Volkswagen, a German auto manufacturer with 212 billion Euros in revenue over the past year, was on a public opinion collusion course this past week after the company was caught cheating on its emissions tests. The backlash caused Volkswagen’s stock price to tumble sharply and its CEO, Martin Winterkorn, announced his resignation.
A look at the stock price chart will show just how material this piece of news was to the wellbeing of the stock. However, as with all major drops in such a short time span, we need to understand if it is warranted, or if investors are simply looking to cash out.
Volkswagen (VOWG_p.DE) – March 2015 – September 2015
A good example of a time when significant news broke out, investors fled, and then the stock recuperated thereafter, was the Deepwater Horizon oil spill, involving an O&G giant, BP. Following the explosion and sinking of the Deepwater Horizon oil rig, a sea-floor oil gusher flowed for 87 days, until it was capped on July 15, 2010. BP’s stock was slashed in half, but has bounced back quite substantially several months post-incident.
BP (LSE: BP) – July 2009 – July 2011
Just goes to show that stock markets are never fully efficient, and it takes time for investors to figure out the real material impact of a major news event. In the case of Volkswagen, we may see a similar bounce. Volkswagen’s woes seem to weigh on other auto-related stocks, such as the ones on our list, but they too seem poised to recover.
Ford Motor Co (NYSE: F) – $13.68
Auto & Truck Manufacturers
Ford Motor Company (Ford) manufactures or distributes automobiles across six continents. The Company operates in two sectors: Automotive and Financial Services. Automotive sector includes North America, South America, Europe, Middle East & Africa, and Asia Pacific segments. Financial Services sector includes Ford Motor Credit Company and Other Financial Services segments. Its automotive brands include Ford and Lincoln.
- Market Cap: $73,282,221,962
- Revenue (LTM): $170,320,951,300
- Total Debt (LFQ): $154,296,326,600
- WTD Price Change: -2.5%
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General Motors Co (NYSE: GM) – $29.72
Auto & Truck Manufacturers
General Motors Company (General Motors) designs, builds and sells cars, trucks and automobile parts across the world. The Company also provides automotive financing services through General Motors Financial Company, Inc. (GM Financial).
- Market Cap: $63,112,483,894
- Revenue (LTM): $182,971,809,800
- Total Debt (LFQ): $66,848,084,700
- WTD Price Change: -1.6%
Tesla Motors Inc. (NASDAQ: TSLA) – $261.06
Auto & Truck Manufacturers
Tesla Motors, Inc. designs, develops, manufactures and sells electric vehicles, electric vehicle powertrain components and stationary energy storage systems. The Company also designs, develops, manufactures and sells electric vehicle powertrain components to other automotive manufacturers. Its products include Model S and The Tesla Roadster.
- Market Cap: $44,937,305,861
- Revenue (LTM): $4,450,320,798
- Total Debt (LFQ): $3,357,444,648
- WTD Price Change: 0.1%
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Magna International Inc. (TSX: MG) – $61.83
Auto, Truck & Motorcycle Parts
Magna International Inc. (Magna) is an automotive supplier with about 313 manufacturing operations and over 84 product development, engineering and sales centers in approximately 28 countries. Its product capabilities include producing body, chassis, interior, exterior, seating, powertrain, electronic, vision, closure and roof systems and modules, as well as vehicle engineering and contract manufacturing. Its customers include General Motors, Fiat-Chrysler, Ford, BMW, Daimler and Volkswagen.
- Market Cap: $25,474,436,315
- Revenue (LTM): $40,809,634,300
- Total Debt (LFQ): $1,299,064,000
- WTD Price Change: -5.3%
