Interview Summary

• Subaru’s Popularity: Subaru has a strong following in the U.S. for its rugged, all-wheel-drive vehicles like the Forester, Outback, and Crosstrek.
• Production and Sales: The company produces about a million cars annually, with two-thirds of sales in the U.S. and less than 10% in Japan.
• Stock and Investment Potential: Subaru’s stock is a bargain, trading around $8 in the U.S.. It has a market cap of $12 billion and $7 billion in net cash, making it a potentially attractive investment.
• Profitability: Subaru is profitable, trading at around five times earnings, and has a long history of profitability. It yields about 4% and trades for about 70% of book value.
• Electric Vehicle Strategy: Subaru aims for 50% of its sales to be all-electric by 2030, investing $10 billion in electrification. 
• Industry Position: The Japanese auto industry is consolidating, with Toyota owning a 21% stake in Subaru. There is speculation that Toyota might acquire Subaru to enhance synergies.
• Market Conditions: A weak yen has affected Subaru’s U.S. shares, but the yen might be bottoming out. Auto stocks are generally cheap, with Subaru offering a distinctive brand and loyal customer base.

Read the full article here:

https://www.barrons.com/articles/subaru-stock-price-value-buy-44ebd10d

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