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A Year of D20 Index Winners and Losers
Driverless Transportation
It has been a little more than a year since we started tracking stocks for the Driverless Transportation (D20) Stock Index. On August 1, 2014, the D20 Index started at 139.694, and since then it has gained 13.322 to finish on July 31, 2015, at 153.016, a one-year rise of 9.5 percent. That gain compares favorably to the Dow Jones Industrial Average and the S&P 500 Index over that same period.
The performance of the D20 Index component stocks displayed considerable diversity over that first year, as shown by the following table. Highlighted in green and red are each of the four stocks that finished as the top gainer and loser in stock value and by percent.
By increasing its share price by $59.54 in the first year of the D20, Google (GOOG) was the index’s absolute price gainer by far. At over 40 percent of the D20 Index, when Google sneezes the D20 gets pneumonia. That paid off for the index this July when Google had a stupendous month, rising from $521.84 on July 1 to $625.61 on the 31st, a gain of more than $100. Interestingly, without that great July, Google would have been our absolute price loser for the year.
Another shining star for the D20 Index in its inaugural year was Mobileye (MBLY), which led all D20 stocks in price percentage gained. Mobileye’s IPO was only a few days before the August 1, 2014, start date of the index, and the Israel-based stock had a meteoric rise out of the gate. Reality set in from October 2014 to March 2105 when Mobilieye returned very close to its IPO price. Since March 2015 it has recorded steady monthly increases. In the D20’s first year Mobileye increased its share price a whopping 62.4 percent, rising from $37.00 to $60.10. As the only company in the D20 Index whose primary source of revenue is generated by “connected” or “driverless” products, this outstanding performance bodes well for the financial future of the driverless market.
Here’s another sign of just how well the D20 Index did in its inaugural year — the stock that saw the largest price loss dropped a mere $6.25 in value. Headquartered in Wolfsburg, Germany, Volkswagen (VLKPY) earned this dubious honor by riding its rollercoaster share price from $46.27 on August 1, 2014 to a close of $40.02 on July 31, 2015. During that period it closed as high as $54.02 and as low as $37.95. If sales volume is any indicator, Volkswagen may be on the rebound. It announced recently that it had passed Toyota as the largest passenger car maker in the world by shipping more cars than anyone in the second quarter this year. And its Audi division is one of the leading auto OEMs in investing in driverless technologies.
The Chinese electric vehicle manufacturer BYD Company (BYDDY) has the distinction of being the D20 component stock whose share price lost the greatest percentage during the index’s first year. On August 1, 2014, BYD’s ADRs closed at $12.84. Its closing price on July 31 this year was $8.78, for a 31.6 percent loss in value. In those 12 months BYD traded as high as $14.98 and as low as $6.48. Even a significant investment from Warren Buffett’s Berkshire Hathaway couldn’t keep BYD from losing almost a third of its value. Certainly some of that loss was due to the recent devaluation of the Chinese Yuan and the roiling financial effect that had on Chinese companies.
There will be some changes coming to the D20 Index in the next few weeks. Nokia’s sale of its HERE mapping business means it doesn’t have a presence in the driverless space, and it needs to be replaced in the D20. Better international representation would improve the D20 Index’s reflection of the global nature of driverless technology’s reach. And Google and Tesla (TSLA) together make up over 55 percent of the D20 Index value because of their high stock prices. Although both are leaders in the driverless space, a smaller representation would be more reflective of the financial health of the industry.
Visit the Driverless Transportation D20 Stock Index page to learn more about it and its component stocks.
D20 Up, Dow and S&P 500 Down
Driverless Transportation
While the Dow Jones Industrials and the S&P 500 took slight hits this week, the Driverless Transportation (D20) Stock Index gained a modest 0.2 percent to close at 153.257. Gainers outnumbered losers 12 to eight.
Google (GOOG) had the largest absolute gain this week adding $9.69 and ending at $635.30. The largest percentage gain was made by NVIDIA (NVDA), adding a whopping 15.2 percent and ending the week at $22.98. NVIDIA shares were boosted on unexpectedly strong results for its 2nd quarter earnings.
KVH Industries (KVHI) lowered its 2015 earnings expectations and took a D20 Index leading 9.9 percent loss on its stock price, ending the week at $11.06. Tesla (TSLA) was also hammered, losing $23.64 and falling to $242.51 as it announced disappointing 2nd quarter earnings.
The big news this week was that Nokia (NOK) sold its HERE mapping unit to a consortium of automakers including Audi (owned by Volkswagen – VLKPY), BMW, and Mercedes (owned by Daimler - DDAIF). This sale may force a re-evaluation of Nokia’s inclusion in the D20 Index as the HERE unit was the sole reason Nokia was originally included.
