At first glance, there's a lot to like about France's Valeo SA (OTCPK:VLEEY).
More than half of the company's product portfolio addresses CO2
emissions reduction and the company is among the industry leaders in
multiple lines of business. Valeo also boasts a fast-growing,
share-gaining business in China, where margins are meaningfully better
than in Europe. All this and an EV/EBITDA valuation below peer-group
averages.
There are some flies in the ointment, however. Valeo's
apparent improvements in operating performance may not be all they
appear and valuation isn't quite as compelling after making a few
adjustments. I wouldn't sell or avoid Valeo purely on the basis of
valuation and non-cash accounting adjustments, though, and this is still
a reasonably priced alternative to other quality parts/component
companies like BorgWarner (BWA) or Cummins (CMI).
Read the full article here:
Valeo In The Right Places At The Right Time
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