Herbert Weir Smyth, A Greek Grammar for Colleges

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[*] 278. Stem Variation.—Stems ending in ευ, αυ, ου lose υ before case endings beginning with a vowel, [υγλιδε] passing into ϝ (43). Stems in ευ show the pure form only in the vocative; other forms are derived from the stronger stem ηυ. ηυ and α_υ before a consonant become ευ, α^υ (40) as in βασιλεύς, βασιλεῦσι, ναῦς, ναυσί from βασιληυς, να_υς, etc. From βασιλῆ（ϝ）-ος, -ῆ（ϝ）-ι, -ῆ（ϝ）-α, -ῆ（ϝ）-ας come, by transfer of quantity (34), the Attic forms. So νεώς is derived from νη（ϝ）-ός. In βασιλέων, νεῶν, ε is shortened from the η of βασιλήων, νηῶν by 39. βο-ός, etc. are from the stem βου- βοϝ-, cp. Lat. bovis.