TRA - Turners Automotive Group

[Dolcile]

that auto shop thing does not seem like core business... can it be dumped???

It is a new investment.  Needs some time to grow.

[Dolcile]

And new High     

[Basil]

It is a new investment.  Needs some time to grow.

Indeed it does.  On the last call Todd talked about the time they were saving servicing their own fleet of cars onsite so there's that payback as well.  Give it a few years and I think this will be a useful addition to the other divisions in terms of being eps accretive. 

[Waltzing]

------- 8.26 -------

Is the market expecting an increase to the Dividends this year? Looks like it...

[alkebab]

------- 8.26 -------

Is the market expecting an increase to the Dividends this year? Looks like it...

Lately, especially in the last month or so, you get a few days where there are zero sellers for a good part of the day. Very odd. And those that do sell, so long as the price isn't too extreme, gets snapped up quick taking it up to $8.30 yesterday.

[Basil]

------- 8.26 -------

Is the market expecting an increase to the Dividends this year? Looks like it...

Recent guidance was for 32 cps+, fully imputed so at say 33 cps, that's 45.83 cps gross which is 5.7% gross yield at a share price of $8 which is very attractive for a growth company that has a decade long track record of growing dividends at a 14% CAGR.  We're basically at the three quarter point of the FY26 financial year so investors should be thinking about FY27 and FY28 EPS and DPS not focused on the immediate yield.  Craigs forecasting EPS and DPS of 57 CPS and 37 CPS in FY28 and I think there's very good prospects TRA will comfortably exceed that.

[Basil]

Business confidence hits a 30 year high ! https://www.rnz.co.nz/news/business/582323/business-confidence-rises-to-30-year-high  Maybe some of those business owners might think its a good time to buy a major item like a car ?

[winner (n)]

At end of December 2022 TRA share price was $3.55 and trading at 1.15 times it Book Value of $3.07

Some 3 years on the Book Value is $3.42 - 11.4% higher

If TRA traded at same multiple as at Dec 22 its share price would be $3.98 today

Buts trading at $8.15 - $4.60 higher

Could say $0.40 due to company performance (increase in Book value) and $4.50 from a massive market rerate (multiple expansion from 1,1 to 2.4)

Market rerate a reward for consistent growing ... and a bit of market love

Well done Turners

[Dolcile]

I think it just points to the fact that accounting book value doesn't reflect the fair value of the company.

[Basil]

Share prices follows EPS and the rate of growth in same in the past as well as the predictability of future sustainable EPS growth.     NTA is not especially all that relevant in many cases, (not all cases).  REIT's and listed investment trusts are good examples where NTA is highly relevant.  Some people think the NTA of retirement villages is highly relevant.  I am not one of them.  Return on assets is so appallingly low all that really matters is EPS for them in my opinion.
A couple of good examples to illustrate my point.
Net Tangible book value of assets per share FPH $3.09
Net Tangible book value of assets per share EBO $-0.34
That said, there is a case to be made that NTA is relevant to some extent with TRA in regard to its finance book and property assets but in my opinion TRA has well and truly earned its current pricing status.

[winner (n)]

Share prices follows EPS ........

   NTA is not especially all that relevant in many cases .....

Agree but if share prices follow EPS they also follow Book Value BV. BV is the value of shareholder equity

BV is not NTA in most cases In TRA case BV is about$3.45 v NTA of $1.75

 EPS is Earning per share. PE is Price/EPS. P/B is BV per share (Price//BV)

Could say the E = BV x ROE and if one does a bit of algebra you can see the relationship between P/B and PE

TRA PE and P/B move together. I've posted a cool chart a while ago.

I think there's real value in following BV. It is a reflection of how earnings are growing but importantly how much profits are retained to continue growing the business.

That's today's little rave

[Basil]

Grant Baker reflects on Turners success and other companies he's owned over the years and his love of Ferrari's.  Paywalled.  https://www.nzherald.co.nz/business/companies/banking-finance/turners-boss-grant-baker-on-buying-dorchester-42-below-deal-and-his-love-of-ferraris/premium/7XRLWJTSNZHWTCAOZ47REJBHW4/

[Shareguy]

Grant Baker reflects on Turners success and other companies he's owned over the years and his love of Ferrari's.  Paywalled.  https://www.nzherald.co.nz/business/companies/banking-finance/turners-boss-grant-baker-on-buying-dorchester-42-below-deal-and-his-love-of-ferraris/premium/7XRLWJTSNZHWTCAOZ47REJBHW4/

Great article. Happy to finally be on board.

[Basil]

Back over $8.30 after going ex an 8 cps dividend last week.  Very impressive company !

P.S. That comment didn't age well lol

[Dolcile]

I completely forgot about the pending dividend.  Love the quarterly distributions!