On May 31 the Financial Times published an interesting article on Renault called Renault: carmaker is running on empty (free registration may be required)

The article describes how the share price of Renault has underperformed the auto sector by 66% over the last 10 years.

Quite a performance.

But this has made the company?s shares very cheap.

According to Morningstar the company is valued as follows:

Price to Earnings ratio: 3,1
Expected Price to Earnings ratio: 4,6
Price to Book ratio: 0,5
Price to Cash flow: 5,3

I think you will agree it looks cheap. But it has been like that for a long time.

What really caught my eye in the Financial Times article thought was this calculation:

If you subtract the market value of Renault?s investments in Nissan, Avtovaz of Russia, Daimler and Volvo, the remaining value for Renault (the French carmaker) is minus ?15 a share.

Unbelievable.

This means if Renault sells all its investments in other car companies, just these are worth ?15 per share more than what the Renault share price is at the moment.

Not a bad idea for a patient investor.