September 20, 2018

Cars are also built by suppliers – we’re buying Hella



Every year we create a ranking of the best CEOs in Switzerland and Germany. When I discussed the German ranking with one of the publishers of the Frankfurter Allgemeine Zeitung, we noticed that it doesn’t contain any German automotive groups.

That is surprising because we determine the performances of CEOs solely on financial data, without any subjective opinions. Every manager that is able to beat at least half of his global competitors is included in our list of outperformers (ranking).

That means that the largest German automotive groups perform below average. One explanation could be the diesel scandal – consumers are insecure, there are looming restrictions on driving and strict conditions. Hundreds of thousands of diesel vehicles are standing at dealerships, both second-hand and new. And the Germans have largely missed the electric boom. Ingolstadt, Zuffenhausen, and Wolfsburg are still full of confidence in internal combustion engines. As large as possible.

The consequence for the stock market is that prices fall. In the entire industry. There is no clear differentiation of who does what, especially in regards to mistakes. And this creates cheap opportunities. Like Hella.

Hella is an automotive supplier that has nothing to do with diesel motors. They manufacture products that are used in small and electric cars, including important technologies for electric mobility. Hella builds light, safety and guidance systems for autonomous driving and is also strong in China.

I don’t need any further reasons. I am buying Hella shares for the 5,000 francs I want to invest this week. Because I believe that the future looks good for Hella.



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