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Growing Driverless Stock Index (D20) Reflects Dynamic Industry

Driverless Transportation

We have some exciting changes in the Driverless Transportation D20 Index to announce. First off, we are replacing three companies in the index and making the D20 more international in scope. We also changed the basis for our calculation of the D20 Index, moving to a dollar averaged approach.

The three new stocks in the D20 are:

  1.  Amsterdam-based TomTom (TOM2) is traded on the Amsterdam Stock Exchange. It replaces Nokia (NOK) which is selling its Here mapping division, its only business involved in driverless or connected vehicles. TomTom, known for its popular aftermarket GPS turn-by-turn directional devices for cars, has three units that are involved with driverless technology – the auto unit provides components such as maps, traffic and software to auto OEMs; the licensing group leverages maps, traffic and navigation content and services; and the telematics unit is dedicated to fleet management and vehicle telematics.
  2. Ontario, Canada-based Magna International (MGA) is traded on the NYSE. It replaces the lightly-traded KVH Inc. (KVHI), a business that primarily delivers ISP services for hotels, resorts and ships. Magna has a large and growing electronics division which focuses on driver assistance systems, as well as systems to support power-train electrification. It manufactures electronic, electromechanical and mechatronic products, and provides software and hardware development.
  3. Tokyo-based Renesas Electronics (TYO: 6723) trades on the Tokyo Stock Exchange. It replaces Iteris (ITI), a lightly-traded firm that provides intelligent transportation systems for municipalities. Renesas was formed through a merger of NEC Electronics Corp., and Renesas Technology Corp., (a joint venture of Hitachi and Mitsubishi Electric). Renesas Electronics is a semiconductor manufacturer that designs, develops, manufactures, sells and services microcontrollers for the automotive industry.

The D20 Index now has companies — TomTom in Amsterdam and Renesas in Tokyo — with stocks that are primarily listed on non-US exchanges and use foreign currencies for prices. To calculate the D20 and include these stocks we convert the non-US stock prices (Euros and Japanese Yen) to US dollars using a current conversion ratio. The values were: Euro – currently 1.136 dollars per Euro; and Japanese Yen – currently .00829 dollars per Yen.

CALCULATING THE INDEX

We have changed the basis for calculating the D20 Index. Previously, the value of the D20 was calculated by using one share of stock from each of the 20 stocks in the index. With the new dollar-averaged approach we track the value of $1,000 invested in each of the 20 stocks. And on August 28, 2015 we started with roughly a total of $20,000 invested equally in the 20 stocks ($1,000 per company) in the D20 Index.

 

Name

 

Symbol

(As of 8/28/2015)
Share Price Shares Currency Conversion Value
BlackBerry Ltd BBRY $             7.37 135.690 1.000 $           1,000
BYD COMPANY LTD ADR BYDDY $             8.44 118.480 1.000 $           1,000
Continental AG (ADR) CTTAY $           42.86 23.330 1.000 $           1,000
Daimler AG (USA) DDAIF $           80.70 12.390 1.000 $           1,000
Delphi Automotive PLC DLPH $           75.35 13.270 1.000 $           1,000
Denso Corp (ADR) DNZOY $           22.69 44.070 1.000 $           1,000
Ford Motor Company F $           13.73 72.830 1.000 $           1,000
General Motors Company GM $           29.01 34.470 1.000 $           1,000
Google Inc GOOG $       630.38 1.586 1.000 $           1,000
Magna MGA $           49.23 20.313 1.000 $           1,000
Mobileye NV Amsterdam MBLY $           56.42 17.724 1.000 $           1,000
Nissan Motor Co., Ltd. (ADR) NSANY $           18.31 54.620 1.000 $           1,000
NVIDIA Corporation NVDA $           22.73 43.990 1.000 $           1,000
Tesla Motors Inc TSLA $       248.48 4.025 1.000 $           1,000
TomTom TOM2 €             8.97 100.010 1.115 $           1,000
Visteon Corp VC $       100.49 9.950 1.000 $           1,000
VALEO SA (ADR) VLEEF $           63.66 15.710 1.000 $           1,000
Volkswagen AG (ADR) VLKPY $           38.32 26.100 1.000 $           1,000
Volvo AB (ADR) VOLVY $           10.94 91.410 1.000 $           1,000
Renesas TYO:6732 ¥       708.00 168.008 0.00841 $           1,000

Why the change? We found that with the one-share approach the stocks with the highest prices, i.e., Google, trading over $600, and Tesla, over $250, could swing the D20 wildly with just a small change in their pricing. The dollar-average approach means each company in the D20 now makes up about five percent of the index’s underlying value.

