Revisiting this idea from a couple of months ago, when VOW3 shares were at about 93EU, this fallendes Messer has continued down, hitting a low of 80.58 last week, to a share price last seen 17 years ago. The last bit of the fall may be related to the US election with the potential for new tariffs. I bought a few more shares today at 83.50.

Anyways, at today's closing price of 83.94, the company has a market cap of about EU42b. Here are revenues and net incomes for the last five years:

	         now     TTM (Q3) 2023    2022    2021	 2020
revenue (bEU)	         324.5	 322.3	  279.1	  250.2	 222.9
net income* 	         12.3	  16.0    14.9	   14.8	   8.3
mkt cap (bEU).   42.1    47.7     56.0    58.4     89.0   76.4
P/E	          3.4     3.9      3.5	   3.9	    6.0	   9.2 

Current market cap (EU83.94/share): EU42.1b, P/E 3.4
*based on net income to common

So they have had quite good revenue and earnings growth until last year, but this year has been disappointing, with net income down by about a quarter. It doesn't help to have German industry strangled by the loss of cheap Russian gas at about the same time as the last nuclear electricity plants are shut down by the government and there's a recession in Germany and glacial growth in Europe. VW has invested heavily in electric cars whose sales have disappointed. The most recent quarter had only $1.2 in net income, the worst for a long time. If that is the new normal, then this company is not such a great deal: annualize that and you get a P/E of 8.7.

But a lot of this is likely to get fixed. Elections are coming in February, with the new government almost certain to be some kind of right-wing coalition and the Green party in particular (which has insisted on killing nuclear power) particularly out of favour. The war in Ukraine may be almost over (unfortunately, the side I favour is not likely to be able to resist the aggressor much longer) and cheaper gas may be coming quite quickly from North America (as LNG, blocked by the Biden administration.) Cheaper energy and a political course correction in Germany will eventually fix the recession there, which is a big part of VW's market, and more generally in Europe, responsible for almost half their sales. And they will fix the gas-electric product mix eventually.

So at 3x earnings, and a mouthwatering 11% dividend yield in the meantime, this might be a pretty good medium term investment. I should probably buy more.

DTB