ahead from the supervisory board, despite the markets’ negative phase and worries over Europe’s economic future. Volkswagen will continue to control the majority and only Porsche preferred shares without voting rights will be sold. More information:
- While Volkswagen will (again) control the majority of Porsche AG’s ordinary shares (minimum 75% holding) and preference shares (75 percent plus one share).
- The Germany Stock Exchange will list 25% of the Porsche AG preference shares.
- Porsche AG’s capital will be split into 50% ordinary shares (voting) and 50% preference shares using the standard two-share structure (non-voting).
- At a 7.5% premium over the price of the preference shares in their initial public offering, 25% plus one of the ordinary shares will be sold to Porsche Automobil Holding SE.
- The present Volkswagen stockholders will get a special dividend payout.
In addition to the IPO consideration, Porsche AG released standalone guidance in July with a revenue line between 38 and 39 billion and a margin at the EBIT level in the 17 to 18% range for 2022. Management made a point of highlighting how this EBIT margin is anticipated to increase in the future as a result of improved product MIX and increased focus on the EV transition during the CMD.
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What different kinds of Volkswagen stock are there?
The global impact of the Volkswagen pollution crisis is growing. American investors and consumers are suing Volkswagen in large numbers right now.
Some of you might be familiar with Volkswagen as an automaker but not as a stock. After learning about the emission scandal, I imagine that many investors are eager to examine the stock prices and purchase it for the first time.
Volkswagen stock is traded on markets around the world. But Frankfurt, Germany, is its principal market. There are multiple ticker symbols for Volkswagen when searching for Volkswagen equities on the Frankfurt market. So what makes those various symbols different from one another?
Volkswagen’s ticker symbols resemble “VOW.DE.” The exchange where equities are traded is indicated in the right part. But we’ll ignore that for now. Each symbol’s differences are displayed on the left portion.
Ordinary shares are the ones with the “VOW” symbol. Ordinary shares entitle you to voting rights if you own them. The shares with the “VOW3 sign, on the other hand, are preferred shares. Preferred shares are those that provide their owners preference in a number of ways, including dividend payments, asset distribution during a liquidation, and more. However, preferred shares typically do not grant you any voting rights. In addition, if we contrast the current values of Volkswagen’s common stock (VOW) and preferred stock (VOW3), the common stock is currently more expensive.
Additionally, there are additional Volkswagen emblems, such as VOW4 and VOW5. Depository receipt with a 20% value of VOW is referred to as VOW4. After purchasing shares of a company to use as collateral, a financial institution issues depository receipts as securities. The 20% value of VOW3 is also included in VOW5, which is a depository receipt for VOW3. In other words, both VOW and VOW3 depository receipts are exchanged in the market.
It’s preferable to learn more about Volkswagen shares because it’s likely that there will be numerous pieces on Volkswagen in the media over the next few weeks.
What is the preferred stock of Volkswagen?
A unique equity asset with characteristics of both equity and debt is preferred stock. For the quarter that ended in June 2022, Volkswagen AG’s preferred stock was worth $0 Mil.
When determining enterprise value, the market value of preferred stock must be multiplied by the market value of common stock. The Enterprise Value of Volkswagen AG was $195,463 million for the quarter that ended in June 2022.
The par value of preferred stocks must be deducted from total equity for determining book value. The Book Value per Share for Volkswagen AG for the quarter that ended in June 2022 was $34.65.
When calculating earnings per share, preferred stock dividends must be deducted from net income (Diluted). Earnings per Share (Diluted) for Volkswagen AG during the
who has the most shares of VW?
- 100% of MAN Truck & Bus SE is owned. transferred to TRATON SE following MAN SE’s August 2021 merger with it.
- 100% ownership is the Neoplan. MAN acquired it in 2001. As a distinct bus brand, it was fully incorporated into MAN in 2008.
- 89.7% of TRATON SE is owned.
- The holding company for the heavy commercial vehicle business of the Volkswagen Group is called TRATON, formerly Volkswagen Truck and Bus.
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- Under the International name, the 100%-owned Navistar International Corporation manufactures large trucks. Since July 2021, TRATON SE has been the only owner. In February 2017, Volkswagen Truck and Bus (formerly TRATON) acquired a 16.6% initial investment in Navistar.
- SEAT, S.A.: initially a co-operation agreement with AUDI AG in 1982, with 100% ownership[5]; 51% and 75% ownership in 1986; and full ownership in 1990. SEAT was the Volkswagen Group’s first subsidiary outside of Germany. [22]
- SEAT owns 100% of the Cupra brand. SEAT Sport, the company’s motorsport section, was rebranded Cupra Racing in 2018, and at the same time, Cupra was introduced as a stand-alone brand alongside SEAT.
