Só 1,000 or more ‘extra’ sales for Turners as they get replaced
But if Turners market share grows could be 2000 more sales
Cool
Só 1,000 or more ‘extra’ sales for Turners as they get replaced
But if Turners market share grows could be 2000 more sales
Cool
The Napier branch will be busy for the remainder of the year. Not only for used vehicle sales but also the insurance write off auctions
http://research.iress.com.au/IDS/old...091850000&ppv=
Good to see that’s heading in the right direction
At least the media appear to be putting the word out to consumers on the issue:
https://www.stuff.co.nz/motoring/131...s-after-floods
FY23 Profit Guidance
Following consistent trading results over the summer months, including
ongoing strength in Auto Retail, Turners Automotive Group (NZX: TRA)
reiterates the guidance given at the HY23 results announcement. In November
we expected profits to be at or slightly above the FY22 record result. The
company is now on track for FY23 profit before tax to be at least $44.0m
(FY22: $43.1m).
Trading in Q423 has seen no significant change to the market dynamics we were
experiencing in Q3:
o Auto retail: Car sales in our business continue to hold up well, market
share continues to grow across new and existing sites, margins are stable.
Site expansion strategy working well and developing a pipeline of further
opportunities.
o Finance: The impact of a higher interest rate environment is increasing,
the expected deterioration in arrears occurred over December and January,
however the loan book is stable and arrears improved in February.
o Insurance: Claims continue to track below expectations and investment
returns improving.
o Credit: Debt load recovering, but more slowly than expected.
Our Damaged and End of Life Vehicle Division operational teams in Auckland
and the Hawke's Bay are busy supporting our insurance vendors to de-register
and sell these insurance write-offs for parts and recycling. Replacement
demand for damaged cars, combined with the supply restrictions caused by the
Clean Car Standard is expected to be inflationary for used vehicle pricing
and margins.
Looks good. Its a buy!
It is good news all around for the business and my only surprise is that the share price hasn't shot up more. I topped up yesterday, more good luck than management.
Was there any doubt? :p Looks very positive.
strong, positive announcement.
Bit surprising tbh with the housing market in the doldrums (https://www.interest.co.nz/property/...-any-time-soon) 430,000 NZers behind in their debt repayments (https://www.interest.co.nz/personal-...tting-pressure), and interest rates at their highest level for years. For how long, can Turners keep defying the macro-economic trends?
Bit surprising tbh with the housing market in the doldrums (https://www.interest.co.nz/property/...-any-time-soon) 430,000 NZers behind in their debt repayments (https://www.interest.co.nz/personal-...tting-pressure), and interest rates at their highest level for years. For how long, can Turners keep defying the macro-economic trends?[/QUOTE]
430,000 is close to 10% of the entire population, yet the article has "Consumer arrears rose to 11.9% of the active credit population". I suspect these numbers, they don't gel. Note the article chart shows the seasonal nature of debt and that at the same time in 2019, we had 12.2% in arrears, it is now only 11.9%.
Yes the property market is down, but not in the doldrums, the vast majority of owners bought before the bubble, so only interest rates impact them and rates are well below 2007 interest rates during a previous boom. My truckometer shows we are still spending flat out, so does the latest card data, so maybe we are not really in the doldrums as the RBNZ would like us to think. HH Income is growing at record rates, in some regions well above inflation, so maybe we just have the spending power.
Replacing a second hand car is not like buying a house, it is often done due to a necessity, eg the old car is bust. The rate of car deregistrations in increasing, suggesting that Turners is on a roll simply because too many people have held on to their dunger for too long.
Turners also benefited from rental company replacements a few months ago and will do from both the floods and the increase in debts - recall they have a business for credit control where they do the work for the Telco's. The linked article shows an increase in Telco debt, having that work return could be significant - recall the Telco's delayed credit controls during Covid.
