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Phaedrus
21-09-2007, 09:27 PM
The technical approach.

This chart shows 6 separate indicators. All parameters were selected such that no sell signal was generated by the low of March 2004. You can see that all 6 indicators triggered Sell signals over a short period of time in September 2004, not long after TUA had peaked.

In the following 3 years, there have been no buy signals triggered.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/TUA22907ta.gif

Phaedrus
21-09-2007, 09:30 PM
This is an excellent example of the lack of correlation that can exist between company announcements and stock performance.

It shows the boundless optimism that some people can sustain in the face of unpleasant reality.

View it as an object lesson in the folly of buying into a downtrending stock and the inadvisability of "averaging down".

http://i602.photobucket.com/albums/tt102/PhaedrusPB/TUA22907fa.gif

winner69
22-09-2007, 06:49 AM
But Phaedrus .... you forget about those dividends

The lucky person who you noted as buying more and then more around $1.20 not that long ago scored a 8 cent special dividend (company can't be doing too bad if it had to give surplus cash back to shareholders ..... maybe thought it safer with them than letting trusted employees looking after it .... ha ha ha). So thats a pretty decent return on those shares eh.

Couldn't help smile with the statement emblazoned across the Turners website ....

..... NEVER PAY TOO MUCH!

brother coy
22-09-2007, 08:49 AM
hahahha pharus is remenberts once ya riduculed mes for mys stocks tradings reports on telscom says i optimised its tos geta da best resultss hahahahhaa buts looka at ya graphs ya optimised da indicators to getta da best fit haaaaa ha ya sees sucker tella us da truth haaaaaaaahaaa there no magic a sucker

duncan macgregor
22-09-2007, 01:32 PM
BRO, YOUS IS ONE COMPLICATED JOKER UNDERESTIMATED BY THE MASSES. Old PHAEDRUS can only do a chart after it has happened. After its happened he would hardly stick the lines in the wrong place now would he?. You on the otherhand BRO are a bit like me, not only with your spellin, but you come out with what is going to happen next week, which makes us much more intelligent than someone muckin about with chicken entrails.
SNOOPY is the one he quoted in the red ink, he like his name sake, not only goes down in flames, but pours petrol on the fire on the way down to put it out. PHAEDRUS gets on the bus at 25 to the hour and jumps off at five past. Your system is a bit like mine BRO the more you explain it the less they comprehend. Nice to see you back. MACDUNK

winner69
26-12-2007, 07:52 PM
All Ears on the other channel is still predicting the demise of TUA .... sooner than later by what he says

duncan macgregor
29-12-2007, 10:27 AM
All Ears on the other channel is still predicting the demise of TUA .... sooner than later by what he says
His latest post is well worth a read before it gets removed which has to happen. I would think it will be removed before it all hits the fan. Macdunk

STRAT
29-12-2007, 11:10 AM
I suspect All ears has a personal axe to grind. Perhaps as his name suggests he once worked for Turners :eek:

STRAT
29-12-2007, 11:13 AM
hahahha pharus is remenberts once ya riduculed mes for mys stocks tradings reports on telscom says i optimised its tos geta da best resultss hahahahhaa buts looka at ya graphs ya optimised da indicators to getta da best fit haaaaa ha ya sees sucker tella us da truth haaaaaaaahaaa there no magic a suckerMaybe but that long strait red line pointing down says it all dont ya recon?:D

winner69
29-12-2007, 08:07 PM
I suspect All ears has a personal axe to grind. Perhaps as his name suggests he once worked for Turners :eek:

Well he answered your question on Sharechat

And I wonder if that rort of TUA overcharging $100 odd on the registration of new imports will actually become mainstream news ....... $20M of refunds would hurt them eh

Like reading All Ears .... good stuff

http://forum.sharechat.co.nz/showthread.php?t=365&page=7

Radar
30-12-2007, 10:11 AM
I suspect All ears has a personal axe to grind. Perhaps as his name suggests he once worked for Turners :eek:

Reads like a soon to be redundant long time staff member, with a staff shares.

People take the loss of comfort zones too personally and if the directors aren't doing well according to his opinion, then he needs to go out and do it better himself.

Maybe the directors haven't slept for a year, and maybe they've kept him in a job way longer than what he would have had doing it himself.

Plebs only think they know whats going on, and anything not making their lives easier, can't possibly be right.

His comments might have been compelling if he had chosen his words more carefully, rather than making it blindingly obvious that he's a disgruntled employee.

duncan macgregor
30-12-2007, 10:30 AM
Reads like a soon to be redundant long time staff member, with a staff shares.

People take the loss of comfort zones too personally and if the directors aren't doing well according to his opinion, then he needs to go out and do it better himself.

Maybe the directors haven't slept for a year, and maybe they've kept him in a job way longer than what he would have had doing it himself.

Plebs only think they know whats going on, and anything not making their lives easier, can't possibly be right.

His comments might have been compelling if he had chosen his words more carefully, rather than making it blindingly obvious that he's a disgruntled employee. Dont shoot the messenger be gratefull for the message. Right or wrong its up to you to decide. i bet a few shareholders in Feltex wish that a disgruntled employee had given them the inside story before it all hit the fan. A message to all disgruntled employees in any industry spill the beans Macdunk is ALL EARS. Macdunk

Deev8
30-12-2007, 10:51 AM
Dont shoot the messenger be gratefull for the message. Right or wrong its up to you to decide. i bet a few shareholders in Feltex wish that a disgruntled employee had given them the inside story before it all hit the fan. A message to all disgruntled employees in any industry spill the beans Macdunk is ALL EARS. MacdunkMost companies of any size have disgruntled employees who are very happy to tell anyone who cares to listen that the senior management don't know what they are doing and the company is going down the tubes.

Sometimes the stories are accurate, more often they are misguided - inadvertant misinterpretation of the facts by someone who doesn't have access to the whole picture. Occasionally they are pure fiction, invented with the sole purpose of harming the company that the disgruntled employee hates.

It's difficult, if not impossible, for the independant observer to know which category any disgruntled employee story belongs to. So I take any such story with a large pinch of salt.

This isn't intended to be a direct comment on Turners Auctions - but it is the reason why I wouldn't give much weight to insider stories from that company or any other.

ratkin
30-12-2007, 11:00 AM
Its clear he is biased , however as a long time attender of the auctions in christchurch i can see he makes very good points.

When i first arrived in this country in 1992 i went along to turners auctions in the old building they had on moorhouse ave. It was always packed with a lively atmosphere , busy cafe upstairs and lots of cars , many from private buyers. Lots of variety. I found it so interesting that i would often go along just for the entertainment value , try out the more unusual cars and have a bite to eat.

Was always iffy in terms of quality, first car i bought blew up after two weeks , had been put in by someone who obviously knew it was stuffed , but it my own fault for not checking it properly.

Now fast forward fifteen years. I went to look for a car last year at the new building, very flash it is too, just behind the new tower junction mall. Must be prime location now.
Anyway i found nearly all cars were unregistered imports , boring run of the mill stuff . Very few new zealand new cars or cars put in by private sellers (all on trade me?).

I ended up buying a mitsubishi mirage , boring i know I won the auction for 4400. However by the time all the charges etc had been added on it was up over 5000.
There was hardly anybody at the auction , most of the cars didnt even reach reserve and were passed over for next week.

The lack of atmosphere is a real problem for them i would think. In the old days people would get involved in bidding wars with cars often going a fair bit higher than reserve, you just dont see that now.

They have built a better testing track , and have a much nicer (more expensive ) building but i would imagine they are making far less money.

When you look at the real cost of their cars now they are really no cheaper than buying from a car yard and the risk of buying a dud is probably much higher.

