TRA - Turners Automotive Group

[Waltzing]

 how are car prices holding up?

retail QTR by year end will be intersting but we know Winner() will be all over them stats..

Dont imagine the T car will arrive on an auction lot anytime soon...

https://www.cnbc.com/2023/10/30/tesla-shares-drop-5percent-on-panasonic-battery-warning.html

ever seen a char pointer not get its assigned value?

Oh look MA the auto pilot took us where?

Oh you think RAM is stable all the time ...  ooops why did we just drive into that ditch...

[Basil]

Interesting commentary on CNBC this morning that EV sales are really starting to slow.
Working theories include that most early adopters have already bought, and the high up front capital cost is also an issue as is the high cost of finance.  Another theory for the slowdown in America that was espoused was that many Americans like their huge pick-up trucks that have poor aerodynamics, (which appears to be way most manufactures have stayed away from producing these sore of EV's due to the limited range with that sort of vehicle).

The risk of fire that's extraordinary difficult to extinguish wasn't mentioned but I can't help feeling this is also an underlying concern especially for those charging in a garage in their home.  If there's a fire it's going to burn the whole house down and if you're sleeping in a bedroom positioned close to the garage...

[kiwi2007]

From the UK: Not sure whether it applies here though?

   Average electric car insurance costs rose 72 per cent in the year to September, compared with 29 per cent for petrol and diesel models, according to Confused.com. The price comparison site notes that premiums for Tesla Model 3s, the most quoted EV on the site, rose more than two-thirds in the past two years.

EV claims are typically 25 per cent higher than combustion equivalents and take 14 per cent longer for repairs, according to research from Thatcham.

A combination of high costs and volatile outcomes means many EVs are simply being written off for damage that traditional vehicles would survive.

As higher insurance makes EVs less attractive, adoption rates will adjust accordingly.

[Waltzing]

Looks like also on CNBC was a discussion of powering all the new clean engery and Nuclear came up as the most powerful solution and one wonders how India will cover all those new EV motor bikes and cars they manufacturing....

EV is coming but where is the power going to come from ...

Lot of PE cars still out there and how long is the market going to be able to absorb them.. 5=10 years?

[BlackPeter]

Looks like also on CNBC was a discussion of powering all the new clean engery and Nuclear came up as the most powerful solution and one wonders how India will cover all those new EV motor bikes and cars they manufacturing....

EV is coming but where is the power going to come from ...

Lot of PE cars still out there and how long is the market going to be able to absorb them.. 5=10 years?

If I correctly remember Indias geography, they have plenty of space in sunfilled areas to mount solar systems, and some parts have as well quite reliable wind (monsoon) to run wind generators. Both sources of energy quite suitable to recharge electric vehicles.

[Waltzing]

Off TOPIC:

 YUP .... lots of spaces out there ... that means laying lots of power lines..

[Onemootpoint]

Taking advantage of he last days of the clean car rebate or flood claims.....

"Car sales were surprisingly strong in October. 10,055 new passenger cars were sold in the month, plus 9,657 used imports. Both were sharp increases from August, but the new car sales were -6.6% less than the hot September a year ago. The average for the prior ten years for a September is 9,400 in the month. Used imports were up +33% from the same month a year ago."

https://www.interest.co.nz/economy/125035/review-things-you-need-know-you-sign-wednesday-jobless-rate-rises-pay-rates-fsr

[Basil]

One month to the day today, in my opinion there's a 95%+ likelihood it will be announced that TRA are to be included in the NZX50. 

[Waltzing]

Interesting chart ...

[Basil]

Great minds think alike.  I was looking at the chart this morning.  30 day MA right on $4.00.  If $4.00 holds, (and I think it will), we're still in an unbroken uptrend.

Less than 3 weeks until they report on Wednesday 22 November.  Very interesting they brought that reporting date forward 2 days, (never seen that before from any company that I can recall). Is that a sign it's good news ?  You be the judge.

[Waltzing]

chart looks like if inclusion it will spike but then has a BIG back fill   ... as GUY A on CNBC would say...

[Basil]

Its still in an unbroken uptrend on the chart and there's the well discussed index inclusion to come but I'm concentrating on the fundamentals.  Forward PE at $4.10 is in the low 10's for a company with a CAGR of 7% in eps for the last decade, (faster eps growth since the multi award winning Tina marketing campaign started), and gross yield in the high 8% range.  You are being paid handsomely with yield that I am very confident will grow in the years ahead, (dividends have grown 40% in recent years) to enjoy the growth in earnings and dividends in the years ahead.