Dividend of 23 cents expected this year. 5 cents received in the first quarter and 5 in the second. That leaves 6 cents upcoming in the third and 7 in the last quarter. And that is fully imputed. Yippie
https://www.nzx.com/announcements/409428
Turners Automotive Group (NZX/ASX: TRA) are pleased to announce that directors have declared a Q3 FY23 dividend of 6 cents per share (fully imputed) to be paid on 27 April 2023. The record date is 17 April 2023.
wonder how tra doing
One segment that is now really struggling is used imports. Although they sold 9681 vehicles in March, that was -60% lower than the record high level from March a year ago (which was boosted by a rush to beat new regulations). The annualised rate of sales for used imports has dropped to just 90,300, and this is its lowest since July 2013. It was at an annual rate of 137,000 in March 2022, but that is well lower than the all-time highest annual rate of 166,000 in 2017. It is a sector that has faded markedly over the past year.
https://www.interest.co.nz/business/...tric-car-sales
I think Turners are doing very well indeed. There is a clear trend in a decreasing number of second hand car dealers and Turners does not rely on importing vehicles. 90% of their vehicles are locally sourced. My thinking is that these two factors compensate for the recession we are in. So, no new record revenues or profits, but steady as last year for 2023 and 2024. These are my thoughts. And, I better not be wrong, as I have Turner shares galore
😃
Went ex-divvy Friday and up 5c this morning. Nice!
I managed to get a few more @ $3.33 late yesterday and today. When is enough enough?
There is no enough in the tension between greed and fear. There is only "too much" or "not enough". Only the future will provide an answer as which it was.
Personally I would consider the risk that the second hand car market and more so the car finance business might first get worse before it gets better :) - and if you look into the trend - they are in a well established downtrend (not that I am always following TA ... :) ;
NZX Virtual Investor event 10th May, including Todd Hunter.
https://nzx.us19.list-manage.com/tra...7&e=baeeaaa251
FY announcement 23rd of May....
https://www.nzx.com/announcements/410776
Investor presentation out today shows the ship is continuing to sail well. Matching last year's record profit, nice and reliable divvies, low pe, and a rising market share. Turners is not a cyclical business and largely recession proof. Close to 20% of my portfolio and a happy holder.
SAme, my top holding and happy with it as top in these times.
here is the link https://www.nzx.com/announcements/411163
Interesting on page 5 under the 'Overview of Turners Group' they note in a box that they are the 54th largest company on the NZX by free float... must be targeting top 50 at some stage aye. Its a question of when not if in my mind
Key Messages (from the preso):
1.Continue to produce robust and reliable earnings, despite macro challenges Following a number of strategic initiatives, and focus on de-risking, Turners continues to produce reliable and consistent earnings and a sustainable dividend yield. Auto and Insurance are growing strongly offsetting the impact of the interest rate environment on Finance.
2.Continue to grow market share in key auto retail segment With more branches in the pipeline, customers turning to “trusted” brands in times of uncertainty and a diversified sourcing model Turners is well positioned to widen its competitive moat in the used vehicle segment.
3.Used car market is mostly needs based…lots of market resilience in this segment 20% of NZ vehicle fleet is 20 years or older…this is over 830,000 cars that are at the end of their life.
4.We are very conscious of NZ and global economic challenges over the next 12-24 months We are aware of the challenges and still have clear plans to mitigate these. We still see opportunities in the markets we operate in, and are well positioned to take advantage of these. The strong will get stronger.
Said it before and I'll say it again - TRA is a blue chip business and a high quality stock.
From investopedia:
Actually - I realise many people in this thread love TRA, and I, while not in love with them, do respect their management. Their board is a different point of discussion, though.Quote:
What Is a Blue Chip?
A blue chip is a nationally or internationally recognized, well-established, and financially sound company that is publicly traded. Blue chips generally sell high-quality, widely accepted products and services.
Blue chip companies have reputable brands that have been built and maintained over many years. That and the fact that they have weathered multiple downturns in the economy make them stable companies to have in a portfolio.
Blue chip companies operate profitably despite adverse economic conditions, which helps to contribute to their long records of stable and reliable growth.
Anyway - "blue chip" appears a bit over the top, isn't it? - I guess after all - they are a used car dealer with their own finance company, and they nearly did bite the dust in the last big downturn (at that stage still called "Dorchester Pacific" and destroying hundreds of millions of shareholder value - though, yes, they survived by running a hotel. Flexible they clearly are ...).
But Blue Chip? - Is this like "World Famous in New Zealand"?
Yes I appreciate the irony of it being centred around used car sales and my view of it. Blue chip might be a smidge generous in that respect (IE not in the same externally viewed esteem as the likes of EBO, SKL, FPH etc) but I do believe its got a fit for purpose business model (integrated across dealership, finance, insurance, debt collection, with the best sourcing model in NZ, leading marketing, and property portfolio and site development programme) and a growing footprint allowing it to take share, management alignment with shareholders, focus on profitability and dividend distribution evidenced by being one of the few companies to make quarterly distributions, etc. So I retain my view that its a high quality stock and a high quality business, and am happily able to look through the 'used car veneer' into the underlying business and financial characteristics of the business.