I must say though that my mirage has been very good and has given no problems at all

Radar
30-12-2007, 12:56 PM
Dont shoot the messenger be gratefull for the message. Right or wrong its up to you to decide. i bet a few shareholders in Feltex wish that a disgruntled employee had given them the inside story before it all hit the fan.

This is a valid point, same with BridgeCorp and a bunch of others... to be a fly on the wall. And interestingly, like turners, they all failed to act, or did so inadequately, when the core of their market turned inside out.

So perhaps there is merit in some of the points made, nevertheless, if he's indeed an employee that cares about the company and its success, then there are more constructive ways of bringing about change, and certainly more tactful ways of informing others about problems. The delivery sounds like sour grapes, packed full of emotion, so the integrity and motives are at the very least, questionable.

But it would to me, seem overstating of the obvious, that the market has changed to the detriment of the business. There is no way to escape the impact technology will continue to have, and there is likely to be no amount of money to afford a turnaround.

Yahoo didn't see google coming, and turners didn't see the internet coming, if anything, its a sign to others that a site like trademe, with hundreds of thousands of visitors each day, is capable of affecting change in any number of markets.

To be honest, I doubt there was anyway for turners to have seen this coming, and its now way too late to turn the clock back. That's no fault of the director's, no one could have crystal-balled the impact trademe would have on a number of markets, including trademe itself.

Disgruntled employee's need to accept the director's are likely as much the victims of change as they, the horse has bolted, its time to find a different career and cut your losses while you still can, not throw mud around the playpen where there's nothing for it to stick to.

winner69
30-12-2007, 01:24 PM
I think there is more to All Ears comments then you give him credit for .. says he was an employee once but one thing for certain he is an industry insider ..... maybe even a competitor?

Like MacDunk says we should appreciate people like All Ears conig out and saying these things .... he could actually be correct

Anyway he must be a decent bloke ..... he owns some NZO shares (no small change either he says)

ratkin
30-12-2007, 01:43 PM
Didnt he say he was Turners biggest customer?

My guess is he worked for turners and then branched out on his own , with his own car yard, using turners to supply his new venture.
Turners then increased their costs to the buyers which would of in turn hurt is new buisness

Radar
31-12-2007, 10:35 AM
Didnt he say he was Turners biggest customer?

My guess is he worked for turners and then branched out on his own , with his own car yard, using turners to supply his new venture.
Turners then increased their costs to the buyers which would of in turn hurt is new buisness

He seems to have a great deal of endearment and empathy with staff at Turners in the here/now, and talks almost like he's sitting in more than one persons chair.

Perhaps he's a former employee, now a customer, with a relative still working at Turners.

STRAT
31-12-2007, 11:54 AM
I think there is more to All Ears comments then you give him credit for .. says he was an employee once but one thing for certain he is an industry insider ..... maybe even a competitor?

Like MacDunk says we should appreciate people like All Ears conig out and saying these things .... he could actually be correct

Anyway he must be a decent bloke ..... he owns some NZO shares (no small change either he says)Never meant to imply any disrepute. I agree with All Ears and his perspective on the company and merely posted my observations at the time. Out of Courtesy to All Ears here is his reply.

http://forum.sharechat.co.nz/showthread.php?p=15888#post15888

winner69
14-11-2008, 11:34 AM
Used car market collapsed and TUA will make $1m this year ........ and everybody in the industry is suffering ... sympathy for used car dealers anyone

TUA is really a microcap now .... market cap pre announcement $17m ... so still pretty richly valued.

Maybe All Ears did have something about the ability of TUA to survive hard times

CAM
14-11-2008, 12:22 PM
Might do OK as they are the seller of last resort...you need cash in a hurry...they are the place to sell your vehicle...market dictates the price and I imagine their commission structure wouldn't be too hard hit by a decrease in the value of vehicles.

winner69
31-12-2008, 09:08 AM
When the likes of Snoopy and All Ears go head to head with their different views of TUA (more so on Sharechat than here) one feels they need to keep a casual eye on the shareprice to see what happens

One would have to say that what All Ears has been saying for years has panned out with TUA still hitting all time lows ... currently 42 cents (and a market cap of $11m hardly warrants listing)

Snoopy
01-01-2009, 09:13 AM
When the likes of Snoopy and All Ears go head to head with their different views of TUA (more so on Sharechat than here) one feels they need to keep a casual eye on the shareprice to see what happens

One would have to say that what All Ears has been saying for years has panned out with TUA still hitting all time lows ... currently 42 cents (and a market cap of $11m hardly warrants listing)

I have been watching Winner, as I said one day I would be back purchasing more TUA - but not just yet. If you look at the volume of TUA shares being traded you will see it is very low. At one stage I looked and saw a total absence of buyers, until someone jumped in at 40c. I don't think anything in particular has happened in the last month to change the TUA situation.

Perhaps some shareholder who could no longer afford a Christmas hangover and in a moment of soberiety took time to review his portfolio and suddenly wanted out at any cost? It was certainly a horror finish to FY2008 for any company selling stuff, with even respected operators like Hallenstein Glasson and Michael Hill finishing at or near their year's lows. My own investment in TUA is part of a broader 'retail strategy' which was to see me boost my investment in retail in CY2008.

With the one in eight year downturn turning into a one in eighty year downturn (if you believe some commentators) this required me to readjust my strategy away from those retailing big ticket and discretionary items and look towards those retailers handling the basics. That meant the money I had earmarked to increase my shareholding in TUA, instead - after looking at other options (MHI, WHS and HLG)- instead went into boosting my holding in Restaurant Brands, up by around 50% over the last twelve months (average RBD purchase price 71c over that period). In relative terms, this has proved a good decision.

The second hand vehicle market has experienced a dislocation like nothing like I can remember. Perhaps the only thing that comes close is the arrival of Japanese imports in the early 1980s. Still the depreciation of the kiwi dollar against the japanese yen in particular has been savage during CY2008. The full effect of this has not yet flowed through to new vehicle prices. Will kiwis be able to afford the consequent 40% price hikes in these tough times? One of the few ways to cushion this blow will be to switch to near new vehicles and in this respect I don't see the used vehicle market declining further. Nevertheless I want to see some evidence that Turners will be able to capitalise on the reemergence of the used vehicle market before committing further funds. In the meantime I am sticking with my projection of Restaurant Brands being worth 80c by the end of this summer (it has tentatively pushed out of the 60c range up to 65c already) and continuing to look for a 'third arm' for my retail reinvestment strategy. I don't see myself committing any more funds to TUA until after the April 2009 AGM, no matter what Mr Market does to the share price. If that means I have to pay more than 50c per TUA share, then so be it.

SNOOPY

discl: hold RBD, TUA

duncan macgregor
01-01-2009, 09:33 AM
BRO, YOUS IS ONE COMPLICATED JOKER UNDERESTIMATED BY THE MASSES. Old PHAEDRUS can only do a chart after it has happened. After its happened he would hardly stick the lines in the wrong place now would he?. You on the otherhand BRO are a bit like me, not only with your spellin, but you come out with what is going to happen next week, which makes us much more intelligent than someone muckin about with chicken entrails.
SNOOPY is the one he quoted in the red ink, he like his name sake, not only goes down in flames, but pours petrol on the fire on the way down to put it out. PHAEDRUS gets on the bus at 25 to the hour and jumps off at five past. Your system is a bit like mine BRO the more you explain it the less they comprehend. Nice to see you back. MACDUNK I wonder what happened to the BRO, He is one poster that i looked forward to reading his posts. WHERE ARE YOU BRO WEEZ IS MISSUN YOU.? Happy new year all Macdunk

BRICKS
25-01-2009, 09:03 AM
BRICKS has just returned from his Hamilton & Auckland gambling trip but while at these
towns looked at the TUA operations in size much larger than the the Wellington concern
full of cars and customers.