Visit the Driverless Transportation D20 Stock Index page to learn more about it and its component stocks.
Bosch Upbeat on TomTom as Nokia’s HERE Goes Elsewhere
Burney Simpson
The recent sale of Nokia’s HERE mapping division has the autonomous driving industry looking at other mapping firms, primarily TomTom, the Amsterdam-based provider of personal location and navigation systems.
TomTom’s (TOM2.AS) stock price has more than doubled in the last 52 weeks as interest in the mapping space ballooned after Nokia put HERE on the market.
A consortium of the three big German vehicle OEMs – Audi, BMW, and Daimler – bought HERE for $3.1 billion this month.
TomTom added fuel to the driverless fire in July when it reported it had expanding its partnership with Stuttgart, Germany-based engineering giant Robert Bosch to strengthen its high-definition mapping product. Bosch writes the specs for the maps while TomTom creates the maps.
“By the end of 2015 we want to have new high-precision maps for automated driving for all freeways and freeway-like roads in Germany,” said TomTom’s Vice President of Automotive Operations Jan Maarten de Vries, according to Reuters.
The two began collaborating on Bosch’s Advanced Driver Assistance System (ADAS) last year. Under the expanded deal the two plan to complete map coverage of Germany by the end of 2015, then create maps for the rest of Europe along with North America.
Bosch and TomTom said their maps have precision down to 10 centimeters, compared with 10 to 20 centimeters for HERE.
Bosch believes that its ADAS products could bring sales of $1.1 billion as soon as 2016. Privately-held Bosch reported 2014 revenues of nearly $54 billion.
Vehicles equipped with driverless technology require high-speed, high-tech maps to operate on roads and instantaneously react to changing driving conditions.
While GPS systems provide point-to-point information, driverless maps must display a vehicle’s place in a lane, the vehicles around it, road infrastructure like traffic lights, and myriad other details that drivers now take into account as they control their car.
A MIXED QUARTER
TomTom had some good news to report as it released its second quarter results in July. It renewed and extended a global agreement to provide Apple with maps and other services, and it announced its telematics service had surpassed 500,000 subscribers, a 28 percent increase from a year ago.
However, the quarterly numbers were mixed. TomTom reported revenues of $287 million, a five percent rise compared with second quarter 2014, but profits tanked more than 70 percent to $2.7 million. Its automotive division scored second quarter 2015 revenues of nearly $29 million, down 15 percent from a year ago.
The firm said it expected to complete by the end of 2015 a remake of its mapping system that will better position it to serve the automated driving industry.
TomTom has been moving into the driverless sector but it lags HERE, whose maps are used in 80 percent of in-vehicle navigation systems in the U.S. and Europe (See “Will Nokia’s HERE Map the Future of Driverless Cars?” April 2, 2015).
Rumors swirled that Apple, Uber and China’s Baidu had bid on HERE. Nokia sold HERE to focus on its mobile-phone network equipment. HERE had been a money loser for Nokia since it bought it for $8.1 billion several years ago.
Audi, BMW and Daimler to Buy Nokia’s HERE Mapping Technology
Wall Street Journal/Ars Technica
Apple Ups Driverless Trans Stake With Two Buys
Stephen Feyer
Apple Inc. won’t say if it is working on driverless car technology, but two recent acquisitions suggest that the Cupertino, Calif.-based tech giant is doing exactly that.
News broke today that Apple bought Metaio, a German firm that offers ‘augmented reality’ technology for such clients as BMW and Macy’s. Metaio began in 2003 as a Volkswagen project, according to reports.
Augmented reality offers navigational directions, computer-generated, three-dimensional images, and other visuals.
Coherent’s technologies included “iGPS”, a system that combines signals from traditional GPS satellites and Iridium’s communications satellites to provide a location service with greater accuracy and signal strength than can be provided by GPS alone.
Whereas consumer GPS applications are limited to accuracy of about three meters, iGPS could provide location to a few centimeters – potentially accurate enough to guide a self-driving vehicle.
Apple has not commented on how it plans to use Coherent’s technology, which could also support location-based services delivered via smartphone. Over the past several years, Apple has used acquisitions as part of a strategy to eliminate its reliance on Google Maps.
With location playing an increasing role in companies’ strategies and services, Apple is not the only big player trying to create its own expertise in mapping. Nokia has attracted several bidders for its HERE subsidiary.
A number of firms, including Apple, have expressed an interested in purchasing HERE, with the price cited in the media of $3.5 billion.
In addition, a consortium that includes BMW, Audi, Mercedes-Benz, and Baidu, has publicly declared its interest in buying HERE. Audi has invited other automakers to join their bid. HERE provides navigation data for 80 percent of new vehicles, and in-car systems provide the bulk of revenue for HERE.