I think this is a very well-managed company trading on a compelling valuation.  A classic GARP company opportunity that's proved it has an extremely robust business model even in exceptionally challenging economic times.  I'm really looking forward to seeing how high it flies when economic conditions improve, and the interest rate cycle provides tailwinds to their finance book margins.

It was good to see the largest shareholder took shares in lieu of dividend in the recent dividend.  Next dividend is in January. 

Disc: Added a few more this morning.  My #1 investment position in the market.

[Mos]

Its still in an unbroken uptrend on the chart and there's the well discussed index inclusion to come but I'm concentrating on the fundamentals.  Forward PE at $4.10 is in the low 10's for a company with a CAGR of 7% in eps for the last decade, (faster eps growth since the multi award winning Tina marketing campaign started), and gross yield in the high 8% range.  You are being paid handsomely with yield that I am very confident will grow in the years ahead, (dividends have grown 40% in recent years) to enjoy the growth in earnings and dividends in the years ahead.

I think this is a very well-managed company trading on a compelling valuation.  A classic GARP company opportunity that's proved it has an extremely robust business model even in exceptionally challenging economic times.  I'm really looking forward to seeing how high it flies when economic conditions improve, and the interest rate cycle provides tailwinds to their finance book margins.

It was good to see the largest shareholder took shares in lieu of dividend in the recent dividend.  Next dividend is in January. 

Disc: Added a few more this morning.  My #1 investment position in the market.

Agree with your thesis Basil and have built a solid holding for long term income and growth. The successful brand campaign should underpin increasing share of sourcing used cars translating to increasing market share in existing locations and the rolling out of new locations in smaller centres/towns is adding new earnings streams. On top of this, as you point out, when the financing margins headwinds change to tailwinds we should see a solid boost to earnings from that important component of the business. With a PE of circa 10-11 there seems to be minimal downside and meaningful upside based on fundamentals driving long term earnings growth aside from the short term boost of likely index inclusion. On this last point, Craig's have this morning added TRA to their Baker's Dozen portfolio which will add support ahead of likely index inclusion "We are ... adding TRA due to the catalyst for TRA in December of expected NZX50 index inclusion.TRA has already started to run ahead of this event but still trades on a PE of 11x and we see it getting squeezed higher on thin liquidity."

[Crackity]

Agree with your thesis Basil and have built a solid holding for long term income and growth. The successful brand campaign should underpin increasing share of sourcing used cars translating to increasing market share in existing locations and the rolling out of new locations in smaller centres/towns is adding new earnings streams. On top of this, as you point out, when the financing margins headwinds change to tailwinds we should see a solid boost to earnings from that important component of the business. With a PE of circa 10-11 there seems to be minimal downside and meaningful upside based on fundamentals driving long term earnings growth aside from the short term boost of likely index inclusion. On this last point, Craig's have this morning added TRA to their Baker's Dozen portfolio which will add support ahead of likely index inclusion "We are ... adding TRA due to the catalyst for TRA in December of expected NZX50 index inclusion.TRA has already started to run ahead of this event but still trades on a PE of 11x and we see it getting squeezed higher on thin liquidity."

Bakers dozen 😂

[Basil]

Bakers dozen 😂

LOL, speaking of the rich and famous and Grant Bakers well known love of Ferrari's I see on CNBC this morning the market cap of RACE (Ferrari's ticker code), exceeds GM or Ford despite them being a niche manufacturer only making 15,000 cars a year!  Apparently, they are making massive margins selling limited edition Ferrari's for $4-5m (presume that's $US) to enthusiasts and all production is sold out through to the end of 2025 including for their "regular" models !  Amazingly, this despite well-known high end brands Porsche and Aston Martin recently reporting softening demand.

Meanwhile back in the real world for us mere mortals lol.
Thanks for your comments Mos.  Brand campaign's an interesting thing to watch build successfully over the years.  Love the way Rod Duke has used Tammy over the years to build brand value with Briscoes.  Nothing like a relentlessly positive and highly relatable personality to build brand value over time eh.  Bit of humour like Turners construct with their Tina campaign goes a long way too.  Right at the start I could see how successful the Tina campaign was going to be so strongly encouraged Todd to lock our star into a long term contract.
P.S. I think they're going to do eps of 39-40 cps this year so on a PE of 11 that's $4.29 - $4.40.  Deserves a higher multiple than that in my opinion.