IT should be noted TUA does not own the cars only rake off the commission so to me
the car price dose not matter which we all know is down but there is still a market
other wise the doors would close.

To me cheep entry into any stock is good and don't follow the mob don't write TUA
off just YET..

POSSUM THE CAT
25-01-2009, 11:33 AM
Bricks unless things have changed recently Turners did own a lot of the better import cars and were Auctioning them with Turners Warranties and they were the importers. Daughter bought one of them and there were others marketed at fixed prices. Also I was highest bidder on another car prior to daughters purchase and was told as it was one of Turners own cars unless I was going to increase the bid very substantially forget about it.

BRICKS
25-01-2009, 11:48 AM
Bricks unless things have changed recently Turners did own a lot of the better import cars and were Auctioning them with Turners Warranties and they were the importers. Daughter bought one of them and there were others marketed at fixed prices. Also I was highest bidder on another car prior to daughters purchase and was told as it was one of Turners own cars unless I was going to increase the bid very substantially forget about it.

I think those days may be over but some wrecks came through and where sold cheep
all that can be said they got there commission and off they went it may be different
but nothing was SAID..

POSSUM THE CAT
26-01-2009, 09:59 AM
BRICKS In Auckland there are as many as 10 Auctions a week if you include North Shore and every auction is usually for a certain class or price range of cars. It sounds like you were there on EL CHEAPO Day Some Saturdays you do not go unless you have more than $30000.00 to spend

BRICKS
26-01-2009, 11:50 AM
BRICKS In Auckland there are as many as 10 Auctions a week if you include North Shore and every auction is usually for a certain class or price range of cars. It sounds like you were there on EL CHEAPO Day Some Saturdays you do not go unless you have more than $30000.00 to spend

YOU could say that in Hamilton they more than one to you cant help bad luck well pussy cant see your point as WELL..

BRICKS
02-02-2009, 06:41 AM
THE best suggestion yet take there cars and crush them then let the little boys go
round to TURNERS AUCTIONS and they can BUY a new one, then return to racing
and repeat the process all over AGAIN..

BRICKS
07-02-2009, 11:25 AM
THE best suggestion yet take there cars and crush them then let the little boys go
round to TURNERS AUCTIONS and they can BUY a new one, then return to racing
and repeat the process all over AGAIN..

THE GOV has no guts to solve the problem ,, Just CRUSH THEM..

ratkin
23-02-2009, 09:59 AM
Interesting result , maybe not quite the dead duck they have been portrayed as.
With money tight consumers may once again start to buy at auction

Deev8
24-02-2009, 09:56 AM
Interesting result , maybe not quite the dead duck they have been portrayed as.Having no debt will certainly help them at the moment, and it's clear that the credit crunch is killing a lot of car dealers.

Turners Auctions chief executive Graham Roberts said:
"I think that this is a time of opportunity for us and I'm confident that we'll grow our market share this year by offering these new services but also with the number of players pulling out of the market there's an opportunity for us to get in there and exploit our position."

BRICKS
24-02-2009, 02:05 PM
But just like all good medium stocks TUA is fully PRICED..

BRICKS
24-02-2009, 07:43 PM
And contributing to GPG's bottom line/cash mountain, Bricks .... ;)


And tell me where the mountain of cash IS..

croesus
03-03-2009, 05:29 PM
Been buying these today..... TUA should do well in bad times, and I like the short term yield....

Silverlight
19-02-2010, 10:47 AM
FY to 31/12/09 $3.3M up 207% FY DIV 12.0 cps

Turners Auctions today announced its 2009 net profit after tax of $3.3 million, up 207 percent on the same period last year. Despite the continued decline in the used vehicle markets over the year Turners Auctions has grown market share and focused closely on costs to ensure a strong result for shareholders. There has been strong profit growth in all the core areas of the business which is very pleasing given the economic situation the business has operated in throughout 2009.

The New Zealand used vehicle market has declined a further 5% in 2009 off the back of a 9% decline in 2008. However auction revenues have held up well at $36.6 million up slightly over $36.5 million in 2008. There has been continued growth in sales of repossessed vehicles, government fleet vehicles, lease and rental company vehicles.

Operating profits from Turners Fleet have improved significantly by comparison with 2008 as a result of more prudent buying in Japan and tighter control of inventory. Turners Finance profits have increased due to higher interest margins, a growing loan book and improved sales of add-on insurance products such as mechanical warranties.

As indicated at the half year changes in strategy have delivered significant savings in business costs with total expenses for the year down 13.8% to $65.8 million. Turners Fleet cost of sales are down 25% to $24.7 million and the change to an online advertising strategy has reduced advertising costs by 51% to $1.4 million and delivered an extra 9.4% registered bidders over 2008 levels. We have continued to invest in online initiatives throughout the year and this has delivered an increase of 31% in web traffic in 2009 and contributed to an increase in online purchasing.

The strong full year result and Turners’ positive cash position have led the Directors to declare a final dividend of 7.0 cents per share fully imputed at 33%, payable on March 30, 2010. This brings total dividend payments for 2009 to 12.0 cents per share.

Results summary:
- Operating Revenues $70.4 million, down 9.5%
- Group Net Profit after tax $3.3 million, up 207%
- Total Group Assets $44.2 million, up 6%
- Final Dividend payment 7.0 cps payable 30th March 2010

macduffy
19-02-2010, 12:22 PM
And a nice bounce in the SP - up 20c (16%) to $1.45.

Good recovery from the low point of around 45c at the beginning of 2009!

Disc: I hold a few.

percy
19-02-2010, 04:57 PM
What a cracka,unfortunately only have a small holding.

COLIN
19-02-2010, 10:18 PM
And a nice bounce in the SP - up 20c (16%) to $1.45.

Good recovery from the low point of around 45c at the beginning of 2009!

Disc: I hold a few.

I managed to grab a few at the opening, at 135. Have been watching them for some time, and should have bought earlier of course. They seem to have made a pretty good job of getting their house in order again, after the market slump and the fraud case. Trouble is, the liquidity is poor, and with this type of small company it is hard to offload any decent-sized parcel of shares in a hurry if the trend starts to deteriorate.

Snoopy
20-02-2010, 08:26 PM
I managed to grab a few at the opening, at 135. Have been watching them for some time, and should have bought earlier of course. They seem to have made a pretty good job of getting their house in order again, after the market slump and the fraud case. Trouble is, the liquidity is poor, and with this type of small company it is hard to offload any decent-sized parcel of shares in a hurry if the trend starts to deteriorate.


Colin, it appears that despite our quite different investing styles we have ended up with shares in the same company bought at the same price! Well, OK my average price is $1.37, a couple of cents above what you paid. Then again I'll wager I have rather more shares than you. Since in contrast to your scramble at the opening bell, I have been accumulating TUA for three and one half years!

It is always easy to say with hindsight that one 'should have bought earlier'. But should *you* have bought earlier, really? The car market is still very depressed. And with unemployment still rising, it is hard to see that reversing soon. TUA have made noises about gaining market share since the latest decline started. But how were you to know that would make enough of a difference after two or more years of TUA decline, which saw profits almost evaporate? OK, TUA did issue a profit upgrade on 22nd October last year at which point the share price jumped to around $1.20. But there was no indication that the coming FY2010 might be better than FY2009 until Friday's full year FY2009 profit announcement.

Now the contest is on to see who will get out with the bigger profit. Since I have no plans to 'get out', I guess it will be you. However, I think I will claim victory if the share price moves higher after you depart the share register. You have correctly identified the problems trading a share such as this:

"Trouble is, the liquidity is poor, and with this type of small company it is hard to offload any decent-sized parcel of shares in a hurry if the trend starts to deteriorate."

The solution to this conundrum is however, relatively simple. The old adage "Buy into weakness, Sell into strength." applies here.

