Putting the Vroom back into Porsche and Volkswagen (Research Report #2)

Putting the Vroom back into Porsche and Volkswagen (Research Report #2)
28 January 2019

I have just released a 72-page report about Porsche SE, a EUR 18bn company listed in Germany and New York (ADR).

Shares in Porsche SE are probably one of the best opportunities you can currently find on the German stock market. It’s also one of the country’s most complex corporate situations and one where I believe significant upside is combined with limited downside.

In other words, it’s ideal for a research report on Undervalued-Shares.com!

An equity opportunity “Made in Germany”

Contrary to popular belief, Porsche SE does not actually produce the Porsche sportscars.

It is a family holding company that owns 52.2% of the voting rights in the giant car maker, Volkswagen. The Volkswagen stake makes up 90% of the entire investments of Porsche SE. The biggest part of the family’s wealth is tied up in Porsche SE – speak of a concentrated portfolio!

In 2008, Porsche SE attempted a hostile takeover of Volkswagen. The audacious transaction failed and ended in financial disaster, but both companies have stayed intimately intertwined ever since. Volkswagen now owns the Porsche car brand, and the Porsche SE family holding owns the biggest stake in Volkswagen.

Volkswagen shares are currently trading at a P/E of just 5.4, its lowest valuation since the 2008 crisis. Through Porsche SE, you can indirectly buy into Volkswagen with a 25% holding company discount – so effectively you invest at a P/E of 4.

The opportunity consists of two separate (but related) aspects:

  • What are the odds of Volkswagen’s new management team regaining the market’s confidence, and when is that likely going to happen?
  • The Porsche-Piëch families, who own 100% of the voting rights at Porsche SE, wield significant influence at Volkswagen. The family recently regrouped and reorganized. Which aces do they have up their sleeves to revive their flagging family fortune? How will this affect external shareholders of Porsche SE?

There are some surprising answers to these questions.

The Volkswagen/Porsche complex is probably going to produce quite a few unexpected headlines during 2019/20 and beyond that.

Volkswagen shares rallied 4% on Friday, and Porsche SE were up 5%. Are these the first signs of things starting to move into the right direction?

You read it here first

My report dissects the interests of the Porsche- Piëch families, and which little-noticed manoeuvers they have recently started to engage in. Some of this will also yield a reply to the answer which share you should buy into: Volkswagen, or Porsche SE?

This is another informative (and, hopefully, entertaining!) report on an equity opportunity that anyone with a bank or brokerage account can make use of. Shares in both Volkswagen and Porsche SE are extremely liquid and easy to trade.

Contrary to the free Weekly Dispatches, this extensive research report is only available to paying Members of my website.

Membership is only $49 per year, and it takes just two minutes to sign up.

If you become a Member, you can also download the previous report I published (on Gazprom), and you’ll get to enjoy all additional research reports that I am going to write over the coming twelve months.

I’d be delighted if you joined my growing group of Members of Undervalued-Shares.com.

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