(Editor's Note: There is much greater liquidity on the XETRA exchange under the ticker HLE)
The automotive industry is in the middle of a technological revolution on two fronts: The rapid emergence of autonomous vehicles and the growing penetration of electric vehicles. This shift in new technologies leads us to think that auto parts manufacturers will face serious threats in the near term as their products or services could suddenly become obsolete.
In our analysis of the European spare parts manufacturers such as "Valeo (OTCPK:VLEEF)," "Plastic Omnium (OTC:PASTF)," "Faurecia (OTC:FURCF)," "Brembo (OTC:BRBOF)" and "Hella (OTC:HLKHF)," the latter has caught our attention for several reasons. Indeed, we like the resilient side of its business category (lighting systems and vehicle electronics), its attractive valuation coupled with healthy growth forecast, and above all, the fact that the company is still underfollowed.
Let us start by introducing Hella. Since its foundation in 1908 as a family business, the German-based company has launched a variety of innovative products and high-tech lighting solutions on the market. It started with the first acetylene headlights in 1908, and the first headlamps with asymmetrical light distribution in 1957 right up to the series production of the first full LED headlamps in the world in 2008, which was followed in 2013 by the world's first Matrix LED headlamp.
Hella went public on the Frankfurt Stock Exchange in 2014, but family shareholders announced that they would keep 60% ownership until at least 2024 to preserve the firm's tradition of innovation. Introduced at €27, the company rapidly broke the €30 level and integrated the MDAX index, which is the second most important German index after the DAX30.
Primarily invested in automotive lighting, Hella has built its success thanks to high R&D investments (9.5% of net sales) and now supplies automakers in all fields of automotive lighting, from