Why didn’t the D20 Index change radically when we switched the basis? We have always used a divisor with the D20 Index, and it started as 10.0. That meant we added up all the stock prices at the close of the trading day and divided by 10. To switch to the new dollar-average approach we changed the divisor so the new D2’s underlying value would be the same as the old D2. So on August 28, 2015 we used the closing stock prices to find the value of each of the two D20s, then adjusted the divisor for the dollar-averaged D20 so it had the same value as the old D20. The new divisor is 134.27296.

On September 4 we switched over to the revised D20 Index with the three new stocks and the new divisor.

Visit the Driverless Transportation D20 Stock Index page to learn more about it and its component stocks.

D20 Index vs Dow Jones week ending July 31, 2015

Quiet D20 Index Spends Week at the Beach

Driverless Transportation

The Driverless Transportation (D20) Stock Index had a quiet week as we neared August, rising only 0.34 points, or 0.2 percent, to finish at 153.016. Gainers outnumbered losers 11 to nine. This was the first week in the last six where Google (GOOG) didn’t mathematically dominate the D20 Index by being its absolute or percentage gainer or loser. Those leadership honors went to four other firms:

One notable streak was extended as BYD Company (BYDDY) fell for the seventh straight week. Although Volkswagen (VLKPY) announced that it had edged out Toyota for the title of largest automaker worldwide in the first half of 2015, it still lost $1.42 to close the week at $40.02.

Blackberry was strong, adding $0.41 or 5.6 percent, amid a lot of discussion in the press about how it should get out of the phone business. Other pundits think that the driverless car market will be Blackberry’s salvation as its QNX operating system continues to win market share away from automobile infotainment system rivals.

Visit the Driverless Transportation D20 Stock Index page to learn more about it and its component stocks.

Industry Preps for Automated Vehicles Symposium 2015

Driverless Transportation

The Automated Vehicles Symposium 2015 is coming on fast, and will be held July 21-23 in Ann Arbor, Mich., sponsored by Automation for Unmanned Vehicle Systems International (AUVSI) and the Transportation Research Board (TRB), and held at the University of Michigan. There are also ancillary meetings scheduled for July 20, and July 24.

The AVS15 describes itself as “a multidisciplinary forum designed to advance the deployment of automated vehicles.” The keynote address on Wednesday, July 22 will be given by Chris Urmson, leader of Google’s self-driving cars efforts.

The AVS15 will also offer a number of break-out sessions that are closed to the media.

AVS15 benefactors are AutonomouStuff, Bosch, Continental, Denso, KVH, Magna, Munich Re, Realtime Technologies, Tass International, and Velodyne.

Learn more about the Symposium.

POSTER SESSIONS

AVS15 will offer two poster sessions, giving exhibitors the opportunity to showcase and discuss their work with colleagues. Abstracts for both sessions are due by June 7, and peer review decisions will be announced by June 21.

The first poster session will be held on Tuesday, July 21. It is designed for peer-reviewed research posters, with a presentation of a completed project that takes a similar approach to an academic journal or a Transportation Review Board poster session.

The second session will run on Wednesday, July 22, and cover a broader range of content, from introductions to research centers, to works in progress, to proposed studies.

The AVS15 website provides further guidelines and submission requirements for each poster session.

D20 Stock Index

Tesla Sends Driverless Stock Index Higher

For the third week in a row, the Driverless Transportation D20 Stock Index advanced, rising nearly 1.3 percent to finish at 142.197. This broad-based advance brought 18 gainers and two losers — Google (GOOG) and KVH Industries (KVHI). Google was the week’s absolute loser, dropping $10.06, or 1.8 percent, to end the week at $538.95. KVH, the mobile data services provider, lost 1.9 percent, to be the leading D20 percentage loser this week and finishing at $12.86.

