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Active investing in the automotive industry through market and fundamental approaches

Lasanow, Didrik
(2016)

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Lasanow_27181100_2016.pdf
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Lasanow_27181100_2016_Annexe1.xlsx
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Lasanow_27181100_2016_Annexe2.xls
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Lasanow_27181100_2016_Annexe3.xls
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Details

Supervisors
Grégoire, Philippe
Faculty
Louvain School of Management
Degree label
Master [120] en Ingénieur de gestion
Abstract
I create two optimum portfolios based on market and fundamental investment strategies. The market approach is based on Fama and French three-factors model. I create a mean market neutral portfolio in order to benefit from equity mispricing. The second approach is based on the fundamental analysis of stocks. I use discounted cash-flows method in order to measure equity mispricing. Both investment strategies aim to take advantage from market inefficiencies and equity mispricing. I finally compare the two portfolios and I can conclude that globally, the automotive industry appears as undervalued, especially for Asian car manufacturers (Toyota and Hyundai). The only company that seems to be overvalued is Ford Motor Company. Both investment strategies are expected to generate positive abnormal returns.