SNOOPY

winner69
21-02-2010, 06:04 AM
Wonder what all ears on the other channel is thinking now

Phaedrus
23-02-2010, 11:56 AM
The old adage "Buy into weakness, Sell into strength" applies here.Just how good is that old adage? You and others were "buying into weakness" all the way down as per the charts that began this thread. By contrast, the green arrows mark buying into strength. Which worked out better?
Why would you want to "sell into strength"? No-one knows how far any uptrend will run. Look, though, at where red arrows mark selling into weakness. A nicely timed exit, yes?

http://i602.photobucket.com/albums/tt102/PhaedrusPB/TUA22310.gif


"Trouble is, the liquidity is poor, and with this type of small company it is hard to offload any decent-sized parcel of shares in a hurry if the trend starts to deteriorate.".Certainly TUA is a relatively lightly traded stock but you overestimate its trading difficulty. For example, after triggering Sell signals, the shareprice moved little for about 4 months, allowing plenty of time to exit. You can't expect to unwind a substantial position in a small company in a single day.
Similarly, when buy signals began triggering, the shareprice moved little for 4 months allowing a leisurely entry.


I have been accumulating TUA for three and one half years!Yes, and the result is an average price paid of $1.37 and a position that has been underwater for the greater part of those three and a half years. You would have been far better off not accumulating during the long downtrend, but buying anytime at all once the uptrend began. You and others were focusing on the low PE and the "13%" dividend yield - while your capital was being eroded at well over 40% pa!


It is always easy to say with hindsight that one 'should have bought earlier'. But should *you* (Colin) have bought earlier, really? .Yes, as a TA, of course he should have! He should have been buying at around 75 cents, when all the indicators were firing off BUY signals for the first time in over 4 years. The exact same indicators that gave such good exit signals years in the past.


There was no indication that the coming FY2010 might be better than FY2009 until Friday's full year FY2009 profit announcement.TUA was in a steady uptrend, so the market was clearly optimistic.

Go back to the first 2 posts on this thread and see just how well 6 simple indicators have performed with this stock - using parameters that were set in 2004 and have remained unchanged ever since. Every so often, someone claims that TA leads inevitably to "overtrading" and is unsuitable for longterm investing. This chart gives the lie to that. 2 trades in 8 years will NOT turn you into a wild-eyed crazy trader!

See how the the market "knew best" with seemingly good results failing to influence the ongoing downtrend. Only staunch fundamentalists and those impressed by low PEs were buying into the slide. Buying downtrending stocks is not a good idea - regardless of the dividend yield!

It's nice to see signals derived from such very different indicators correlating so well.

percy
23-02-2010, 04:23 PM
Phaedrus, thank you for tua chart.I brought on 17/3/08 at $1.02 for yeild ,low PE and strong brand.As you pointed out buying in a drowntrend is poor investing.TA is a very helpful tool in investing,and rather than thinking some share is good value TA can tell you what the trend is.The real point is should I have used TA I would havebrought twice the numder of shares for the same amount of money.Lesson learnt.

Phaedrus
24-02-2010, 06:37 PM
If I had used TA I would have bought twice the number of shares for the same amount of money.It's not quite that good, Percy. If you bought at the Close on the day all indicators triggered Buy signals, your entry would have been at 75 cents. Say you invested $10,000. At your $1.02 entry, you would have 9800 shares. Waiting for TA buy signals gave an entry at 75 cents and a holding of 13,300 shares for the same amount of money. That is 3,530 shares more, for the same outlay.

I see that you bought because of the high yield and low PE. You were certainly not alone in this. (See this (http://www.sharetrader.co.nz/showthread.php?5293-TUA-Turners-Auctions.-A-Case-Study.&p=165927#post165927) chart.)

One of the problems with FA is that these parameters just keep on getting better and better as the downtrend continues. That is one of the reasons for the continual averaging down seen with this stock. The market was unimpressed by the comforting company results and they did absolutely nothing to arrest the ongoing slide.

13% sounds such a good dividend yield - until you realise that your capital was being eroded at about 43% pa as the downtrend progressed!

Why buy any falling stock when the odds are that you will be able to pick it up cheaper later on?

Snoopy
25-02-2010, 10:31 PM
You and others were "buying into weakness" all the way down as per the charts that began this thread. By contrast, the green arrows mark buying into strength. Which worked out better?

Certainly TUA is a relatively lightly traded stock but you overestimate its trading difficulty. For example, after triggering Sell signals, the shareprice moved little for about 4 months, allowing plenty of time to exit. You can't expect to unwind a substantial position in a small company in a single day.
Similarly, when buy signals began triggering, the shareprice moved little for 4 months allowing a leisurely entry.


A straw man argument as far as I am concerned Phaedrus. I can't speak for those 'others'. But I was certainly *not* buying all the way down as shown on your chart. The most I ever paid for TUA shares was $1.70. If I consider the dividends received over the last three and one half years even my 'worst' positioning into TUA is back in the black. "Buying into weakness" is simply a strategy to get around the liquidity problems of lightly traded shares. (I note that one indicator that you have not shown on your chart is the actual volume of shares traded.)

Those green buy signals of yours were generated after the release of the CY2008 annual result. As your own chart shows Phaedrus, the share price subsequently fell 10-20% *below* the entry prices recommended on the chart. Our hypothetical TAer would had had to have had a cast iron stomach to get through that!

Finally your trendline was drawn as the share price rose from 45c to 50c. Far from an obvious trend starting point of the recovery, the first few months of CY2009 was a time of real risk for the company. The possibility that sales would fall and costs would not be able to be consummately reduced meant that even I had doubts about investing in TUA at that time. Waiting for some real financial results to be dished up (March 2009) was the way to mitigate this risk. And even after the results were released, it was far from clear that this upturn could be maintained. So much for the reality of that 'leisurely entry period' you talked about. The TA might have stacked up for you. But the FA certainly didn't stack up for me.



Why would you want to "sell into strength"?


To get around the liquidity problems.



The result is an average price paid of $1.37 and a position that has been underwater for the greater part of those three and a half years.


It is the price at the end of your investment period that matters. The fact that the price dips between when you buy and ultimately sell may affect your nerves. But it need have no effect on your returns.



You would have been far better off not accumulating during the long downtrend, but buying anytime at all once the uptrend began. You and others were focusing on the low PE and the "13%" dividend yield - while your capital was being eroded at well over 40% pa!


You are quite wrong there Phaedrus. As it turned out I made a dividend yield of some 10% every year and a modest *capital gain* throughout one of the most turbulent periods in sharemarket history. That is a huge outperformance by TUA bought at $1.37 of any NZX benchmark you care to name.



Buying downtrending stocks is not a good idea - regardless of the dividend yield!


Not true, as proved by this example.

SNOOPY

discl: hold TUA

Phaedrus
26-02-2010, 02:02 PM
I was certainly *not* buying all the way down as shown on your chart.The chart featured anyone that was buying into the established downtrend. Unfortunately, you were not the only one!

http://i602.photobucket.com/albums/tt102/PhaedrusPB/TUA226.gif


The most I ever paid for TUA shares was $1.70. Fine, but the question is this. Was it a good move to be buying a stock that was in a steep ongoing downtrend? Wouldn't you have been better NOT buying at $1.70 and waiting for the downtrend to reverse before investing?


I note that one indicator that you have not shown on your chart is the actual volume of shares traded.All technical indicators had triggered buy signals by 1/4/09. Over the next 4.5 months, at prices never exceding 80 cents 788,605 TUA shares changed hands for $572,145 at an average price of 72.5 cents. That's enough to get you into the "top twenty shareholders list" five times over!!!!!!!! TUA liquidity is an issue, but it is not as big a problem as you make out.


