Since I bought the shares Volkswagen's share price has made a significant comeback, while Audi has done nothing. The share just sits there, looking somewhat illiquid and confused regarding its own existence.
Audi has tended to trade at a discount to its peers BMW and Daimler historically due to structural issues. Frankly, I am not sure why the share floats at all considering that 99.5 % is owned by Volkswagen and only 0.5 % is free-floating. I am also confused regarding the disappointing annual dividend payment (0,5 % dividend yield) where outside shareholders receive the amount that is paid as a dividend on one Volkswagen ordinary share each fiscal year. I have no idea how that makes sense.
On a more positive note the share trades at a significant discount to its historical Price/ Book and P/E. Furthermore the company is experiencing above industry growth and has proven resilient and solid profit margins.
Audi delivery growth:
In essence Audi is a solid company and brand with a stock currently trading at a steep discount to historic trading while being confused regarding its own existence. I will sell the stock as soon as its pricing multiples normalizes as I don't know if and how the structural discount will ever cease to exist (and yes, I do know VW could at some point float more shares, or take over the floating shares at fair market value. VW could even sell the whole company in a trade sale, however the current situation has not changed in decades).
Audi Price/ Book development
Source: YCharts
Disclosure: I am long Audi AG
I wrote this article myself, and it expresses my own opinions. I am not receiving any compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
