uploads///Performance of Volkswagen Since January

Why Did Volkswagen Emerge as FEZ’s Biggest Loser in 2015?


Jan. 5 2016, Updated 9:06 a.m. ET

FEZ’s bottom stocks

The stocks at the bottom of the SPDR Euro Stoxx 50 ETF (FEZ) in 2015 were Banco Santander (SAN), Volkswagen (VLKAY), Repsol, Telefonica (TEF), and Deutsche Bank (DB). They yielded -34%, -28%, -33%, -13%, and -11%, respectively. Among all of the stocks, Volkswagen emerged as FEZ’s biggest loser in 2015.

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Factors behind the Volkswagen’s performance

  • In September, Volkswagen’s stock felt the impact of the emission scandal. The stock fell due to the emission scandal issue in the US. The US quality control board determined that the cars had been fitted with illegal emissions-control software. Volkswagen’s management stated that the company was aware of the issue. As a result, the stock experienced heavy selling pressure.
  • After the US, the United Kingdom, the rest of Europe, and most of the countries in Asia identified the illegal emissions-control software. The company said that it will recall all of the defective vehicles. This process could be very expensive for the company. It could hamper the company’s profit margin.

Volkswagen’s returns

Currently, Volkswagen is trading at 133.51 euros. Its 52-week high was $140.58 per share. Its 52-week low was $92.02 per share. Volkswagen is trading 17% above its 50-day moving average. In the last seven months, it struggled to cross its 50-day moving average. It crossed the 50-day moving average on November 22, 2015, after the announcement that it recalled the defective vehicles.

In the next part of this series, we’ll analyze how the Greek debt crisis impacted the Eurozone (EZU) in 2015.


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