The choice would seem clear enough:


But two funny things happened this week to Porsche. The first: CEO, Matthias Mueller, remarked that he anticipated flat demand into 2013 despite great results so far in 2012.

The second: two lawsuits against their Volkswagen acquisition strategies in 2008 were halted. Porsche shares surged.

Contrasted to the tenor of this article in the Wall Street Journal’s ‘Driver’s Seat’ blog one wonders if equity holders are, well, a touch complacent: the double whammy of stagnant European and decelerating Chinese demand may be priming the luxury German airbags for use.

Is there opportunity in this? If so, is there a hedge?

The shot below is the spread of Porsche vs Honda over the last 18 months with the recent ‘lawsuit turbo charge’ clearly visible.



Honda plan to double sales of small cars (led by the ‘Fit’) in emerging markets over five years and the firm, for what it is worth, is loved by analysts even more than Porsche.

The Honda Fit (‘Navigate the urban maze in style’) is no 911 Carrera. But with a volume vs niche automaker trade it may matter little.

(Usual disclaimers, merely food for thought etc etc. PAH3/HMC are cointegrated; this analysis run with a time-adaptive beta)

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