But re your investopedia definition:
1) TRA have a dominant national position and brand within the used car segment
2) It has high customer satisfaction and sells widely accepted products and services
3) It does have a good and reputable brand that has been built and maintained over many years - has made great strides in developing the Turners Automotive brand over the last 5 years
4) It is operating very well despite adverse economic conditions (record year profits in FY23)
Seems like a tick against most of them?
Agree.
However I would put it differently in "fit for purpose" Yes they are, but it is more than that, each business supports the other businesses in their portfolio. ie it is an excellent example of running an "Ecosystem" of selling and supporting car ownership, including their new subscription business.
Note the release is clearly to allow Todd Hunter to comment more freely in his presentation/involvement in the NZX Virtual Investor event he is scheduled for in 10 minutes
Are you really sure about your ticks?
Last time I checked they had less than 10% of the market. They might be one of the bigger used car dealers - but dominant is something different.Quote:
1) TRA have a dominant national position and brand within the used car segment
Is this really true? Re customer satisfaction ... If you check their google reviews - they are at best a mixed bag. Not sure what widely accepted products and services means - yes, NZ is a country where its widely accepted to buy used cars (instead of new ones), but this has nothing to do with TRA.Quote:
2) It has high customer satisfaction and sells widely accepted products and services
Not quite sure, how you measure that. Do you just go based on the company presentations? I can't remember that they feature as top dealer in the consumer magazine and I can't remember any of my acquaintances recommending to buy there.Quote:
3) It does have a good and reputable brand that has been built and maintained over many years - has made great strides in developing the Turners Automotive brand over the last 5 years
If I am on the market - their cars never made it even on my shortlist, and the couple of times I went there just to see what people on this thread are raving about, I was disappointed and again - they never made it so far that I even wanted to test drive any of the cars I've seen there.
True - last year (or couple of years) have been good for them economically (as for many other car dealers - have a look at CMO) -- but this was the Covid boom. In my view a bit thin a criterium to call them a "blue chip" ...Quote:
4) It is operating very well despite adverse economic conditions (record year profits in FY23)
But anyway - no worries - I wish you luck.
I went to school with Todd a long time ago and played quite a bit of cricket with him. He was a year behind me but was mature for his age and was smart & always level headed. Not surprised he has done well for himself. Nice dividend returning stock and also not a bad P.E. either.
As the economy contracts and more money is sucked out to service mortgages, I wouldn't be surprised to see the 2nd hand car market do better than the new car market. Could be quite a good recessionary investment
BP ….suppose some see / hear only what they want to see / hear eh
Must be a scientific term for this (something better than rose tinted glasses)
BP never been a believer in TRA. Maybe one day
Rawz (#7722) has appreciated perhaps the most significant comment in the presentation - that TRA is presently the 54th largest company on the NZX by free float market cap.
When you look at the effect of being admitted to/removed from the NZX 50 Index (eg HLG/ERD recently) then the potential for an upward realignment of the share price in this instance is quite high given TRA's ongoing expansion and underpinned by a regular dividend regime.
I just hope nobody here is investing based on "believe". I am certainly not - in any stock.
I invest based on facts and based on working assumptions. Working assumptions can be wrong or right, but you don't have to believe in them. To believe belongs (if anywhere) into church.
And hey, I didn't even say that I think TRA will turn out to be a bad investment (though I am not invested in them at this point in time), but your statement sounded like a declaration of love. I just tried to inject a bit of reality into the discussion. Please accept my apologies ...
While falling in love undoubtedly can be fun ... it means that the opportunities every stock has look flasher for the person in love, but it means as well, that they oversee the risks every stock has as well. Just do a statistical analysis of love stories. Some end up well, but most unfortunately turn to custard.
Love just makes it more difficult to come to a balanced (no, not that balance!) assessment, resulting later on often in unexpected (while overseen) surprises ... and these are rarely of the good sort..
But in a nutshell - while I was never a "believer"- there have been times I used to hold both Dorchester and later TRA (probably under one of their previous tickers). And yes, they always looked shiny and people did fall in love with them ... and yes, this opportunity to hold them did cost me a lot of money - so maybe I just learned my lesson and am ahead of you?
