It’s not just VW is cheap. So is BMW and Mercedes. POAHY and VW seems a forever value trap. BMW might be a better bet. But still, they are capital intensive and labor intensive.


Yes, for sure, no argument there, there are a lot of problems. But you want to but when there's blood in the streets, right? You pay a high price for a cheery consensus, someone once said. So the question is, is any of this fixable?

At 3.5x TTM earnings, you are getting a great price if the current problems just remain about the same. And if the German economy recovers, or if they start getting Russian gas flowing back into the country, or if they get some wage reductions in Germany, or if you get a conservative government back in power in Germany and they decide that having reliable power is important, or if part of the Trump tarriff threat is a negotiating tactic, or if Europe decides to protect its auto industry from Chinese imports, ... I think a lot of these ifs might actually happen.

Of course, if you extrapolate from their one sub 3b quarter (the most recent one, with 1.2b), and assume that that is their new profit level, then their 41b market cap is 9x earnings, and it's not a great deal. That just seems too pessimistic for me. Their last 4 full years of earnings have been 8b (2020), 15b (2021), 15b (2022) and 16b (2023), but now they're going to be at 4b a year indefinitely? Possible, but unlikely, I think. But it's a small bet.

dtb