Stock Pick of the Week with Momentum Securities: 01 July - Volkswagen
Momentum’s leading stockbroking division – Momentum Securities – will be bringing you their Stock Pick of the Week, each week on a Wednesday or Thursday.
The stock pick motivation is available as written content and a downloadable video and audio clip.
This week’s pick: Volkswagen
About: According to Investopedia, Volkswagen is a German-based international automotive manufacturing company – responsible for the creation and production of passenger cars, trucks, and light commercial vehicles. Volkswagen’s vehicle models comprise of Tiguan, Golf, Jetta, Passat, to name a few. The company discontinued their Volkswagen Beetle compact vehicle, last year due to a decrease in demand. The automotive manufacturing company’s most prided passenger cars are Porsche and Audi.
Portfolio Manager for Momentum Securities, Serfaas Badenhorst shares his insight on Volkswagen.
Click here to download:
• the audio clip
• the video clip.
“Our stock pick of the week is none other than the creator of the much loved and iconic Beetle! Yes, it's Volkswagen. From a market segment point of view, Volkswagen is the biggest manufacturer of motor vehicles in the world, and it includes luxury brands such as Audi, Porsche, and Bentley.
Volkswagen's management team has a definitive and aggressive strategy to move from combustible engines by 2035 to electric vehicles by the same time. In the European context, Volkswagen is already almost selling double the amount of units in electric vehicles than its closest rival, Tesla and Renault. On the FactSet consensus that we use to determine future prices of stocks, we estimate in Euro terms, low double digit returns for Volkswagen as a share price.
Relative to its peers, Volkswagen is definitely the cheapest, and being the biggest, it has the possibilities of gaining economies of scale, which is difficult for other manufacturers. With the current share price weakness of more than 10%, we believe it's a great entry point to get into the market.
Volkswagen is greatly poised to benefit from future greener initiatives and for the world moving in that direction. And for that reason, our stock pick of the week is Volkswagen.”