- koda Auto a.s.: 100% ownership[5]initially in 1991, a co-operation agreement and 30% ownership;[22] 60.3% and 70% ownership, respectively, in 1994 and 1995; 100% ownership since 2000[24].
What distinguishes the VWAGY and VWAPY stocks?
Simply said, from a financial standpoint, the two sets of shares are nearly equal. Voting rights are attached to the relatively “overpriced” shares, VWAGY, but not to VWAPY. The spread between the two shares is what’s different. The spread (monthly) averaged $0.31 or 2.2% for the twelve months that ended in March 2020. The spread (daily) averaged $1.77 or 9.7% for the twelve months that ended in March 2021 (and $1.39 and 8.4% if March 2021 were excluded). The spread was $7.22 and a 26.3% spread as of March 29, 2021. And as of March 30, when I am writing this, the spread has increased to an absurd $9.65, or 34.2%!
I’m betting that this pendulum swings back even if pendulums (price gaps) do occasionally swing out.
Simple: Short VWAGY and purchase VWAPY. An arbitrageur might make returns above 20% if the shares revert to a more conventional spread, whether it was the spread from the previous year or the year before. I’m not forecasting when the spread will return to normal, but I’m betting (investing?) that it will.
VWAGY vs Vwapy, which is preferable?
In the United States, automobiles are still likely the most common mode of passenger transportation. Major automakers have revenues and market capitalizations that top the billion dollar mark. The sector has recently seen some ground-breaking advancements including self-driving cars and electrified vehicles. While there are established competitors in this industry like General Motors, Ford, and Toyota Motors, there are also new or rapidly expanding players like Tesla, which has significantly contributed to the rising popularity of the electric vehicle market. We’ve seen collaborations between automakers and tech behemoths like Google’s subsidiary, Waymo, as well as discussions of potential alliances as technical breakthroughs in the automotive industry gain traction.
The market capitalization of VWAGY ($83B) and VWAPY ($83B) is equal.
VWAGY’s P/E ratio is greater than VWAPY’s: VWAGY (5.66 vs. VWAPY) (4.32).
VWAPY’s YTD gains are larger than VWAGY’s at -23.351. (-31.908).
EBITDA for VWAGY (50.6B) and VWAPY (50.6B) is equivalent annually.
Both VWAGY and VWAPY have the same amount of money in the bank (57.7B).
The debt for VWAGY (179B) and VWAPY (179B) is the same.
Revenues for VWAGY (253B) and VWAPY (253B) are equal.
Is it wise to invest in Volkswagen stock?
From a financial standpoint, purchasing Volkswagen seems like a good deal. Volkswagen produced EPS of 37.24 in 2021 while trading at a price-to-earnings ratio of 5. The company also reported 296 billion in revenues, an increase of 12.3% year over year, and 45.2 billion in cash from operations. Volkswagen’s EBITDA margin varies between 18.5% and 5.5%, and its net income margin is roughly the same. Notably, Volkswagen made significant R&D investments in 2021, depreciating 16.1 billion and capitalizing an additional 10 billion in CAPEX. Volkswagen had 73.7 billion in cash and cash equivalents at the end of the fiscal year 2021, while it had 229.1 billion in total debt.
The future of Volkswagen seems promising. According to the majority of analysts, Volkswagen will reach the revenue milestone of $300 billion by 2023. However, it’s expected that EPS will remain below 2021 levels, at under 36/share.
Is buying a Volkswagen company worthwhile?
According to Zacks’ exclusive data, Volkswagen AG Unsponsored ADR is presently classified as a Zacks Rank 3, and in the coming months, we anticipate an equal return for VWAGY shares in comparison to the market. Additionally, the VGM Score for Volkswagen AG Unsponsored ADR is C. (this is a weighted average of the individual Style Scores which allow you to focus on the stocks that best fit your personal trading style). Volkswagen AG Unsponsored ADR may be undervalued, according to valuation criteria. It would be a good choice for value investors, according to its Value Score of B. VWAGY’s financial stability and expansion prospects show that it has the potential to outperform the market. Its growth score right now is C. With a Momentum Score of F, recent price swings and earnings estimate revisions suggest that this would not be a good company for momentum investors.
Which is preferable, ordinary stock or an ADR?
You should first calculate the commission your broker is likely to charge you for each trade in order to decide whether it would be better for you to purchase the foreign stock (F ticker) or the ADR (Y ticker). The majority of the time, I simply enter the trade into my broker’s online platform to view the anticipated commission and then click “Cancel” rather than confirming the trade. Purchase the foreign stock if the commission rates for it and the ADR are same.
If the foreign stock purchase commission is higher, you should think about how much you want to buy and how long you want to hold the stock.
The ADR is typically more cost-effective for small investors and those who do not plan to retain the shares for an extended period of time. Generally speaking, larger investors and long-term holders should purchase the foreign stock.