Volkswagen CEO Martin Winterkorn apologized on Tuesday after the company admitted to using software that gave false emissions results for some of its diesel engines, plunging the stock about 20% and weighing down its peers in the European automaker market.
The company also said in a statement it would reserve 6.5 billion euro for likely fines, which could total as much as $18 billion, according to the U.S. Environmental Protection Agency (EPA), and which it would calculate into revised earnings forecasts. Volkswagen’s breach contributed to an overall decline in European stocks, which fell 3% for the day, with some automakers down by double digits.
Several days prior to the incident, Volkswagen had shown signs of growth, such as an 3.1% increase in the vehicle deliveries to the European market for the year through August, compared to the same period last year. Global sales were dimmed, however, by weak sales in South America, Russia and China, which led to a 4.8% decline overall.
The European auto industry also saw an 11.5% year-over-year increase in new car registrations for August, “reflecting the ongoing recovery in the market and pursuing the upward trend commenced two years ago,” the European Automobile Manufacturers Association said.
Three noted international funds followed by GuruFocus recently upped their stakes in Volkswagen. Causeway International Value (Trades, Portfolio) fund increased its position by 1,757.6% in the second quarter to 753,318 shares. The holding's fall had only minor impact on the diversified fund of 60 stocks, representing 2.56% of the portfolio as its eighth largest position.
Bestinfond (Trades, Portfolio) also boosted its position by 77.4% to 305,418 shares or 5.2% of its portfolio in the second quarter, and the Signature Select Canadian Fund (Trades, Portfolio) started a position of 17,000 shares or 0.34% of its portfolio in the first quarter.
In the past five years, Volkswagen has reported annual growth rates of 9.4% for EBITDA and 18.9% for book value. It also has valuations near their two year lows, with a P/E of 7.45, P/B of 0.8 and P/S of 0.38.
The All-In-One Screener can report which auto sector stocks’ prices fell the most on Tuesday on ripple effects from Volkswagen. According to the screener, the steepest auto manufacturer dives globally were seen in: Volkswagen AG (XTER:VOW3, Financial), Porsche Automobil Holding SE (XSWX:PAH3, Financial), Audi AG (OTCPK:AUDVF, Financial) and EEStor Corp. (FRA:ZM7, Financial).
Volkswagen AG (XTER:VOW3, Financial)
Volkswagen AG shares fell 19.8% on Tuesday, to close at 106 euros per share. Year to date shares were down 42.6%.
Volkswagen AG was incorporated in Germany. The company manufactures automobiles, sports cars, trucks and commercial vehicles. Volkswagen AG has a market cap of $62.89 billion; its shares were traded with a P/E ratio of 6.11 and P/S ratio of 0.31. The dividend yield of Volkswagen AG stocks is 3.68%. Volkswagen AG had an annual average earnings growth of 10.2% over the past 10 years.
Porsche Automobil Holding SE (XSWX:PAH3, Financial)
Porsche Automobile Holdings SE shares fell 16.7% on Tuesday to close at CHF45.55 per share. They were down 44% year to date.
Porsche Automobil Holding SE was established in 2007 for the management of its shareholdings in the Porsche operating business. Porsche Automobil Holding SE has a market cap of CHF16.75 billion; its shares were traded with a P/E ratio of 4.83. The dividend yield of Porsche Automobil Holding SE stocks is 3.82%.
Audi AG (OTCPK:AUDVF, Financial)
Audi AG shares fell 12.7% on Tuesday to close at $743 per share. They were down 4.2% year to date.
Audi AG was founded on July 16, 1909. The company is an automotive manufacturer of premium cars. Audi AG has a market cap of $32.38 billion; its shares were traded with a P/E ratio of 6.54 and P/S ratio of 0.51. The dividend yield of Audi AG stocks is 0.59%. Audi AG had an annual average earnings growth of 13.2% over the past 10 years. GuruFocus rated Audi AG the business predictability rank of 3-star.
EEStor Corp. (FRA:ZM7, Financial)
EEstor Corp. shares fell 14% on Tuesday to 31 euro cents per share. Shares were down 24.3% year to date.
Zenn Motor Company Inc. provides emission-free, energy-efficient transportation. EEStor Corp. has a market cap of 11.158 million euro.
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