As the automotive sector moves into recovery mode, one giant seems to have been overlooked: Volkswagen AG (VLKAY.PK). In this article I present an overview of the stock in comparison with the other big car makers: Toyota (TM), Honda (HMC), Daimler (DDAIF.PK), Ford (F), General Motors (GM) and Nissan (NSANY.OB). I make a case for the exceptional valuation of the stock, which, along with its 2.32% annual dividend, makes it a strong consideration as the best buy in the recovering auto sector.

Most of the data here originated from Yahoo finance and S&P.

The Company

Volkswagen Group is a German multinational that designs, manufactures and distributes passenger cars, commercial vehicles, motorcycles, engines and turbomachinery. Volkswagen AG has its primary listing on the Frankfurt Stock Exchange and is a constituent of the DAX index. Secondary listings are on the London Stock Exchange, Luxembourg Stock Exchange, New York Stock Exchange (VLKAY) and

A relatively stable economy and very low interest rates did their part helping the auto industry to another strong month of car sales in April.

Overall, sales are expected to check in at a seasonally adjusted annual rate (SAAR) of more than 15 million units, according to most analysts. Kelley Blue Book anticipates a SAAR of 15.3 million units in April. In its monthly joint survey, J.D. Power and Associates and LMC Automotive predict a SAAR of 15.2 million units, the same as in March.

The gains come even as car prices bubble up near all-time highs, offset by near-historic low interest rates for new-car loans and by longer terms for them - up 72 months or more. Kelley Blue Book says the average price of a new car dipped slightly last month by a half-percent, but remains high at $31,356, up more than $150 from a year ago.

Q1 2013 Earnings Call

April 29, 2013 8:00 am ET

Executives

Christine Ritz

Hans Dieter Pötsch - Chief Financial Officer, Head of Controlling & Accounting and Member of Management Board

Christian Klingler - Member of Management Board and Member of The Group Board of Management for Sales & Marketing

Analysts

Michael John Tyndall - Barclays Capital, Research Division

Horst Schneider - HSBC, Research Division

Stephen Reitman - Societe Generale Cross Asset Research

Daniel Schwarz - Commerzbank AG, Research Division

Jochen Gehrke - Deutsche Bank AG, Research Division

Georges Dieng - Natixis Bleichroeder LLC, Research Division

Charles Winston - Redburn Partners LLP, Research Division

Stuart Pearson - Morgan Stanley, Research Division

Fraser Hill - BofA Merrill Lynch, Research Division

Michael Punzet - DZ Bank AG, Research Division

Erich Hauser - Crédit Suisse AG, Research Division

Jose M. Asumendi - JP Morgan Chase & Co, Research Division

Frank Biller

April 25, 2013 4:00 am ET

Executives

Ferdinand K. Piëch - Chairman of Supervisory Board, Chairman of Executive Committee, Chairman of Mediation Committee and Chairman of Nominating Committee

Martin Winterkorn - Chairman of Management Board and Chief Executive Officer

Hans Dieter Pötsch - Chief Financial Officer, Head of Controlling & Accounting and Member of Management Board

Presentation

Ferdinand K. Piëch

Ladies and gentlemen, shareholders, as Chairman of the Supervisory Board, I would like to open the 53rd Ordinary Annual General Assembly of Volkswagen AG, and I will be the Chairman of this AGM. Thank you for following our invitation in such great numbers. I should like to welcome you most warmly. I also welcome our guests among you in particular, Klaus Mohrs, the Lord Mayor of the city of Wolfsburg; and [indiscernible] from Wolfsburg. I should also like to welcome the ladies and gentlemen of

By Richard Read

Official stats on March auto sales won't be available until next week, but analysts are already predicting a bang-up month. In fact, the folks at Kelly Blue Book think March could be the best month for new car sales since before the Great Recession.

In all, KBB expects to see 1,450,000 vehicle sales in March 2013 -- a high that hasn't been achieved since August 2007. After adjusting for the number of selling days this month, that figure represents a 7% jump over March 2012. As exciting as that may be for dealers, though, analysts had been expecting this kind of growth, so the seasonally adjusted annual rate of sales remains flat at 15.2 million vehicles.

