I found the newsletter an interesting read.
I continue to be impressed with TRA's business model.
I agree, they look pretty good, and like the idea of the new partnership they are announcing with repairers (in the newsletter), all good opportunities to leverage more revenue out if existing relationships with their customers.
I agree in isolation the newsletter made for a good read and on the face of it they're following some good logical strategies with their brand development and product offer.
I even started to get a little excited myself but then when you run the ruler over it on a comparative basis to CMO it gets far less compelling.
I see eps more or less static for FY18 for TNR and have them on a forward PE of 11.7
On the other hand CMO by my estimate is on a forward PE of just 10.0 and at the half year they grew EPS by a whopping 19.5%. Further, they have a very good track record of growing EPS over the years whereas TNR have a shorter track record of growing profit with very minimal if any growth in EPS.
Summing up. In isolation TNR looks okay and one would hope that after the long decline in the SP it found a bottom at ~ $2.80 recently and is on its way back up but I note it still trades below the ~ $3.10 level of the 100 day MA so more conservative investors might like to hold fire until we see more confirmation the company has bottomed out.
CMO makes a more compelling long term hold and I note business confidence started to show some sign of recovery in March and consumer confidence was stable.
CMO's 100th year anniversary this year...not many companies you can point a stick at that have been around that long....something definitely to be proud of !
On that lower forward PE with their history I think CMO makes a much better case for itself.
Great knowing we both retain our preference in this sector.
I like companies that have been around longer than I have as I figure they must be doing something right lol That said I think you might do okay out of TNR in the year ahead. Possibly worthy of a top nomination in the what dog might bark this year thread...
The code is TRA.
Often getting the right staff is the key. The new guy that came on board with high level experience at Armstrong's and BMW N.Z. possibly has more clues than the last one.
Maybe they shake off a few fleas this year after a shocker with the SP last year. I just don't like they way they really make a huge meal of talking up the growth in their announcements and very conveniently skip over the fact that EPS is flat and more than once or twice I might add. It seems more than a little disingenuous and deliberately so I would say. I guess once a second hand car dealer always a second hand car dealer even when it comes to the text of NZX announcements lol