But then, maybe I learned the wrong lesson, so - who knows?
I do love them for reasons said many moons ago, for a nice summary see FM post on the previous page.
No point looking too much in the past on this one. The business is just so different. So forget old lessons and certainly dont use a 10 year backward p/e ratio thingy. that will send you crook
Todd Hunter presented well [as always] on this morning's NZX Webinar.
Actually - the 10 year backwards PE is not even that bad (14.2) ;) - and I might be even able to disclose that they are at the moment on my list of potential buying opportunities. Having said that - I don't know, whether (and when / if) I am going to promote them ... there are just so many other good candidates around.
I do agree that things have changed a lot for TRA, but maybe this is as well a thing making me a bit nervous .. if things can turn within 10 (well, 15 years) from near catastrophe as finance company and just surviving hospitality business over long grinder over hope and actually a great looking plan which however never worked over depression to currently something which currently brings money, I am wondering how suitable it might be as a reliable long term investment?
You see, things don't always get better when they change, and at the end of the day its still just a currently ok-ish going used car dealer with a finance company and a somewhat funny insurance attached.
No doubt, there will be ups and downs.
I think you are doing yourself a disservice. Research is important:
1) Yes they have less than 1% of the market, only about 3000 cars for sale at any point in time, but a growing turnover rate. Quicker than anyone else in the market from my research
2)Customer satisfaction is measured pretty well by simply looking at Google Search history, they even publish their interpretation in their latest update (with a lot of license). From my research, Turners Cars searches 12 month MA is on a rise from about 80 to 140/month, Used cars is not a relevant search term with Trademe, but "2 Cheap Cars" ie NZAI is, falling from 240 to 150/month over the same period. I was surprised at this, but the name Turners is not as old as 2 Cheap Cars, showing the value of branding and change happens fast. A 6 month MA has both companies with the same 130 queries/month. Try the same search history for CMO, not enough data. BTW, Turners operate in the used Car market and this is a widely accepted product, even if I never buy used cars most people in NZ do.
3)Top Dealer? Well just to summarise; The dealer you selected, CMO currently have about 300 used cars for sale, they are of course primarily a new car business and Used cars is a side hustle for them. NZAI is a bigger listed car sales yard, this time a direct competitor with only used cars and operating under their own name, "2 Cheap Cars" unlike CMO - NZAI have 500-600 in stock usually, with bursts above 700, but currently at only 350, 10% of Turners.
4)You are a sample of 1 in your visit to the dealership. My guess is that you are not statistically minded to use your own limited experience as an indicator of the market. An interesting number for you, Turners sell 38,000 cars pa, they have a stock of about 3000 cars, so turnover is about 12.7 of monthly stock, ie they sell a bit more than their stock levels each month. I recall last year is was closer to 36,000pa, yet stock remains much the same.
5) The latest market update shows that Turners have performed well for at least the last 6 years - refer to the two charts on page 6, where it shows Turners growth in 3 year columns, both in profit and dividends. (note they say they pay dividends equal to 60% of profits)
That is very kind of you to say Daytr!
Interesting day on the share market today for Turners, as there are virtually no sellers. Result out next week. No surprises in profit and dividend. Is the market finally starting to re-rate this company?
Others may find this useful.
I like to invest in companies I can follow using independent data. So I create my own data from public sources. Turners are in my words "an ecosystem company" ie they have a product - providing private transport with associated services (car sales, finance to buy, insurance and subscription rentals). Ecosystem companies tend to have better than average returns over the long term - if their management is also premium performers. I think we are not well served with understanding the last point, while Todd is excellent, who is his number 2 if he meets a bus the wrong way? who else is driving strategies and performance and how good are they?
I successfully invest in Apple and Mainfreight for the same reasons, but have a better view of management.
Here is my data for your use, I update the chart regularly, just sharing it because I can:
https://www.datawrapper.de/_/GeaXh/
I’m not a Real Guru or a Legend …just plain ol Speedy Az
Turners slide from 2 years ago …Roadmap to $5
They are one year ahead of achieving NPBT of $45m in F24 …will do it this year and F24 will be close to $50m
Currently on a PE of just over 9 ……..so even at $5 in a years time it will be on a PE of about 11 ….hardly demanding when you look at the profit numbers on the chart. After all Turners themselves are doing what they said they would be doing …..and the market is about to wake up from its slumber and do it’s bit.
