By Angela Harmantas
How can Volkswagen recover from one of the biggest scandals to hit the auto industry in recent years? The first change should be the most obvious. Today on Before the Bell we ponder why Volkswagen’s CEO thinks he should retain his position. Also, new data shows that investor confidence in the US is waning, but in the case of Canadian healthcare stocks, the opposite is true – here’s what you need to know today:
Should Volkswagen CEO Martin Winterkorn resign in the wake of news that the company apparently tampered with software designed to ace emissions tests? I don’t see how there’s any way he can keep his job. To recap, evidence surfaced over the weekend purposely and knowingly sold cars that fell far below US emissions standards, and in some cases almost 40 times the allowable pollution limit. In my mind, this doesn’t happen on such a scale without the CEO being fully aware of such a deception. I say he needs to step down if Volkswagen is to recover from this scandal – what about you?
From autos to healthcare: today’s investing idea looks at 5 Canadian healthcare stocks that have significant upside potential. As I’ve talked about in past blogs, the healthcare sector in Canada is riding a wave of investor enthusiasm, which usually means that it won’t last. However, as our analysts point out, enterprise value/revenue multiple is a good gauge into the relative inexpensiveness of a stock. Within the Canadian healthcare sector, valuations have seen multiples go as high as 500x revenue, so there are serious upsides at the moment. Are you comfortable investing in the healthcare rally? Let us know in the comments.
I was really drawn to this article published yesterday on the Financial Post’s website, “Investor confidence in the US is plummeting: what it means for stocks.” As FP’s John Schmuel points out, the S&P 500 finished last year up 11 per cent, but has lost more than four per cent so far in 2015, even though more than half of its companies beat earnings expectations in their most recent quarter. The article also highlights Bloomberg data that short positions in US stocks are the highest they’ve been since March 2009, around six months after the market meltdown of 2008. Do you think that fear is taking hold in the market? Should we be concerned about the health of the US economy? As always, send us your thoughts!
Do you have a burning question you’d like answered by an investment expert or analyst? Let me know and I can post the answer here in the blog. Contact me by email at angela@smallcappower.com or on Twitter: @aharmantas.
Interested in previous Before the Bell blogs? 