D20 Weekly

Tesla (TSLA) made up almost all of last week’s loss by gaining $13.34, or 6.6 percent, to end the week as the absolute winner at $217.11. China’s BYD Company (BYDDY) gained impressively, adding 15.2 percent, or $1.14, to finish at $8.66. Time will tell if Warren Buffett’s $230 million investment in 2008 in this Chinese Electric Vehicle company will pay off. Volkswagen (VLKAY) had a strong week, rising 6.2 percent, or $3.01, to finish at $51.36 for the first time since the inception of the D20 Index. Volkswagen continues to challenge Toyota for the global top spot in car production finishing 2014 at 10.14 million vehicles compared to Toyota’s 10.23 million.

This week we compare the D20 Index to the NASDAQ ETF CARZ, an exchange traded fund that tracks the NASDAQ OMX Global Auto Index. CARZ is a modified market-capitalization weighted index designed to track the performance of the largest and most liquid companies engaged in manufacturing of automobiles. Its top five holdings are stock from Daimler AG (DDAIF), General Motors (GM), Honda (HMC), Toyota (TM) and Ford (F). The D20 Index will track closely to the CARZ price increases or decreases because five of the top 10 holdings in CARZ are reflected in the D20 Index.

CARZ-v-D20-2015-02-20

 

 

Visit the D20 Stock Index page for more information.

 

NVIDIA Goes All In on Driverless Technology

Stephen Feyer

D20 Index vs NVIDIA

NVIDIA is synonymous with high-performance graphics chips. Can it dominate the chip market for autos too?

Founded in 1993, NVIDIA Corp. (NVDA) is a leader in chipsets for visual processing. Its chipsets are used in video game consoles, computer-aided design, digital image processing, and in research applications. The company also manufactures a system-on-a-chip for mobile devices and auto manufacturers.

NVIDIA has targeted the automotive sector as an area of future growth. Today, NVIDIA sells its DRIVE platform, based on its Tegra system-on-a-chip technology, to OEMs and suppliers. Tegra is used to operate in-vehicle entertainment units, advanced driver assistance systems, and instrumentation. The company lists 19 automotive partners on its website including Honda, BMW, Volkswagen, Porsche, and Tesla.

In January 2015, at the International Consumer Electronics Show in Las Vegas, NVIDIA founder and CEO Jen-Hsun Huang announced the Drive PX platform, a new system designed to operate an autonomous vehicle. The system uses two Tegra X1 chips that can process high-definition images from up to a dozen cameras at once, allowing it to serve as the “brain” of an autonomous vehicle using visual sensing instruments. Built-in algorithms include “deep learning” object recognition.

Over the last two years, NVIDIA’s NASDAQ-listed stock has steadily risen, moving from $12 at the end of 2012 to around $20 at the beginning of February 2015. NVIDIA’s market cap stands at over $10 billion.

Public since January 1999, NVIDIA first began paying a dividend in the first quarter of 2013, offering an annual yield of about 2 percent since it initiated the payout.

In fiscal 2014, NVIDIA reported income of $0.75 a share on revenue of $4.13 billion. Both numbers were down from 2013, when the company reported $0.91 EPS on revenue of $4.28 billion. Fiscal 2014 represented a second consecutive year of declining EPS.

The revenue loss is due to a 48 percent drop in the Tegra system-on-a-chip business, falling from $764 million in 2013 to $398 million in 2014. Much of the decline can be attributed to a delay in the launch of the Tegra 4 line of processors while the Tegra 3 line was phased out.

However, sales have also declined because Tegra is a high-end system competing against rivals Intel and AMD in the price-conscious mobile-chipset market. In response to these challenges, NVIDIA has turned to the automotive sector where its advanced processors and specialized software work well in driverless transportation systems.

In 2014 NVIDIA went all in on research and development, committing nearly three-quarters of the company’s 8,800 employees to the effort, and increasing spending to $1.4 billion, up 20 percent from just two years ago.

With a desire to reinvigorate its Tegra line in the auto industry, and a greater push in R&D, NVIDIA is positioning itself as the key technology behind the next generation of computerized cars, including driverless cars. NVIDIA maintains a sense of humor despite its challenges: its development kit for automotive applications such as infotainment, instrumentation, and ADAS is called “Jetson”.