As Loulou thinks rerating coming ..it sure looks like it is.
Hope Todd updates his chart for next week ….might even hint at a Roadmap to $6
Good question.
As indicated - my confidence in the board is somewhat limited.
Todd though might have a succession plan (all really great leaders do :) - not sure, though whether it would be appropriate to ask him to share that here.
Might be a good question though, for the next AGM :)
I rest my case ...lol :cool:
PS : Hopefully u are out of HLG on inclusion pop or maybe u have become super long term holder for yield !!!
Thats also growth stock as per some Gurus !!!
BRM has Carsales.com in top 5 ...so why not here car selling company ...possible if they believe in management
I know you think I'm some dumb Beagle lacky that is lured by his posts into positions that I don't understand... rest assured I am a free thinker and can analyse a company's financial statements, their industry and look at the price movements to make my own decisions. Ill keep at it for awhile yet and if i cant beat the market ill probably just do what you do and invest in KLF and their top holdings MFT/FPH
I do hold a substantial amount of these, but a growth stock....... No.
They will grow slowly but it's going to take a while and interest rates will need to fall. I have spoken to few in the industry that agree that Todd and a couple of others is the reason this share has reached its heights.
Love a company but do not marry it is what I have been told on all investments. It is a stable company for now, but I would be cautious as to who is at the helm.
One of my goals for FY24 is to turn you into a TRA supporter Black Peter!
We have a very capable team of people here. Aaron Saunders (Group CFO) and I have worked together for 16 years...he started a couple of months after me at Turners Auctions in 2006. Aaron is exactly what you want in a CFO, asks the hard questions, can be pretty tough...but very very commercial. Greg Hedgepeth (ex BMW and Armstrong Motor Group) has done a super job of taking some initial momentum we created around the wholesale to retail transition from 2013-2017 and built from there. The growth he has achieved and the quality team he has built since running Auto is impressive. James Searle who runs our Insurance Division again a very experienced and super capable guy. Our business performance is very much a team effort, and I can assure you none of that is dependent on me. Mostly I am getting things out of the way or getting myself out of the way of a very talented and ambitious group of people who want to achieve and grow a business.
I think the board work very well with our management team as well. Despite a few comments on these threads they actually 1) really care about this business and 2) get involved "hands on" where they can add value. These are not a group of people who attend 11 meetings a year and an AGM, "hold management to account" and job done. A good example of this is "Tina" from Turners...John Roberts, Grant Baker and 3 of us from management were involved in a small project team who came up with the strategy and execution. No ad agency involved although we did use one of John's old ad mates Kim Thorpe to come up with the concept. A great example of how management and the board worked together on delivering a critical piece of work. We view the line between management and the board as a flexible line and directors are welcomed into the business to contribute where they can add value or they have an interest to understand. It works well from my perspective as a CEO and as a shareholder.
On the Roadmap to $5 slide...yes this may haunt me! We got a bit of flack about the title for the slide, but plenty of kudos from the analysts and insto investors for actually calling out a target and the building blocks for how we would achieve it. I am still pleased we gave the insight (and used the title) and happy to be judged on our performance against what we said we would do.
Great comments and refreshing engagement with the investment community....thanks so much Todd.
Kudos to you Todd and Team, well articulated. Been a dream stock for me over past few years.
As seen yesterday on FB......
Attachment 14597
Brilliant!! Lol
Strong trading today from bid side, might pop $4 by results day..
Still trading on a 9% gross yield at these levels. Will easy go to $4
Going gangbusters. The only star of my 2023 competition picks! More to come I think.
As per ASB Securities data ...TRA at current price has 17.24 p/e adjusted ...while MFT is on 15.91 p/e adjusted ...
I am wondering which is a better GARP stock ...maybe some Legend will enlighten me soon ...lol :p
From ASB securities quote details .
.https://www.nzx.com/instruments/TRA
NZX says 16.87
3 brokers cover TRA (CIP, Forbar, Jarden).
