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Volkswagen Rises the Most of FEZ’s Holdings despite Scandal

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Top performing stocks

Yesterday, the stocks at the top of the SPDR Euro Stoxx 50 ETF (FEZ) were Volkswagen (VLKAY), Repsol, Total (TOT), ENI (EAA), and ING Groep (ING). These stocks rose 6.8%, 2.3%, 0.93%, 0.71%, and 0.44%, respectively, on that day.

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Volkswagen pushed up FEZ with a gain of 6.8%

In September, the stock was hammered by the company’s nitrogen oxide emissions scandal, which the U.S. Quality Control Board identified. In November, the company’s chief executive officer, Matthias Müller, announced that 8.5 million cars in Europe—all fitted with illegal emissions control software—would now be technically and financially manageable. After that, the stock rose 25% yesterday, on December 9, 2015. The above graph compares Volkswagen’s performance with its peer Daimler since November 2015.

Key points on Volkswagen performance

  • The company said yesterday that the problem with carbon dioxide emissions is far smaller than suspected.
  • It also said that the internal investigations and measurement checks found that almost all the model variants do correspond to the carbon dioxide figures originally determined.
  • Now these vehicles can be marketed without any limitations.

The stock rose ~7% on this news.

Volkswagen’s return

Volkswagen is currently trading at 132.14 euros. Its 52-week high is 140.58 euros, and its 52-week low is 92.02 euros. Its current price-to-earnings ratio is 10.7x. Its current price-to-book-value ratio is 0.67x. The year-to-date return is -28.4%. The quarter-to-date return is 33%.

The stock was trading 22% and 14% above its 50-day and 20-day moving averages, respectively, but 3% below its 100-day moving average.

In the next part of this series, we’ll analyze the performance of FEZ’s bottom stocks yesterday.

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