NVIDIA is categorized in the technology group of the D20 Stock Index, which also includes Blackberry Ltd, (BBRY), Iteris, (ITI), KVH Industries (KVHI), Nokia Corp. (NOK), and Mobileye (MBLY).

Stephen Feyer is a James R. Swartz Entrepreneurial Fellow and MBA at Carnegie Mellon University’s Tepper School of Business.

This article is part of the Driverless Transportation series profiling the stocks that make up the Driverless Transportation D20 Stock Index, the only index that tracks the major publicly-traded firms in the autonomous driving industry worldwide.

 

Mobileye

Mobileye Grows in Autonomous Vehicle Sector

Burney Simpson

This is the first in a series of articles profiling the stocks that make up Driverless Transportation’s D20 Stock Index, the only index that tracks the major publicly-traded firms in the autonomous driving industry worldwide.

All eyes are on Mobileye.

The Israel-based designer and developer of what it calls camera-based Advanced Driver Assistance Systems (ADAS) is being watched closely by investors, original equipment manufacturers (OEMs), competitors, and those following the progress of the autonomous vehicle industry.

Mobileye emphasizes the safety aspects of its software and related technologies that are designed to reduce the risks of traffic accidents and save lives. Once installed, its proprietary software algorithms and EyeQ system-on-chip program interpret a vehicle’s visual field to anticipate possible collisions with other vehicles, pedestrians, cyclists, animals, debris and other obstacles.

Mobileye says its products also “detect roadway markings such as lanes, road boundaries, barriers and similar items, (and) identify and read traffic signs and traffic lights.” Mobileye expects to launch its EyeQ3 system early this year.

Mobileye (MBLY) is considered by many to be the only AV industry pure-play stock because its products are developed nearly exclusively for the autonomous transportation market. Its products are integrated into the vehicles of 18 global automakers including BMW, Chrysler, Ford, GM, Honda, Hyundai, Jaguar, Nissan, and Volvo. About 78 percent of Mobileye’s 2013 revenues came from vehicle OEMs, and the company estimated its products were installed in about 3.3 million vehicles worldwide.

The company filed a prospectus last year with the U.S. Securities and Exchange Commission in the lead up to its Initial Public Offering at $25 per share in the U.S. in July. MBLY stock rose to top $60 in October but has since come down to earth, and now trades in the $40 range.

In the third quarter of 2014, MBLY reported a net loss of $13.1 million on revenues of $34.7 million, up 70 percent from the same period in 2013. While revenues keep growing, the company has for much of its history operated at a loss, and has an accumulated deficit of nearly $101 million, primarily due to continuing investments in research and development. MBLY is scheduled to report its 2014 fourth quarter and annual results in February.

Many investors remain optimistic about the long-term payoff in the use of driverless transportation technology. Mobileye points to a number of success stories, including its 2013 deal with GE Capital Fleet Services to fit its collision avoidance system into the firm’s trucks operating in the U.S. and Canada. Mobileye technology is also in 800 trucks of the Ontario, Calif.-based ICEE Beverage Co., and in about 80 percent of the cabs in Las Vegas.

Fleets are an early sweet-spot for firms marketing autonomous driving technology because they are looking to reduce such collision costs as vehicle repair and replacement, higher insurance fees, driver injury, and the loss of business caused by an accident. Mobileye claims that drivers using its system also learn safer driving techniques.

The deal with GE will be fulfilled with after-market products. Other customers in this space include the fleets of C.R. England, Werner Trucking, Dart and Pride. Mobileye claims that more than 120,000 vehicles have installed its after-market products, and estimates that there are as many as 1 billion autos on the roads today that could be retrofitted with its technology. About 22 percent of Mobileye’s total revenues in 2013 came from its after-market sales.

Mobileye-560+icons1In the direct-to-consumer space, Mobileye markets on its website the Mobileye 560 Collision Avoidance System at $849 though it must be installed by a trained technician. The 560 offers forward collision warning, pedestrian collision warning, lane departure warning, speed limit indication, headway monitoring and warning, and intelligent high beam control.

Mobileye is categorized in the technology group of the D20 Stock Index, which also includes Blackberry Ltd, (BBRY), Iteris, (ITI), KVH Industries (KVHI), Nokia Corp. (NOK), and NVIDIA Corp., (NVDA).