Veoneer (NYSE: VNE)
Veoneer was incorporated 3 years ago after being spun out from Autoliv. is incorporated in Delaware but its headquarters is located in Stockholm Sweeden.
I am bullish on autonomous vehicles, electric vehicles, and just anything that has to do with auto manufacturing and technology so I recently decided to convert my Public.com portfolio into a “car of the future” themed portfolio. Besides my few bad trades and few trades that are waiting to mature, the only thing that I hold in my Public brokerage account are tech stocks, specifically EV companies, companies that make car sensors, and semiconductor manufacturers.
I’m betting that autonomous vehicles and Electric Vehicles (EV’s) are going to take off, which isn’t a risky bet because it’s already happening. I currently own a bunch of EV stocks as well as a few tech companies IBM’s, Qualcomm. I decided to add Veoneer to my car of the future portfolio because the company makes and supplies sensors to all of the major car manufacturers and will continue to provide components for all of the self-driving cars that are going to come out in the future.
I just love the company because it’s a stock that nobody was talking about. I wouldn’t call them a major parts supplier, but it seems like they are supplying a lot of sensors to the major auto manufacturers and parts stores.After I purchased one share, I held on to it for a while and kind of forgot about it until they received an offer from Magna. Magna is a giant auto parts supplier for both manufacturers and aftermarket suppliers.
Magna wants to combine their car parts business with Veoneer’s sensors business through a merger. Magna offered Veoneer billions of dollars but within a week, Qualcomm announced a competing offer.
Veoneer is now considering Qualcomm’s offer and comparing the cash value of the deal, as well as the strengths and weaknesses of the two competing companies. This isn’t a bidding war yet, just a company choosing which company it wants to be acquired by; however, Veoneer’s stock price is going up due to investor excitement and to all of the speculation around the deal.
Because of all of the excitement, I decided to buy my second share of VNE and in anticipation of the original deal, I also purchased a share of Magna. I have a lot of respect for Qualcomm and have always admired the company, so when Qualcomm made its competing offer, I also purchased a share of Qualcomm.
Now that I now own shares of all three companies, I can only hope that Magna makes a second offer, which would most likely raise the share price of my Veoneer shares. If you are looking to invest in Veoneer, Qualcomm, or Magna, I would suggest that you just invest in VNE because this merger is old news and is currently reflected in the stock price of all three companies.
I don’t know who’s going to win this bidding war, but I like Qualcomm and have had my eye on that company as a potential investment for a while. If this deal falls through, I’ll probably be more than happy to make Qualcomm a long-term holding. I like Magnus and Veoneer equally, so I would say if you can get either of them for a fair price, go for it.
I believe Qualcomm’s bid was $37 and Magna had a bid for $31, so if for some reason Veoneer falls below those prices, I’ll most likely buy more. I currently own all three stocks, and purchased all of them at decent prices, for me, it’s a win-win, regardless of who wins the bidding war.
If Magna comes back and offers a higher price for the acquisition of VNE, then I believe VNE can and will go beyond $37. If Magna were to offer a per-share offer price higher than Qualcomm’s offer of 37, VNE’s share price could and should rise accordingly.
I like VNE, it was always one of my favorite “low-key” stocks. I love stocks that fly under the radar and Veoneer is a company that a lot of people, who don’t work in the automotive industry, don’t know about. It’s a great company but it’s not the kind of stock or industry a lot of people want to talk about.
If you were to look at my portfolio holdings, it’s easy to see that I don’t own too many stocks that are hype stocks. I don’t own many stocks that you can turn on your TV and hear everybody telling you to go buy, and up until the merger, VNE wasn’t one of those companies.
It’s a lot of mergers going on right now due to the abnormally high profits some companies are making and the high availability of low-interest loans, but I didn’t expect VNE to merge.
I just really admired the fact that they had such a good business model and are working with so many of the major car manufacturers, I love VNE.