Visteon Corporation supplies automotive systems, modules, and components to vehicle manufacturers and the automotive aftermarket worldwide. It offers various electronics products, including audio systems and components, such as digital and satellite radios, and HD radio broadcast tuners and premium systems; driver information systems comprising displays, from analog-electronic to high-impact instrument clusters that incorporate LCD displays; information, in-vehicle entertainment, and multimedia systems; powertrain and feature control modules; electronic climate controls, such as single zone manual electronic and automatic multiple zone modules, as well as integrated audio and climate control assemblies; and lighting products, which consist of headlamps, rear combination lamps, center high-mounted stop lamps, and fog lamps. The company also provides climate products and systems comprising heat exchangers, climate controls, compressors, and fluid transport systems; and cooling functionality and thermal management for the vehicle’s powertrain system. In addition, Visteon offers interior products, including cockpit modules, which incorporate structural, electronic, climate control, mechanical, and safety components; door panels/modules, as well as various interior trim products; and console modules, which deliver flexible and versatile storage options. Further, it designs and manufactures various products, including driveline systems, such as applications for all-wheel drive vehicles, and powertrain products and systems. The company was founded in 2000 and is headquartered in Van Buren Township, Michigan. Visteon Corp. operates independently of Ford Motor Co. as of June 28, 2000.

Discretionary Industry Analysis ► (edit / improve)

Description: The consumer discretionary stocks include companies whose sales come from consumer discretionary income purchases. Discretionary income = gross income less taxes and necessities such as rent, mortgage and food. Read More.

Profit Analysis: The best way to profit from discretionary stock investments is to find the most undervalued investments (Wall Street and Main Street buy ratings) during economic recessions. Those investments should be undervalued (see Wall Street on left side), and have high Main Street Common Sense investment ratings (see Main Street on right side). When an economic recovery occurs, discretionary stocks tend to outperform the general stock market, because consumers quickly resume spending on items they wanted, but resisted buying during tougher economic times. Eventually those investments become overvalued, because profits and stock prices increase past their fair values. In other words, the margin of safety becomes low or negative. During the last stages of an economic business cycle, just before a recession, it is best to sell discretionary stocks, because they are likely to decrease in price the fastest. Selling a stock investment is difficult to do properly. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments. As a general rule, the larger the investment potential (margin of safety), the safer the investment.

Trading Strategy: During economic recessions, consumers tend to cut back on discretionary expenses to save money. Less spending by consumers eventually decreases business revenue and stock prices. During economic recoveries, consumers have more discretionary income, so spending quickly increases. Higher spending increases business revenue and eventually increases stock prices. During long economic expansions, discretionary income increase, but at a slower pace than during the initial economic recovery stage.

¹ Investment potential (margin of safety) is a weighted average of the discounted cash flow (DCF), the enterprise value (EV) market multiple, and the Warren Buffett investment methods.
² The weighted average cost of capital (WACC) for the industry is a broad representation of the WACC for each individual company. A sub-industry WACC offers both stability and accuracy for each individual company.

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