Those green buy signals of yours were generated after the release of the CY2008 annual result. As your own chart shows Phaedrus, the share price subsequently fell 10-20% *below* the entry prices recommended on the chart. Our hypothetical TAer would had had to have had a cast iron stomach to get through that!Not at all. What was the main technical reason for buying TUA? The fact that the long downtrend had ended and a new uptrend had begun. There was a confirmed uptrend, with a confirmed trendline in place. Did any subsequent fall in price come anywhere near breaking this trendline? No. The trendline remained intact and was in fact re-confirmed twice more in July.


The first few months of CY2009 was a time of real risk for the company. The possibility that sales would fall and costs would not be able to be consummately reduced meant that even I had doubts about investing in TUA at that time. Waiting for some real financial results to be dished up (March 2009) was the way to mitigate this risk..... the FA certainly didn't stack up for me.I appreciate that Snoopy. I can understand that you might not want to buy at such a time. But surely the time for you to buy was after the March 2009 results? When market sentiment agreed with your fundamental analysis and TUA was in an uptrend?


The TA might have stacked up for you.It stacked up for anybody - for the first time in over 4 years!


It is the price at the end of your investment period that matters. The fact that the price dips between when you buy and ultimately sell may affect your nerves, but it need have no effect on your returns.Of course it will have an effect on your returns! Your purchase price is the most crucial factor. The fact is that had you not bought any TUA when it was in a downtrend and waited until it was in an uptrend (and the March report was out) before buying, you would now have a much lower average TUA entry price.

Zito
26-02-2010, 03:17 PM
The obvious inference to be made from Phaedrus's post is that if you put your money into a downtrending stock and justify it by pointing out the low PE and the excellent yield, you may as well have your money safely in the bank, obtaining yield that way without the risk of capital erosion.

J R Ewing
26-02-2010, 04:17 PM
The obvious inference to be made from Phaedrus's post is that if you put your money into a downtrending stock and justify it by pointing out the low PE and the excellent yield, you may as well have your money safely in the bank, obtaining yield that way without the risk of capital erosion.

I'm pretty sure nobody buys a stock expecting it to go down. The point is whether the low PE, yeild etc. is a reliable (better) indicator that it will move up, or if you can pick that the trend has changed from charting more reliably. I'm not much up with charts, so don't shoot me down in flames, but I reckon Phaedrus's chart must have been VERY close to showing a buy signal in early 2008. It seems easy to see where to draw those lines after the fact to keep you out of the stock during that spike upwards but get you into the stock when the "real" uptrend started.

percy
26-02-2010, 06:20 PM
I am finding TA a very helpfull and usefull tool.Phaedrus's input has made me look at charts with more confidence.A couple of weeks ago I had to find money to take up a SPP .
I was unsure whether to sell TLS or WTF ,both in aussie.I looked at both ,was unsure where TLS was going but could see WTF was in a very strong up trend.I sold the TLS.Since doing this TLS has really fallen away while WTF has continued onwards and upwards.Would have been well out of pocket should I have sold WTF.Phaedrus's charts are excellent and reading his inteligent coments certainly helped me do it right.

Snoopy
26-02-2010, 08:04 PM
Was it a good move to be buying a stock that was in a steep ongoing downtrend? Wouldn't you have been better NOT buying at $1.70 and waiting for the downtrend to reverse before investing?.


At the time TUA was trading in unchartered (sic) territory. Remember this was before the internal fraud was made public. Before the global financial crisis. If I had known these things were coming, I probably would *not* have bought at $1.70. But at the time we had a company in a quasi-monopoly position being battered by what I thought was a normal cyclical downturn, perhaps exaggerated by the rise of 'Trade Me'. The share price had already been hammered down to around 50% of what it was two years previously. I thought that when the upturn came, $1.70 would look like a decent entry price. [ Perhaps in another couple of years this will still prove to be so (although I wouldn't bet the farm on it)!? ]
Yes, buying at $1.70 was a risk, but in my assessment at the time, a risk worth taking.



All technical indicators had triggered buy signals by 1/4/09. Over the next 4.5 months, at prices never exceding 80 cents 788,605 TUA shares changed hands for $572,145 at an average price of 72.5 cents. That's enough to get you into the "top twenty shareholders list" five times over!!!!!!!! TUA liquidity is an issue, but it is not as big a problem as you make out.

What was the main technical reason for buying TUA? The fact that the long downtrend had ended and a new uptrend had begun. There was a confirmed uptrend, with a confirmed trendline in place. Did any subsequent fall in price come anywhere near breaking this trendline? No. The trendline remained intact and was in fact re-confirmed twice more in July.


I am not arguing with your reasoning above Phaedrus. As you say the T/A did stack up. But as you also say, you use a combination of FA and TA. In my opinion the FA *did not* stack up. For that reason alone I wouldn't have touched TUA during the period the share price quickly rose from around 60c to around 80c. In fact I did buy a few when the share was trading in the latter part of your 'green box buy zone' at 70c. But I couldn't buy all the shares I was after at 70c.

Your confirmed uptrend was based on what I would call 'fundamentally speculative data'. I find it too risky to invest on that basis myself, even if those that did take the risk did end up reaping the rewards in this instance.



I appreciate that Snoopy. I can understand that you might not want to buy at such a time. But surely the time for you to buy was after the March 2009 results? When market sentiment agreed with your fundamental analysis and TUA was in an uptrend?


Well I did buy some 10% of the shares I own after that March 2009 result. And if I had not bought more earlier, perhaps I would have bought still more later? There are other considerations here. Like I didn't want to significantly overweight my position into what is still a relatively illiquid share. And if I had paid 'a bit too much' for some of my shares before, then I had to wipe the fraud and GFC off my brow, take it on the chin and move on. In the end I got the number of shares I was after. Despite what your charts say was possible, is there actually *any* TA investor out there who can say they got all of the TUA shares that they wanted?

SNOOPY

Snoopy
26-02-2010, 08:25 PM
The obvious inference to be made from Phaedrus's post is that if you put your money into a downtrending stock and justify it by pointing out the low PE and the excellent yield, you may as well have your money safely in the bank, obtaining yield that way without the risk of capital erosion.


No trend lasts forever Zito. If you can rake in a dividend yield that is more than twice what you can get with a term deposit at the bank, and you can afford to hold through the bad times while share price declines and still be there when the share price rises again, then why not do it? If you buy right to start with, the risk of capital erosion as you put in the long term it is not nearly as great as you think.

SNOOPY

Phaedrus
28-02-2010, 09:24 PM
I'm pretty sure nobody buys a stock expecting it to go down.But JR, that's exactly what those buying downtrending stocks should expect! Trends can (and do) continue for YEARS. That is why buying stocks that are already in an established downtrend is not a good idea.


The point is whether the low PE, yeild etc. is a reliable (better) indicator that (a share price) will move up, or if you can pick that the trend has changed from charting more reliably. You will never be able to pick a trend change from the PE or yield. All you can do is say "in my opinion, with fundamentals this good, this stock "ought" to be in an uptrend". Of course, if the market does not agree with you and is in fact marking the stock down, it will be in an easily recognisable downtrend. To pick when a trend changes is kindergarten level TA and there are many effective trend monitoring indicators.


It seems easy to see where to draw those lines after the fact to keep you out of the stock during that spike upwards but get you into the stock when the "real" uptrend started.That's called "curve fitting", JR and people get angry when falsely accused of it.
Do you realise that everything controlling where "those lines" were drawn was established long before any buy was signaled?
Featuring indicators posted here in 2007?
Using parameters set in 2004?

JR, this type of FA/TA comparison seems to be new to you, but there have been plenty of practically identical cases posted here on stocks like TEL, RBD, SCT and others. All in obvious downtrends, with people buying more and more as the shareprice fell further and further. At the time, I was helpfully, gently and kindly drawing attention to this painfully obvious fact.

