Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Valeo In The Right Places At The Right Time

At first glance, there's a lot to like about France's Valeo SA (OTCPK:VLEEY). More than half of the company's product portfolio addresses CO2 emissions reduction and the company is among the industry leaders in multiple lines of business. Valeo also boasts a fast-growing, share-gaining business in China, where margins are meaningfully better than in Europe. All this and an EV/EBITDA valuation below peer-group averages.

There are some flies in the ointment, however. Valeo's apparent improvements in operating performance may not be all they appear and valuation isn't quite as compelling after making a few adjustments. I wouldn't sell or avoid Valeo purely on the basis of valuation and non-cash accounting adjustments, though, and this is still a reasonably...

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