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.
In This Article...
Who owns the vast majority of Volkswagen?
Despite market turbulence brought on by Russia’s war against Ukraine, VW intends to list the Porsche sports-car division.
After VW’s Porsche sports-car division is listed on the stock market, the wealthy Porsche and Piech families intend to maintain their controlling ownership of the Volkswagen Group.
Through their family investment company, Porsche Automobil Holding SE, the Porsche and Piech family owns a 53 percent stake in the Volkswagen Group.
According to Bloomberg Intelligence, Porsche SE intends to acquire a 25 percent blocking position in the anticipated Porsche IPO, which may fetch up to 90 billion euros ($99.1 billion).
According to Chief Financial Officer Johannes Lattwein on Tuesday, Porsche SE has a solid financial position and ample room to raise outside funding.
On a conference call with reporters, Lattwein stated that there are “no plans to lower the share in Volkswagen at this time.”
The IPO, the VW Group’s greatest strategic move in years, was being worked on by teams that were “very engaged,” he said.
Despite market instability brought on by Russia’s conflict against Ukraine, VW is still making plans to list the Porsche sports car division, one of VW’s major sources of profits.
The action is a part of VW’s aim to increase its market valuation and finance the largest transition in the industry to electric automobiles. It’s impossible to exclude out negative effects from the Ukrainian conflict on the IPO, according to Lattwein.
CEO Hans Dieter Poetsch, who is also the chairman of VW’s supervisory board, stated on the call that Porsche SE has “an great future ahead.”
“Cash flow is anticipated to increase even further, and the company can be expected to have both an attractive payout policy and an investment policy that is focused on the future.”
A critical analysis of Volkswagen stock:
With the following indicators, fundamental analysis of the Volkswagen share provides intriguing medium- and long-term signals:
- Low valuation: It is estimated that Volkswagen’s enterprise value is 0.15 times sales. Therefore, based on its net book value and cash flow, the stock appears to be undervalued.
- Divergent consensus: It is difficult to value this stock because of the wide disparity between analyst price targets for it.
- High price target: The average analyst price target for this company is quite different from the present price, indicating an intriguing upside potential.
- Volkswagen pays out a respectable dividend, making it a desirable yield investment for investors.
- Launches that surpass expectations: According to past trends, the Volkswagen Group has a favorable surprise rate for its releases.
- Strong financial position: The company exhibits a strong financial position with intriguing earnings multiples thanks to a high level of cash and net margin.
- Weak growth predictions: Based on how sales are predicted to evolve, weak growth is predicted during the next few years.
A technical analysis of Volkswagen stock:
Long-term signs from Volkswagen’s chart and technical analysis data are more bearish and include the following:
- With the exception of the MA200 simple and exponential average, which is sending a purchase signal, all simple and exponential moving averages are sending sell signals.
- The following technical support and resistance levels are at 132.64 and 108.28, respectively. The next technical support levels are at 180.02 and 203.04.
- The RSI is currently showing a strong sell signal at 43.231.
- While the long-term stochastic is generating an oversold signal, the short, medium, and long-term stochastics are sending sell signals.
- The MACD is presently at 0.15 and is indicating a weak buy.
What distinguishes Volkswagen ordinary shares from preference shares?
In the past, VW’s Preference Shares (OTCMKTS: VWAPY) have had substantially more trading activity than their Common Shares, making them more liquid. These do not have voting privileges, but they are given preference in the event of any corporate matters, such as the payment of dividends to shareholders.
Is it wise to buy Vwapy?
The consensus price objective for Volkswagen AG among the 16 analysts who are providing 12-month price projections is 23.21, with a high estimate of 32.09 and a low estimate of 11.52. From the most recent price of 14.26, the median projection reflects a rise of +62.79%.
Analyst Recommendations
Two investing analysts were surveyed, and their current consensus is to buy Volkswagen AG stock. Since August, when it remained unchanged from a Buy rating, this rating has been stable. Mouse over the previous months for more information.
Why is the VW stock falling?
The company’s 2022 vision, which includes a crucial shift to electric vehicles, was clouded by the war Russia is waging in Ukraine, according to a warning made by Volkswagen on Tuesday.
The warning from Volkswagen (VWAGY) follows the German automaker’s announcement on Friday that sales of battery electric cars (BEVs) will nearly treble to 452,900 in 2021. However, that was considerably short of the approximately 1 million electric vehicles that Tesla (TSLA) sold last year as well as its goal of 500,000. The auto industry behemoth with its headquarters in Wolfsburg is on a mission to dethrone Tesla as the pioneer of electric transportation.
Tuesday, management cited a scarcity of cable harnesses from Ukraine as the reason why the firm had to stop producing important electric vehicles like the ID.3 and ID.4, among other things.
Volkswagen has demonstrated its resiliency over the years, and CEO Herbert Diess assured the media at a news conference in Wolfsburg that the company will handle the issue as well.
