Autoliv
Inc. (ALV, $116.06): “Hands Free”
By:
Matthew Ogren, AIM Student at Marquette University
Disclosure:
The AIM Equity Fund currently holds this position. This article was written by
myself, and it expresses my own opinions. I am not receiving compensation for
it and I have no business relationship with any company whose stock is
mentioned in this article.
Summary
• Autoliv Inc. (NYSE:ALV) is a world leader in automotive safety
systems. The company designs and produces safety systems for all the major
manufacturers within the automotive industry. Products include traditional
automotive necessities such as airbags and seatbelts, along with relatively
new, electronic-based systems. These systems include radar, night vision and
camera vision systems.
• Autoliv Inc. had a
strong showing at the 2017 Consumer Electronics Show (CES) in Las Vegas, Nevada
earlier this January.
• On January 3, 2017,
Autoliv and Volvo officially signed the final agreement for their previously
announced joint venture.
• ALV recently joined the
international research program ADAS & ME with its 29 other partners.
• During the month of
November ALV declared a dividend of 58 cents a share for quarter one of 2017.
• Autoliv Inc. along with
Key Safety Systems Inc. may have the opportunity to present embroiled Japanese
based Takata Corporation with takeover bids.
Key
points: Autoliv showcased a few of their newest innovations at
the CES earlier this month. The new innovations unveiled included the company’s
newest camera, radar and multiple other modules. Autoliv describes their newest
cameras as “an extra pair of eyes” in the car. The company’s new family of
radars, the 77GHz series, are considered the highest distance resolution radars
available today. These newest innovations, along with others, are steps forward
into the inevitable reality of self-driving vehicles.
Autoliv and Volvo
announced that they would be entering a joint venture in early September. When
the two companies finalized this arrangement on January 3 they gave more details
on the endeavor. The joint venture will be owned 50/50 and will be named
Zenuity. The new company plans to start operations before the end of 2017.
Assuming they stick to their pre-established timeline, Zenuity should be
selling their first product by 2019.
ADAS & ME is a
program that focuses on drivers of cars interacting with Advanced Driver
Assistance Systems and autonomous vehicles. The major reasons for this program,
and Autoliv’s involvement in it, were addressed by Camilla Apoy, ALV’s Research
project leader. She stated, “To increase road safety and save even more lives,
we need to understand how the driver interacts with highly automated driving
solutions. This project is also about learning how driver collaboration with the
technology can be facilitated.”
What
has the stock done lately?
Autoliv has had strong
performance lately. The company had a rough October and early November, before
bottoming out at a price of $94.29 on Nov. 9th. Although since that
date, the stock price has seen a major resurgence. As of market close on
January 25, 2017; the price per a share had exceeded $116.
Past
Year Performance: Over the course
of the last year Autoliv’s stock price has fluctuated from the mid-$90s to the
mid-$120s. Despite all the movement both up and down, the company has
maintained its value from a year ago. However, Autoliv Inc. was not added to
the AIM International Equity Fund until early September of 2016. The shares
were purchased at a price of $103.43 meaning they have generated a ~12% return
since their addition.
Source:
FactSet
My
Takeaway
Autoliv has been a
strong, well-respected company within their industry for years. They continue
to earn and uphold their reputation day in and day out. The evidence can be
seen in their unwavering commitment to auto safety and the development of auto
technology. Whether they are successful in a takeover of Takata Corporation or
not, Autoliv will continue to be a leader within the automotive community.
Through their active safety branch of operations and advancements such as
autonomous diving, Autoliv is a firm that is set on reaching new heights. Look
for ALV’s stock price to reflect this, and for it to rise back into the $120s
and beyond.
Source:
FactSet
