TRA - Turners Automotive Group

[winner (n)]

Hey Waltz, what does your Claude say about Ebos

If he's on same page as me I might make the effort to use him or something similar.

[Dolcile]

My goodness - turners goes up while market is down.  Juicy dividend on its way too. 

[Basil]

I topped up with some more late last week.

[mike2023]

Me too. I figured this morning, at $7.30 yesterday's close, with a rise of 1 cent per quarterly plus credits TRA is paying 7.1%

[Basil]

FY26 year already half way through. It's very important to look ahead with growth companies.

Based on average analyst expectations, even after yesterday's all time high, TRA is trading on a FY27 PE of only 13 2.

That is for a company with a 5 year proven CAGR in eps of 12% and a 10 year CAGR in dividends of 14% per annum.  Lots more expansion and market share gains coming in the years ahead as well as an improving economy.

By my estimates gross yield in FY 27 is just on 7% rising to 8% the following year.

I made the decision to invest more in high quality well managed companies with management that I really trust and who have earned my upmost respect than chase tech.

[Dolcile]

Turners just keeps pleasing :-)

[Waltzing]

its going up because of lack of other options except Ports and fruit... the Hort sector...

and we thought we had time to build more ....plenty of time said AI.. not due to take off till 27-28....

rebalance in the next 12 to 18 months.... right...

[winner (n)]

I'm beginning to wonder if TRA share price getting a bit 'overpriced'

Both PE and P/B ratios reaching record highs ...just like profits eh. Need to put the P/B ratio has only grown at about 4% pa over the hast few years

Whatever as long as OCR cuts keep coming we should be OK ...but what happens when rates start going up next year

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[winner (n)]

Half year result about a month away

They said 'tracking for 10%+ earnings growth' a while ago

Wonder how how much over the 10% they are tracking ...if quite a bit more migh5 need to provide an update in next week or so

[Left Field]

I'm beginning to wonder if TRA share price getting a bit 'overpriced'

Crikey.....take care Winner. Dangerous talk.

[Basil]

A couple of thoughts.  10%+ eps growth leaves the gate wide open on the plus side and I don't see any need for them to update the market.

As to the PE, in my view Turners history is made up of two parts.  Part 1 Before the brilliance of the Tina marketing campaign, and part 2, afterwards.  CAGR in EPS has been 12.3% since Tina kicked off.  What's a fair PE for a company able to grow earnings at that rate despite the most challenging 5 year period of trading, (arguably ever), but certainly since the GFC ?  Briscoes has no growth in EPS over that timeframe but trades on a PE of 21 and Rod is looking tired and old so their are succession issues in the medium term to consider as well. 

Market is forward looking.  Important to think ahead as FY26 year is more than half done and dusted.  Based on FY27 average broker forecast Turners trades at just 13.2 times earnings.  I reckon that's very cheap for a company and management team that have earned the respect to be considered a blue chip stock.  Then there's their 10 year track record of CAGR in dividends of 14% per annum for the dividend hounds like me to consider. 

Winner - What makes you think interest rates are going up next year ?  NZ economy is so weak it needs several years of ultra low interest rates is how I see it.

I think Turners will comfortably surpass average analyst expectations as the economy finally starts to gradually recover with lower interest rates and I think its a compelling long term hold.   Disc: Very happily holding a large 16.5% portfolio position.

[winner (n)]

Winner - What makes you think interest rates are going up next year ?  NZ economy is so weak it needs several years of ultra low interest rates is how I see it.

Yes the New Zealand's economy needs a boost, and lowering the cost of servicing our household debt could help in the near term....but the cuts so far haven't really done much to consumer spend has it so what's going to change now.

But further cuts are unlikely to lift the economy in any sustainable way. In fact, if history is anything to go by, it's more likely to reduce the country's future potential growth rate.

Borrowing for consumption doesn't create wealth

We need investment in new machinery, technology, and systems to increase growth potential and to productivity over time. In short, investment turns effort into progress.

And sadly these the country lacks effort ....government, business and individuals.

If OCR got down to 2% or less where does NZD go and what happens to inflation? No doubt OCR will go up again and seeing productivity won't have improved country really in shit eh.

[Basil]

Economists seem to think there's a 6-12 month delay before OCR cuts have any effect. We should start to see the benefits gradually come to fruition over 2026 but more so in 2027 and 2028. There is a very clear need, in my opinion for a prolonged period of very low interest rates due to the fact we've bene in a deep recession for many years, especially on a per capita basis.  I get it that this recession feels like it will never end, I really do but there are emerging signs that retail spending is starting to lift a bit.

[HAWKDOG]

I'm in the interest rates going up next year camp as well.  Don't have a crystal ball but if we are going into a commodity boom and oil prices go up - inflation is going to rise.

I'm in a holding pattern with TRA - love how its performed to date.

[Umpah]

Election year? Mortgage rates? Would be a brave decision