May 18, 2023

Mercedes: a well-known name with good innovations

Mercedes: a well-known name with good innovations

When we talk about cars, one of the first names that comes to mind is always Mercedes - and rightfully so. It is one of the biggest and oldest car manufacturers in the world. That’s precisely the reason we discussed it for Obermatt Europe Value Wikifolio during our Coffee Break Zoom stock chat.

PRO: The following three points speak for a buy:

  1. Very good Obermatt ranks: Value Rank is at 89, which makes Mercedes shares cheaper than 89% of its European competitors’. The 360° View is 80 - Mercedes has better overall performance than 80% of other car manufacturers.
  2. They have recently completely exited the Russian market by selling shares in their Russian subsidiaries. We support this: last year, we stopped our research of companies in non-democratic regimes.
  3. The company works hard on implementing tech and mechanical innovations into their products, especially in the field of smart electric vehicles.

CONTRA: The following three points argue against it:

  1. A bad Growth Rank of 13. A lot of automobile producers have had a difficult couple of years with sales going down and growth practically stopped. Mercedes has also separated from their truck and bus divisions recently.
  2. We are skeptical of their approach to the paywall for the performance of electric vehicles. However, we may see this practice becoming more common among companies.
  3. Some experts argue that personal car manufacturers don’t have a bright future, as modern society wants the streets back to the people and public transit. Currently though, Mercedes is doing just fine, by introducing new models that run on renewable fuels.

This concludes our analysis of Mercedes, and we decide to buy it for our Wikifolio. The points in favor of a buy make us confident that it is a good choice.

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