Why the increase in March? KBB's Alec Gutierrez suggests it's due largely to America's improving economy and the rise in employment figures. Car loans are also easier to come by these

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Cyprus' plan to raid bank deposits sends markets scuttling. Global equities, the euro and oil have slumped after the eurozone demanded that Cyprus tax bank savings in return for a €10B bailout. Cyprus' government is reportedly considering a tax-free threshold for smaller deposits as it attempts to win over legislators for the levy ahead of a parliamentary debate later today. The publicized plan is to tax accounts of under €100,000 at 6.7% and those above that level at 9.9%. "This is a nuclear war on savings and wealth," writes Jefferies' David Zervos.

Boeing loses out to Airbus for massive Indonesian deal. Airbus (EADSF.PK) has won an order from Indonesia's Lion Air for 234 Airbus A320 jets in a deal worth $24B. The booking is a blow to Boeing (BA), as Lion Air had been seen as a fortress for the U.S. company.

China retains Zhou as

2012 Earnings Call

March 14, 2013 5:00 am ET

Executives

Stephan Gruhsem - Head of Group Communications, External Relations & Investor Relations

Martin Winterkorn - Chairman of Management Board and Chief Executive Officer

Hans Dieter Pötsch - Chief Financial Officer, Head of Controlling & Accounting and Member of Management Board

Christian Klingler - Member of The Board of Management and Member of The Group Board of Management for Sales & Marketing

Leif Östling - Member of Management Board

Horst Neumann - Head of Functional Responsibility, Human Resources Chief, Labour Director and Member of Board of Management

Jochem Heizmann - Member of Management Board and Executive Officer Group Trucks Board of Management Division

Francisco Javier Garcia Sanz - Member of Management Board

Presentation

Unknown Executive

[German] Ladies and gentlemen, please be seated so that we can start on time with our press conference. Thank you very much.

Stephan

All good news coming from Ford (F) recently but is Ford headed for another dip in the market? The Europe crisis is still happening in the automobile market. In the fourth quarter alone, Ford lost about $750 million in Europe and Ford expects to lose more this year. In Europe, Ford is expecting a loss about $2 billion this year and $3 billion in the next 2 years. The company is doing all it can but the situation is in the hands of the European economy. A rough economy means fewer sales.

The automobile market in Europe is getting even tougher with the recent results showing that auto sales dropped 8.5% in January, which is the lowest in the last 23 years.

(click to enlarge)

If Ford continues to lose more money in Europe, how will the Europe crises affect the market?

Last year ford's stock dipped

Jaguar is a subsidiary of the Indian Tata (TTM). Volvo belongs to the Chinese Geely. Dacia is French and Rolls Royce German. Opel, Vauxhall, Citroen, SEAT, Skoda, Lada, Leyland, Porsche or Audi have all been absorbed by rivals. Other brand names have disappeared. Simca, DKW, DAF and Trabant are names few young Europeans even recognize. Saab is the latest victim. Under new Asian ownership, it will produce nothing but electric cars.

No doubt, the car industry in Europe has had its fair share of restructuring. But the mass market industry still suffers from overcapacity. Four years of declining new registrations have exacerbated the problem. From 2007 to 2011, annual car sales fell by 2 million units to a paltry 13 million. To make things worse, newcomers from Korea are aggressively building a presence. Already, Hyundai (HYMLY.PK) and Kia have managed to carve out 6% of a declining market.

The

Top Stories
Worst could be over for eurozone. Eurozone composite output PMI rose to 47.2 in December from 46.5 in November, with the services index edging up to 47.8 from 46.7. Surveys across the region, such as in Germany, "provide some hope that the eurozone is showing signs of lifting out of its deep double-dip recession," says Markit, although the December improvements are "unlikely to prevent the eurozone economy from having contracted at a sharper rate" in Q4.

Stock futures tread water ahead of payroll data. Dow and S&P futures were flat premarket, while the Nasdaq was +0.1% ahead of December's nonfarm payroll data this morning. Economists estimate that 160,000 jobs were created vs 146,000 in November, while the unemployment rate stayed at 7.7%. European stocks, oil, gold and silver were lower while Asian stocks ended mixed following the surprisingly hawkish FOMC minutes (see below). However, Tokyo

Last summer, I wrote an article about Volkswagen (VLKAY.PK) with a title of Volkswagen Is Truly An Underdog. Back then, Volkswagen's share price was $28.66. Today, the company is worth $43.47 per share. If there is one thing I regret about my investment with this company, that is not having bought more shares. Back then, I had full faith in the company but I only bought 200 shares of it, which was a mistake on my side. Now that the shares had a massive rally, is Volkswagen still a buy, or did it run its course?