Average FY23 estimates (March YE): EPS 36.7, DPS 23
Average FY24 estimates: EPS 35.4, DPS 23
Average FY25 estimates: EPS 40.0, DPS 26.5
But MFT is already discounting that dip in its price and ratios ...at least to big extent ...where as TRA is going gung ho ...but U like it so its all good ...I dont as I will any day prefer MFT a large cap bluechip of 20 years record of growth over a small cap TRA ...personal choice based on long experience mate ...maybe one day u will appreciate that ...
lol pleasure.
as always lets see how the result comes out and understand the implications for the new current financial year, FY24, and how analyst forecasts change.
not implausible there could be a dip this year if FY23 included some cyclone induced over trading, together with macro headwinds. Wouldn't rule out rule out holding steady or slight growth this year either (company has good initiatives under way). I don't have a feel either way and look forward to reading the result to better inform my own perspective.
I likewise agree with the consensus that MFT's profit will fall in FY24 from FY23.
I hold good sized holdings in both for different reasons. TRA for it's strong quarterly yield with the possibility of modest capital appreciation over the next 5 years, and MFT for the possibility of much more modest yields but strong capital appreciation over the long term.
One can have it all and hold both lol
TRA current P/E of 10 is a safe bet imo. Solid dividend and clear growth ahead of it with the branch network expansion.
MFT is obviously a proven compounder and trading on good ratios as you say
Both are good investing right now. Both should be in ones portfolio.
I wouldn't bet against you being right.
None the less for my own personal objectives in the way I've structured my portfolio I want some equities with strong, regular dividends, and some long term growth stocks. If I was younger I'd probably have a greater concentration of growth stocks. But from where I sit here today, the mix I've got is right for me (or so I tell myself anyway lol).
and I continue to think TRA has good capital appreciation potential over the next 5 years but I don't necessarily expect the journey to be a linear one.
I am comfortable with your plan ...for regular income I prefer KFL quarterly distributions ...tax efficient and great portfolio at a discount ...as me already retired so it keeps pressure low to keep hunting for yield ...small caps tend to fade very quickly ...need keep track ...which I dont want to ...so KFL helps ...but as u are more hands on and very well informed participant ...it works well for u .
just you wait alokdhir - forbar are saying TRA has a shot of getting into the NZX50...just wait for all the ramping to start and the index pop to happen (lol) - boy are you going to get FOMO (for a few weeks lol)
I didnt participate in the pop and bust of HLG ...neither I want to take TRA ride ..its too scary for a oldie ...lol
But I know and have seen wonders of low cap illiquid stocks ...Good luck with your ride UP ...hopefully u will get out near the TOP ..lol :p
KFL is a fund of 13 stocks ...so its diversified enough ...Top up is pure growth long term stuff like MFT / FPH / IFT /EBO/ SUM etc ....currently overweight MFT and out of FPH ...so it's not that concerning ...also all these are large cap bluechips ....they doing WHS ...chances are less ...still can do ATM ...but I never liked ATM as it was one country wonder ...also a country which can change overnight ...need see diversified streams of revenue and profit centres
I would say some will start positioning for this stock to be included in the NZX 50 later this year or early next. It is inevitable if TRA is assessed as the most likely candidate this will drive the price higher this year which in turn fast tracks the possibility of inclusion.
And I believe the next results announcement is on Tuesday - so do you dare wait and see, or buy now?
Always amazes me that analysts, while not able to (correctly) predict the share price in a year, not able to forecast whether interest rates will go up or down over the next year, whether we will have a recession and how severe it will be, having no clue what the petrol price will be in 6 months, a year or two or three, and not knowing about the future of traffic, still seem to be able to work out an earnings forecast three years ahead down to the first decimal of a cent:);
Amazing, indeed ;)
Indeed. But that is quite literally their job.
As always consensus (whether you grab that via marketscreener which often doesn't include all the brokers or you obtain yourself from the relevant latest reports) should be taken with a grain or two of salt.
But it's a useful place to start and get the broad strokes of the financial metrics (both historic and prospective).
I often read the reports with interest - not so much with a focus on the TP's or financial forecasts - but on the underlying operational drivers and trends that make the business work. Can learn a lot about what makes a business tick from the reports that might not otherwise occur to you.
And there is a decent amount free floating around.
For instance, on TRA, you can read a 37 page initiation of coverage report of TRA (dated 8 February 2023) authored by Forbar, and a report updated for its recent trading update dated 8 March 2023, by visiting MST Access.
Some interesting stuff in there...how used car volumes faired through the GFC, trends in TRA's sales and marketshare, overviews of its volume channels and margins per vehicle, interest rate cover and NIM considerations, insurance net loss ratios, etc.