For the life of me, I cannot understand why anyone would buy a downtrending stock. Why not delay your purchase until it stops falling? If you want to be safer still, why not wait until it starts rising?
What is the hurry?

I thought fundamentalists were supposed to be patient types!

J R Ewing
01-03-2010, 10:27 AM
Phaedrus, I did not intend to cause offence, sorry if I did. I am (as you say) unfamiliar with this. As a layman however, I do not fully understand why the sharp rise in the 4 indicators above the main chart in early 2008 would not constitute a buy signal? I was simply saying that if I had been following the chart at that time, those spikes might have impressed me enough to start buying. Especially when you consider that immediately after the later sell signal triggered, three of the four indicators fell back below the line.

Also, on the main graph, what determines the gradient of the red line showing that the downtrend is still in place?

Phaedrus
01-03-2010, 11:57 AM
I do not fully understand why the sharp rise in the 4 indicators above the main chart in early 2008 would not constitute a buy signal.Buy signals are triggered by the oscillator rising above the green horizontal signal line. A sharp rise ending short of the signal line does not constitute a buy signal.


I was simply saying that if I had been following the chart at that time, those spikes might have impressed me enough to start buying......They shouldn't impress you. These oscillators have had other sharpish rises that fell short of triggering Buy signals. It is a break above the signal line that should start you buying.


....Especially when you consider that immediately after the [(later)] sell signal triggered, three of the four indicators fell back below the line.That fact would have only been revealed later and was not relevant because the oscillators had done their job beautifully - keeping you out of this stock for over 4 years. TUR was now in a confirmed uptrend.


What determines the gradient of the red line showing that the downtrend is still in place?That is a trendline. In a downtrend they are drawn between price reaction highs. Over the course of that long downtrend, many trendlines could have been drawn. Any buy signals generated by price action breaking above any of those (short-term) trendlines would have been unconfirmed by the 4 oscillators, and thus ignored. By April 2008, however, there was only one place a longterm trendline could be drawn - from the Feb '05 high to the March '08 high. When this trendline was eventually broken it gave a signal that was confirmed by all the other indicators, giving a nice clear unequivocal Buy.

Jay
01-03-2010, 12:53 PM
Phaedrus, while we are on the general subject, what I struggle with sometimes is once you buy and set your initial stop loss (in case it goes down), however lets say it goes up, so do you immediately move the the exit point higher say to the next low up or what I'm trying to say is the signals that got you in, do not necessarily become the signals for getting you out over the next few days. I'm referring to the first few days to week of a trade. After that you can use the trendlines OBV etc as you have mentioned.

J R Ewing
02-03-2010, 03:14 PM
Phaedrus, thanks for taking the time to answer my questions.

Phaedrus
02-03-2010, 07:49 PM
When you buy (lets say it goes up) do you immediately move the the exit point higher say to the next low up?You could, depending on just how tightly you want to monitor the trade. I like to give stocks a bit of breathing room when I first buy. It often takes a little while for trends to settle down and you don't want to be flicked out prematurely.


Do the signals that got you in become the signals for getting you out over the next few days? I'm referring to the first few days to week of a trade.The indicators that got you into a trade do not have to be the indicators you use to exit it. These would be chosen to suit your specific trading plan eg trend indicators if you want to trade the trend, oscillators if you are trying to range trade etc. If you have been lucky enough to get in right at the start of an uptrend, it will take a few days trading to give you a handle on the uptrend. Once you have two reaction lows, you can draw a tentative trendline. Until this happens, you can follow the uptrend directly by using daily candlesticks.
Sometimes (as per the TUA chart above) by the time you get your Buy signals, a confirmed uptrend is already underway with a confirmed trendline already in place.

Jay
02-03-2010, 09:24 PM
Thnaks for the reply Phaedrus.
Much appreciated, confirmed my thinking.
Just a case of sticking to the plan as I have seen it work on "paper trading" most of the time

Snoopy
23-04-2010, 07:31 PM
If you can rake in a dividend yield that is more than twice what you can get with a term deposit at the bank, and you can afford to hold through the bad times while share price declines and still be there when the share price rises again, then why not do it? If you buy right to start with, the risk of capital erosion as you put in the long term it is not nearly as great as you think

Q1 result up 8% in a tough market. In a delayed reaction today TUA rose 8% to $1.60, but on a measly 2500 shares. With poor liquidity the best time to accumulate a share like this is on the way down. My average purchase price was $1.37 and when I factor in my dividends of 24cps over the last couple of years I am looking at gains of around 34% - a huge success. And all this over one of the toughest periods ever in the markets! TUA is surely worthy of its 'case study' status.

SNOOPY

percy
23-04-2010, 09:07 PM
I brought some for the wife on 17/3/2008 at $1.02 as I thought TUA was a strong brand that used car buyers would trust.I was at the time impressed they were starting to finance car deals without coming back to shareholders for funds.A good case of a well focused company realising there was a place for them in internet led business and altering the company to suit THE CUSTOMER .

Phaedrus
24-04-2010, 06:24 PM
With poor liquidity the best time to accumulate a share like this is on the way down. Nonsense! TUA's average daily volume is much the same regardless of whether it is going up or down. Snoopy, you were buying TUA on the way down at $1.70. Had you waited for the downtrend to reverse, you could have bought for around a dollar less!


My average purchase price was $1.37 Right, that was the best you could achieve by buying on the way down. Now let's look at buying on the way up, when the downtrend had ended. All technical indicators had triggered buy signals by 1/4/09. Over the next 4.5 months, at prices never exceding 80 cents 788,605 TUA shares changed hands for $572,145 at an average price of 72.5 cents. As I have said before, that's enough to get you into the "top twenty shareholders" list five times over!


With dividends, I am looking at gains of around 34% - a huge success. Snoopy, a 34% gain over three and a half years is about 8.7% pa. You see this as "a huge success". To me, your approach was a catalogue of errors. We are doomed to disagree over this and I doubt that you will ever even accept that your initial $1.70 purchase of TUA was a mistake - let alone the actions that followed that purchase :-

(1) The initial mistake. Buying a stock that was in a downtrend.
(2) When the downtrend continued, failing to recognise or accept that buying had been a mistake.
(3) Adding to a losing investment, compounding the loss. When you are in a hole - stop digging!
(4) Averaging down - continuing to add to the poor initial investments as the downtrend continued. Throwing good money after bad.


TUA is surely worthy of its 'case study' status.I agree. It has provided readers with a realtime comparison of two very different investment approaches, enabling an easy comparison of their relative performance. The bottom line.........

Fundamental analysis, buying on the way down, dollar cost averaging, result :- 34% gain over three and a half years. 8.7% pa.
Technical analysis, waiting for entry signals, buying on the way up, result :- 127% gain in 12 months.

Game, set and match to TA!
http://i602.photobucket.com/albums/tt102/PhaedrusPB/TUA424.gif

percy
24-04-2010, 07:35 PM
That is a huge difference Phaedrus. I have WTF in Aussie.It has falllen like a lead baloon.On stocknessmonster charts I did not see any warnings.What was I missing and where should I have been looking? As allways I look forward to your posts.

Snoopy
27-04-2010, 03:03 PM
Right, that was the best you could achieve by buying on the way down.
Now let's look at buying on the way up, when the downtrend had
ended. All technical indicators had triggered buy signals by 1/4/09.
Over the next 4.5 months, at prices never exceding 80 cents 788,605
TUA shares changed hands for $572,145 at an average price of 72.5
cents. As I have said before, that's enough to get you into the "top
twenty shareholders" list five times over!