Undoubtedly, the car companies have been outperforming the market since the last summer. Ford (F) is up 35% and General Motors (GM) is up 46% in the last half of 2012. Obviously, part of the Volkswagen rally was due to the fact that the entire industry was taking off. At the

The Nikkei gains nearly another 3%. Tokyo tacked a 1.5% gain overnight onto Tuesday's 1.4% advance as Shinzo Abe was formally approved as the new Prime Minister. Abe has vowed to increase inflation and devalue the yen, and has told the Bank of Japan to play along or face legislation forcing it to do so. Now buying ¥85.36, the dollar has risen to its highest level against the yen since April 2011. The Nikkei is ahead 21% YTD, with nearly all the gain coming in the weeks since Abe's return to power became clear.

The Administration eyes expansion of refi program. The Obama administration is considering expanding its mortgage-refinance program to include loans not backed by the GSEs, according to sources. Currently only borrowers on loans held by Fannie Mae (FNMA.OB) or Freddie Mac (FMCC.OB) can qualify for the HAMP, leaving about 50% of the nation's 10.8M

Since the US represents significantly less than 1/2 of world stocks' market-cap, it makes sense to consider non-US companies, and since some investors prefer to own individual stocks instead of funds of foreign stocks, it makes sense for some to consider purchasing individual stocks in foreign local markets.

There are, of course, many foreign stocks available in the US as ADRs, but there are also more foreign stocks that are not accessible that way.

Many of those foreign stocks have pink sheets shares available in the US (symbols end in .PK), but as a general rule we would not recommend purchasing in the pink sheets, because of liquidity issues in many cases. The company shares listed in the local markets would tend to have much deeper liquidity and better execution.

That said, it is difficult for many investors to search for foreign stocks due to lack of data.

Nine Months 2012 Earnings Call

October 24, 2012 8:00 am ET

Executives

Christine Ritz

Hans Dieter Pötsch - Chief Financial Officer, Head of Controlling & Accounting and Member of Management Board

Christian Klingler - Member of The Board of Management and Member of The Group Board of Management for Sales & Marketing

Analysts

Jochen Gehrke - Deutsche Bank AG, Research Division

Michael John Tyndall - Barclays Capital, Research Division

Stephen Reitman - Societe Generale Cross Asset Research

Horst Schneider - HSBC, Research Division

Stuart Pearson - Morgan Stanley, Research Division

Daniel Schwarz - Commerzbank AG, Research Division

Fraser Hill - BofA Merrill Lynch, Research Division

Charles Winston - Redburn Partners LLP, Research Division

Michael Punzet - DZ Bank AG, Research Division

Frank Biller - Landesbank Baden-Wurttemberg, Research Division

Richard J. Hilgert - Morningstar Inc., Research Division

Rabih Freiha - Exane BNP Paribas, Research Division

Christian Breitsprecher -

Auto manufacturers are currently going through a deplorable phase, as they struggle to control increasing losses in Europe after 11 consecutive months of declining sales. One of the most affected auto manufacturers is General Motors Company (GM), which has lost nearly $16 billion in the last 12 years in its European operations.

The issue made it to the headlines when, at the start of September, a Morgan Stanley (MS) analyst recommended that GM should sell out its Opel plant. However, GM, under its CEO Dan Akerson, Vice President Stephen Girsky and interim European chief Thomas Sedran, remained committed to Opel.

It will be interesting to see how things shape up, as GM tries to turn around its operations in Europe by introducing newer products, cutting labor costs, and realigning operations. GM aims to benefit from synergies and alliances with other auto manufacturers like Peugeot (PEUGY.PK).

Europe and

The recession forced both General Motors (GM) and Chrysler into bankruptcy protection. Ford (F) suffered through with reductions in work force, plant closures and discontinued product lines. After the initial euphoria of not being dead yet wore off, automakers have faced turbulent times for the past two years. Survival of the past has been proven, but will the future bring the same?

American automakers long held a very high perch in American manufacturing. The economic meltdown of 2008 and the following years have presented glaring realities to investors that these companies are not impervious to economic slowdown and failure. Despite the domestic economy, the automakers have survived and moved toward profitability. The economic crises in Europe has added another layer of worry for this industry as demand has slowed and the resulting production overcapacity is forcing the industry to make some very hard decisions about plant closures