Some analysts are better on certain companies than others and worth following whereas some are not. I've seen many reports that weren't worth the paper they were written on. But there are some great analysts out there who are extremely proactive in doing their research, have integrity, and write balanced and thoughtful research.
The ASX has a lot of research made available and it's worth getting on their broker research mailing list.
In the end you have to make your own financial decision but they are a great starting place in efficiently gaining knowledge.
As per my recent study of TRA vs MFT investment option ....TRA 9 years average PER is 10.2 so valuations based on 35 Cents FY 24 eps = NZD 3.57 ...fully priced at current SP with some exuberance over NZX50 inclusion event possibility
MFT 13 years average PER is 21.2 and expected FY24 eps is 3.72 thus SP valuations = $ 78.86 ...still some place left to grow !!
This simple analysis based on market screener data is self explanatory ...TRA is currently trading over its historic valuations while MFT is trading below same parameters . Hype can take it anywhere but can hype sustain it there is another question .
Quite different companies and investment propositions - apples and oranges, no? Be like comparing FPH with Meridian
Your point still well made.
TRA having a nice rally & sitting on a nine month high. Bit of NZX50 hype, bit of a good NZX Virtual presentation last week, but also the full year result next week & people buying in advance of the dividend (never ceases to amaze me how people eagerly line up to pay for their dividend). I also know of two people who had their cars written off in the rain a fortnight or so ago so wonder if there is a bit of that in the background. How enduring these will be I don't know, and as I'm neither a buyer or a seller, not fussed either way.
I would like my MFT holding to be larger & last time I purchased was in july 2020 and it's been a long time between drinks for such a high class company. I have my eye out for forecast EPS downgrades as some data I've seen together with my gut tells me they might be coming.
Low multiples for a company (relative to its LT history) may signal value but they may also signal the market has doubts about the maintainability of current year earnings and the achievability of forecast earnings, particularly for cyclical companies like retailers, banks (yes, incl. HGH), logistics companies. So something that looked like (say) a 10 PE on forecast earnings, may well have wound up implying something much more when the actual earnings are released.
Will continue to sit on the sidelines for a while. Not buying anything until after the debt limit issue is known in America and likewise sold a few shares (aussie ones). The macro pictures & recent movements in interest rates are giving me some pause for thought - a lot recent froth in the market that I'm not sure reflects the outlook so happy to sit on a tad bit more cash.
Apples and Oranges got levelled by much different historic PERs ...after all for an investor it doesn't matter from where the moolah comes from ...10.2 vs 21.2 has built in difference of pedigree and market behaviour and track records and what not ...Russel2000 always trades at much lower PERs then maybe Dow or S&P etc
Main point being whether one shud try to join the hype or not ...me is saying better to avoid the hype exuberance ...one is better off buying MFT at current SP then TRA ...but thats me always trying to miss some action then getting caught on the wrong foot ...one in hand is better then two ....lol
They've different capital profiles...Turners on one hand have a large finance book with huge assets employed where debt is raw consumable & an operating rather than a capital item. Freight forwarding on the other hand is a relatively capital light business - capex for new sites and DCs, but not nearly as capital intensive as turners who in addition to the book have to buy the cars as stock (MFT just forward other people's stock). Hence MFT has higher ROA's and ROE's than TRA and all things equal ought to command a higher PE.
Low PE doesn't necessarily mean good and a high PE doesn't necessarily mean bad, particularly when you compare businesses in different industries with different business mechanics, but they become more interesting to compare & understand why they differ for businesses in the same sector.
Anyway always enjoy our back and forths. and you can be assured that if TRA get closer to included in the NZX50, the hyping won't be coming from me....
Many HMVs here but doesn't matter as long as participants know what they getting into ...I do try my bit to place other side of the story too ...rest is up to people to decide and do their own research
Good luck with your TRA holdings and hopefully u will get another chance at your price to get more of MFT ...me is not looking to add anymore ...already my MFT holding is causing concern to dear friend Rawz ...so I must not add more even if goes below $ 65 ...but I will be hoping it doesn't ...lol
Whats a HMV?
All set for drum roll tmrw...hopefully they can smash the numbers out of park, no pressure Todd :p
There will be no surprises. The expected eps will be 37 cents and the final divvie of 7 cents.
One of the things I'm interested in is the market share, I think this will have continued to increase and to be close to 10%.
Also, are they planning to establish more local outlets?
Hope there is another SP roadmap in the presso somewhere. I like it.. lol. even if the analysts poo poo it