Valeo (FR.PA, VLEEF, VLEEY) released it's 3rd quarter 2020 earnings last week.  It's sales volumes were down 5% in line with the automotive market.  Significantly, this was the first quarter since the start of 2018 when it did not gain market share.  With investors' mood generally turning more bearish, any sign of weakness is taken as an excuse to sell, and this failure to outperform cause the stock to drop 3.5% on the day.

I don't consider this miss to be serious, since it was mostly driven by product mix and exposure to Nissan (NSANY) and Hyundai (HYMTF) in the US and Asia rather than underlying fundamentals of the business.  For the full your, management continues to expect 5% outperformance compared to a 3% contraction for the automotive sector in general.  

Under normal circumstances I might consider this speedbump as a potential buying opportunity, but the fully year automotive sector projection comes from IHS and does not include the risk of the second global Covid-19 wave which we are seeing as winter hits the Northern hemisphere.  Combine that with my general bearish outlook on valuations, and I'm continuing to watch and wait.

If the market sell off I've been anticipating materializes, Valeo is is one company I'll be looking to ride on the way back up.