Diess expanded on a warning he had issued on Friday about the threat the conflict and supply chain bottlenecks posed to the company’s operations. “The crisis in Ukraine has called our current outlook into question,” he said. According to reports, 380 businesses have left Russia because of the conflict, but others are still there and still doing business. Nickel, which is frequently utilized in EV batteries, is mostly supplied by Russia.
Volkswagen is giving China, where it has a 16% market share and where EV sales increased by more than fourfold in 2021, a higher priority in the midst of the turbulence in Europe.
The company anticipates growing sales by 8%-13% and deliveries by 5%10% in 2022. In the second part of the year, it anticipates an improvement in the supply of semiconductors.
According to management, pricing for both internal combustion engine automobiles and electric vehicles would increase as a result of rising raw material costs. It issued a warning that commodities volatility might last into 2026.
How do I buy Volkswagen in the USA?
- Select a web broker. One of the most crucial elements to successful trading is this one.
- Establish a trading account. Open your account once you’ve chosen your broker.
- Put the trading platform in place.
- Performing your analysis
- Buy Volkswagen shares.
How many shares of Volkswagen does Porsche own?
Porsche Automobil Holding SE is the sole largest shareholder of the Wolfsburg-based corporation, holding 53.3 percent of the company’s ordinary shares and 31.9 percent of its subscribed capital. Porsche SE sees itself as Volkswagen AG’s long-term anchor investment.
Ten brands, including Volkswagen, Volkswagen Commercial Vehicles, KODA, SEAT, CUPRA, Audi, Lamborghini, Bentley, Porsche, and Ducati, are part of the Volkswagen Group, which is made up of five different European nations. The Volkswagen Group also provides a wide range of financial services, such as fleet management, leasing, banking, and insurance activities for both customers and dealers.
How much of Porsche is owned by Volkswagen?
Volkswagen has completed the acquisition of Porsche, taking control of the remaining 50.1% of the upscale automaker. According to the agreement, Volkswagen will pay Porsche $5.6 billion plus one common VW share.
Matthias Mueller (L), CEO of Porsche, and Martin Winterkorn, CEO of German automaker Volkswagen, chuckle prior to a news conference on July 5, 2012, in Wolfsburg. In exchange for full control of Porsche, VW said in a statement late on Wednesday that it will pay 4.46 billion euros ($5.58 billion) and issue one ordinary share of VW to Porsche SE, the holding company that still holds a majority of the sports-car market that VW does not already possess.
By guest blogger Viknesh Vijayenthiran
Porsche is now formally a member of the Volkswagen Group after the two businesses announced this week that Volkswagen would pay Porsche SE, the sports car maker’s existing holding company owner, 4.46 billion euros (about $5.6 billion) to acquire the remaining 50.1% ownership in the company. The Porsche and Piech dynasties, who have ruled Porsche and Volkswagen respectively for seven years, have been embroiled in a takeover dispute that began when Porsche attempted to acquire Volkswagen.
Thanks to a separate agreement with German tax authorities, the most recent move will enable the integrated automotive group made up of Volkswagen and Porsche to come into existence two years earlier than the initial Comprehensive Agreement inked in 2009.
Porsche SE will donate its operations as a holding company, including its 50.1% investment in Porsche, to Volkswagen, which already indirectly owns 49.9% of the sports car manufacturer, under the new structure created by the two businesses.
After the deal is finalized, Volkswagen will own all of Porsche’s shares through a middle holding company. Porsche SE will also get one common share of Volkswagen in addition to the $5.6 billion compensation. The cash sum is determined by adding various adjustment elements to the equity value of 3.88 billion euros ($4.85 billion) for the remaining Porsche shares specified in the original Comprehensive Agreement.
In five years, where will the Volkswagen stock be?
Stock of Volkswagen AG?
Is it a good idea to trade “VLKAF” stock today? Our real-time forecasting system indicates that
Volkswagen AG may be a successful investment choice if you’re looking for companies with strong returns.
At 2022-09-05, the Volkswagen AG quote is equivalent to 183.450 USD. According to our projections, a long-term growth is anticipated,
2027-08-27 stock price forecast for “VLKAF” is 355.013 USD. The earnings after a five-year investment are
anticipated to be roughly +93.52%. Your $100 investment today might be worth up to $193.52 in 2027.
Is Volkswagen stock a good buy?
According to an analysis of Volkswagen’s historical stock price, the trend was downward and, as of 23 December, there were no indications that it will reverse.
An optimistic forecast for 2022 was supported by the consensus analyst sentiment and algorithm-based predictions from Wallet Investor.
Before purchasing Volkswagen shares, investors should conduct their own due diligence. None of these viewpoints need to be interpreted as a suggestion to buy stock in the business.
Why has Volkswagen stock gone down?
Since April of this year, the price of VOW3 stock has been declining as the company’s capacity to produce cars has been hampered by supply chain bottlenecks.
How high can Volkswagen stock go?
By the end of 2025, Volkswagen stock might cost 227.256 per share, according to forecasts made using an algorithm by Wallet Investor. These forecasts are derived from an evaluation of the current price trend. Up until then, a lot of factors could happen, which could have an impact on the performance of Volkswagen stock.