Valeo half yearly report

(Article written by Andre Cauchi, Junior Investment Advisor)

One of the factors that an investor considers before investing in a particular company is the performance and how sound it is. Following the half yearly reports being issued in the last couple of days, it is the investors’ interest to remain tuned for any possible opportunities that might be in place.

From a company perspective, financial reports are a double edged sword, since their performance will be under scrutiny compared to market expectations set beforehand. As such, this judgement will be reflected in the share price fluctuations depending on how much the actual results underperform or over perform from the market expectations set beforehand.

Finacial Report Data

Valeo reported 16% growth in order intake excluding the 3bln euro order intake at the Valeo-Siemens JV and its operating margin moved up by 17% considering the takeover of Ichikoh on January 2017. The latter being one of Japan’s leading automotive lighting companies and it still trades on the Tokyo Stock Exchange.

In the first six months of 2017, Valeo group, outperformed the global automotive production by 6 percentage points. This boost was achieved by an increase in sales in Europe, China and other parts of Asia, North America and South America.

Innovative strategy

When it boils down to innovative ideas and solutions in the automotive industry, Valeo are front liners in comparison to their competitors. Keeping in mind the changes experienced by the industry such as autonomous vehicles and smart engines, Valeo is undergoing take overs, joint ventures, acquisitions and divestment to keep abreast with the innovative momentum experienced.

Conclusion

Valeo strategy and financial results so far speak for themselves and should not discourage investors from buying shares from the company. Their performance in the last 3 years has been exceptionally good in terms of share price and trading volume. Valeo has successfully outperformed the STOXX 600 SXAP (European automobiles & parts index) and CAC40 index during this time horizon.