“I was wondering if you agree that Porsche looks interesting isin DE000PAH0038”
Thank you for this question which others may also have an interest in. Porsche is representative of a group of companies within Europe with very low valuations. In fact, following a scan of the Europe STOXX 600, Porsche has the lowest combination of historic P/E of forward P/E in the region at 2.86 and 6.36 respectively and the share yields 2.64%.
A number of other European car companies have similar though perhaps not quite as low valuations. Volkswagen (P/E 9.89, Est P/E 7.58, DY 2.14%), BMW’s (P/E 10.58, Est P/E 10.59 DY 2.97%), Daimler (P/E 10.51, Est P/E 11.57, DY 3.34%), Renault (P/E 33.6 Est P/E 9.63, DY 2.38%) and Fiat (P/E 10.5, Est P/E 10.39, DY N/A) all have valuations lower that the region’s mean.
Broadly speaking the chart patterns for the above shares can be broken down into two categories. Those with a strong export focus have been among the greatest beneficiaries of loose monetary policy while those with more of a domestic European focus have been slower to recover. Some such as Renault are currently somewhat overextended relative to their trend means but their medium-term progressions of higher reaction lows would need to be broken in order to question potential for additional upside.
The auto sector was one standout in the search I performed on Bloomberg of Europe STOXX 600 shares with historical P/Es less than 10. but the reinsurance sector is also notable. Swiss Re, Muenchener Re and Hannover Rueck all appeared and yield 4.68%, 4.57%, 4.87% respectively. They have all been ranging for more than a year but have attracted investor attention of late as the search for companies that may represent value increases.