A $1.37 average share price purchase was what I did achieve
Phaedrus. I made no claim on optimization. Percy, if that $1.02
purchase he made for his wife was an 'all in one investment', has done
better than I did for a start. As it happens I also bought some of my
shares at $1.02, and some of my shares at the price level your charts,
Phaedrus, suggested I should at 70c. But I also bought at $1.21,
$1.40, $1.45, $1.43, $1.62 and $1.70, the sum total of which blew out
my average purchase cost to $1.37.

There were a couple of readily identifiable reasons for my overall sub-
optimal purchase timing.

A/ I was assuming the car business was entering a normal cyclical
downturn. I timed my first entry with the benefit of hindsight, early.
Instead we went into the worst motor market decline for 50+ years.
B/ I assumed the published profits were accurate, whereas in fact there
was a significant fraud concealed inside the audited results.

Both of these reasons I would argue were not foreseeable without the
benefit of hindsight.



Snoopy, a 34% gain over three and a half years is about 8.7% pa. You
see this as "a huge success". To me, your approach was a catalogue of
errors


Phaedrus those inputs were two-year return figures that you have
misappropriated over a much longer period. My median TUA holding
time is three years. During that time I received dividends of 37.2cps
(after tax). Add that to the share price appreciation from $1.37 to
$1.60 and the total gain per share is 60.2cps. That makes a return of
over 13% per year (after tax) for three years in a row.

Over that same time the gross NZX50 declined from around 4000 to
3300. This represents a loss of some 6% per annum. My TUA
return relative to the index was therefore +19% every year for
three years! The rational reader could only see that as a huge
success. The fact that I was able to achieve this result despite
the problems outlined above, just emphasizes the robustness of my
investment strategy with regards to TUA



Fundamental analysis, buying on the way down, dollar cost averaging,
result :- 13% gain every year over three years. (corrected)
Technical analysis, waiting for entry signals, buying on the way up,
result :- 127% gain in 12 months.


Except that no-one executed this TA strategy of yours Phaedrus. The
reason being that the consummate FA picture at the time was of a
company which:

A/ had stabalised their earnings at historically low levels. But
B/ were a company far from confident of forecasting sustained
improvement, and
C/ had just had a fraud scandal, which left investors unsure if they
could trust the company's reporting systems.

As you keep reminding us Phaedrus your preferred investment
approach is a combination of FA and TA
Any investor would have had to be a pure TA zealot to have put all their
investment money on the line at 70c at the time your chart suggested.
I would be very surprised if any investor/trader did. That leaves your
TA 'win' as a straw man result.

SNOOPY

Snoopy
23-07-2010, 10:09 AM
SSH notice today. White River Partners have reduced their holding from around 12% to 9%. I have noticed the TUA price has been a bit weak over the last month. This selldown could explain it.

SNOOPY

Phaedrus
23-07-2010, 01:51 PM
A large holder selling down eh? Technical types would regard that as Bearish. (Of course they would not be holding TUA because it is currently in a downtrend.)

I will say this about TUA, though - it does have very nice, tidy, clear trends.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/TUA723.gif

percy
23-07-2010, 03:15 PM
Thank Phaedrus, I sold my wife's holding this afternoon.

Snoopy
20-08-2010, 10:47 AM
A large holder selling down eh? Technical types would regard that as Bearish.

HY2010 result out and NPAT is up 6%, although that is down on 2nd HY2009. Encouraging to see the finance division is growing significantly. This I think this will be a key competitive advantage for TUA going forward with many of the independent vehicle finance companies struck down. Bring on the double dip recession that will allow me to top up my TUA shares cheaply (Good bear, nice tame bear). Otherwise I am happy to hold TUA for many years to keep raking in that dividend yield (14% gross at $1.25).

SNOOPY

Snoopy
26-08-2010, 10:54 PM
Thank Phaedrus, I sold my wife's holding this afternoon.

You are not alone in selling out Percy. This from the GPG half year result

---------

Consequently, we have closed the Auckland office and are selling off the New Zealand share portfolio other than the two major investments, Turners & Growers (66%) and Tower (35%) which have been transferred to Australian portfolio management. When we established in New Zealand, in the early 1990's, there were no undue expectations but, largely due to Tony's efforts, it proved more active and rewarding than anticipated.

More recently, however, there have been little or no opportunities and the New Zealand operation has necessarily become expendable for GPG.

---------

Translation: "Thanks Tony Gibbs for all that profit from NZ which we didn't expect, but now we spit on your efforts - good riddence."

One of those shares that is now clearly on the block from the GPG portfolio is this 'other' Turners, 'Turners Auctions'. The share price is looking quite strong, and with the GPG stake up for grabs, perhaps some corporate activity on the TUA register is not out of the question? Watch this space.

SNOOPY

Snoopy
24-09-2010, 06:56 PM
Encouraging to see the finance division is growing significantly.


With finance company collapses decimating the finance industry in New Zealand investors might rightly ask, where do we go from here? I would suggest TUA. A yield around 12% gross, supported by a growing finance division. In HY2010, TUA generated 24% of their profit from their internal finance division, verses 5.6% in HY2009. All of TUA's profit growth came from finance even as the underlying car market continued to be difficult. Sadly those less savvy still believe TUA is just a boring car auction company in a difficult market, and ignore the dividends, even though TUA has outperformed the NZX50 for the last two and three years based on dividends alone! More fool them.

SNOOPY (discl: hold TUA)

Snoopy
02-11-2010, 10:12 PM
Sadly those less savvy still believe TUA is just a boring car auction company in a difficult market, and ignore the dividends, even though TUA has outperformed the NZX50 for the last two and three years based on dividends alone!


Looks like Brian Gaynor is onto this story, with Milford Asset Management declaring a significant 5% stake. Milford are taking advantage of share price weakness as US based White River Partners continue to sell down their stake. I think WRP are making a loss on their stake in NZ dollar terms. But perversely, the way the $NZ has been rising against the $US, there is probably a profit there for the WRP United States based customers.
I wonder whether history will judge White River Partners or Milford Asset Management to be the goats in this TUA investment game?

SNOOPY

percy
03-11-2010, 06:18 AM
Looks like Brian Gaynor is onto this story, with Milford Asset Management declaring a significant 5% stake. Milford are taking advantage of share price weakness as US based White River Partners continue to sell down their stake. I think WRP are making a loss on their stake in NZ dollar terms. But perversely, the way the $NZ has been rising against the $US, there is probably a profit there for the WRP United States based customers.
I wonder whether history will judge White River Partners or Milford Asset Management to be the goats in this TUA investment game?

SNOOPY
For my two penny's worth I do not think it will be Milford.
question. How many or what % do white River still own ? I sold out and have been regreting doing so, as I feel TUA are good operators and financing their own sales will certainly add to profits.

J R Ewing
03-11-2010, 08:35 AM
For my two penny's worth I do not think it will be Milford.
question. How many or what % do white River still own ? I sold out and have been regreting doing so, as I feel TUA are good operators and financing their own sales will certainly add to profits.

Yes, financing makes good sense. Many car finance companies came unstuck during the GFC, I think in part because they were not great at valuing the asset for security purposes and got caught short if the loan turned bad. Turners have great expertise in this area and can easily realise the equity in the car in the event it needs to be repossesed.

Snoopy
06-12-2010, 08:40 AM
This is an excellent example of the lack of correlation that can exist between company announcements and stock performance.

It shows the boundless optimism that some people can sustain in the face of unpleasant reality.

View it as an object lesson in the folly of buying into a downtrending stock and the inadvisability of "averaging down".

http://i602.photobucket.com/albums/tt102/PhaedrusPB/TUA22907fa.gif


Change the time frame to 5 years or so and the 'averaging down' system has shown a rather different result.

