What have Ferrari, Lamborghini, Porsche and Bugatti and Rolls Royce got in common? Well, they are all top end luxury motors with eye-watering list prices, so the answer is, I guess, lots. And yet in terms of the value the stock market is placing on them Ferrari is priced like, well, like a Ferrari, while the rest might as well be rusty, second-hand Mini Metros.
So what is it about Ferrari that makes it a better stock market bet than its illustrious rivals? Why is it that Ferrari deserves a multiple of circa 40 times earnings whereas the likes of Daimler and BMW, owner of Rolls Royce, trade at under ten times forward price to earnings?
If Ferrari can IPO at astronomic multiples then surely Volkswagen needs to unload Bugatti and Lamborghini immediately in order to achieve anywhere near the implied sum-of-the-parts that Ferrari's over $10 billion valuation indicates. Volkswagen's stable of premium brands is surely seriously undervalued if its Italian counterpart's value is sustainable, and with VW in such big trouble why wouldn't the Wolfsburg-based automaker take advantage?