3081

I would hesitate to call TUA a long term investment, because I have only been invested for four years of my five year retrospective study period. Following my initial investment in the $1.70s, subsequent investments have been averaged out at a much more sensible $1.29. So despite doing everything wrong from a trading perspective, a major fraud within the company, the collapse of the the second hand car market amidst what is one of the worst global recessions in 60 years, how much money have I lost on TUA? None. I am actually showing a modest profit, ahead of the index over the period under study.

This is a textbook example of how investing in a beaten up company can lead to superior investment returns, no matter what the 'unpleasnt reality' seemed at the time.

Turning to my actual performance, while the subsequent acquisition prices have on average been good bets, the graph shows I would have done rather better if I had bought more shares when the price plunged to near its lows. I did buy some at 70c, but obviously I would have done better if I had bought more. Of course the graph never tells the full story. I had real doubts about the business model with the cost of Japanese car stock acquisition being so high and costs apparently increasing alarmingly. Nevertheless there was enough fat in the company, principally because of the very low company debt levels to get through this difficult time.

Overall assessment: Overall subsequent purchase price timing not very good (although I just explained why). Inital purchase of shares timing not very good. Yet thanks to averaging down TUA has been an above average performer for me.

SNOOPY

Snoopy
26-02-2011, 08:30 PM
question. How many or what % do white River still own ?

White River Partners are fully cashed out of TUA now, I think. On a slightly different note, had a look at the Turners Auction Christchurch Site today. I can't see any obvious earthquake damage.

SNOOPY

percy
26-02-2011, 08:49 PM
White River Partners are fully cashed out of TUA now, I think. On a slightly different note, had a look at the Turners Auction Christchurch Site today. I can't see any obvious earthquake damage.

SNOOPY

They should make some money selling damaged cars shortly.Were you in PW building.A trust I am involved in use Harmans,while I have used L.V North.Both 14th or 16th floors.I hope they do home visits as you will not get me in there.Are you OK.?
Turners building should be OK.I was in Bunnings ,next door,similar building,yesterday and all OK.

Snoopy
05-03-2011, 06:01 PM
Modest result (NPAT $3.0m -8%) but probably strong cashflow through destocking has lead to a bumper but unsustainable final dividend (12cps). Shareprice jumped accordingly, but with PE at 12.5 (based on SP=$1.40) SP growth is probably over. Nevertheless a good income share to be held for the years ahead. I'm not selling down.

SNOOPY

tim23
05-03-2011, 06:07 PM
Don't forget the special as well of 6c!

Snoopy
07-03-2011, 10:35 AM
Don't forget the special as well of 6c!

I included the 6c special in my 12c final dividend. At a SP of $1.40 after the payout then the PE drops to 12.5 and the gross dividend yield becomes 11.7%, based on a a total dividend od 11cps. Seems ballpark right. I think SP growth is over, but this is a good income investor hold.

SNOOPY

Snoopy
29-04-2011, 02:37 PM
Just a quick note on the AGM presentations.

Overall sales are down 7.5% in Q1, which I thought wasn't too bad considering inside that figure Christchurch sales are down 30% post earthquake. The Christchurch premises has become sub let to other associated businesses, which have had their own locations damaged or unaccessible in the earthquake. That will make up for some of that Turners Christchurch sales decline. It was good to see the Auckland premises has had a rent renegotiation with a reduction is area occupied for a cheaper price. This is the advantage of not owning your own premises. You can downsize in an illiquid property market. The overall vehicle market remains noticeably down from what was the norm three or more years ago. Turners are adjusting to this new 'normal'.

It was also good to see a move to national weekly auctions in commercial vehicles (April 2010) and motorbikes (February 2010) and planned regional auctions in other categories like and damaged vehicles: Palmerston North/Napier/Wellington by June 2011 Auckland/Hamilton/Tauranga/Whangarei in Q3 2011 and Christchurch/Dunedin in Q4 2011 using the 'local presence' but 'national sales process' model.

The number of second hand dealers in the market continues to decline which in turn means that Turners market share is becoming stronger. Overall I was quite happy with the way management are organizing themselves now after the admitted past mistakes.

We still have the possibility of corporate action when GPG sells their cornerstone holding, and plenty of dividend to feast on while that gets resolve. I was considering taking some profits on what I thought was an overweight position, but I have now reversed that thinking and will buy on any significant weakness. Selling now I don't think will prove long term smart.

SNOOPY

percy
29-04-2011, 03:05 PM
Just a quick note on the AGM presentations.

Overall sales are down 7.5% in Q1, which I thought wasn't too bad considering inside that figure Christchurch sales are down 30% post earthquake. The Christchurch premises has become sub let to other associated businesses, which have had their own locations damaged or unaccessible in the earthquake. That will make up for some of that Turners Christchurch sales decline. It was good to see the Auckland premises has had a rent renegotiation with a reduction is area occupied for a cheaper price. This is the advantage of not owning your own premises. You can downsize in an illiquid property market. The overall vehicle market remains noticeably down from what was the norm three or more years ago. Turners are adjusting to this new 'normal'.

It was also good to see a move to national weekly auctions in commercial vehicles (April 2010) and motorbikes (February 2010) and planned regional auctions in other categories like and damaged vehicles: Palmerston North/Napier/Wellington by June 2011 Auckland/Hamilton/Tauranga/Whangarei in Q3 2011 and Christchurch/Dunedin in Q4 2011 using the 'local presence' but 'national sales process' model.

The number of second hand dealers in the market continues to decline which in turn means that Turners market share is becoming stronger. Overall I was quite happy with the way management are organizing themselves now after the admitted past mistakes.

We still have the possibility of corporate action when GPG sells their cornerstone holding, and plenty of dividend to feast on while that gets resolve. I was considering taking some profits on what I thought was an overweight position, but I have now reversed that thinking and will buy on any significant weakness. Selling now I don't think will prove long term smart.

SNOOPY
A good update.Any talk of their finance company.? Any, or much supply problems in sourcing used cars from Japan? I still watch this company,and must admit I thought they would have come back a bit.Must be the strong divie.[which I miss]

Snoopy
03-05-2011, 01:14 PM
Any talk of their finance company.?


Turners Finance loan book $19.3 million +28%.

Stronger conversion rate (customers to loans), and fewer early settlements. Average loan value up 10%. Mechanical breakdown insurance up 45% Total value of ledger up 28% to $19.3 million. Noted as a growth opportunity going forwards.



Any, or much supply problems in sourcing used cars from Japan?


New vehicle sales in japan down 37% (pre Tsunami). That means less trade in vehicles will be available for sale. Exchange rate has made buying difficult.

Increased international competition for the cars that are there.

SNOOPY

Snoopy
18-08-2011, 03:44 PM
I wrote on the Colonial Motor thread:

"According to some newspaper summaries, TUA has the highest gross dividend yield of any share on the NZX. In fact this is an historical distortion, because of a 6cps bonus special dividend paid out on 7th April 2011. Even so at $1.37, TUA is on an historic normalized dividend (11cps) gross yield of 11.5%. Pretty useful."

Events have overtaken my comment as Turners Auctions declared yet another 6c special dividend on top of their regular interim dividend today. This is the best cash generator on the NZX bar none. Even I didn't believe the 18% gross yield was sustainable and TUA do it two years in a row!

However, long term paying out more than you earn in profit is not sustainable. I suspect TUA are just clearing out their imputation credits so they aren't wiped out by upcoming corporate activity in TUA shares. Perhaps this is a sign that GPG are about to dispose of their TUA holding?

SNOOPY

BIRMANBOY
18-08-2011, 04:58 PM
Does GPG still hold the 35%? How do you think that will pan out if they dispose of it. Like you i love the dividends...dont want the good times to finish!
I wrote on the Colonial Motor thread:

"According to some newspaper summaries, TUA has the highest gross dividend yield of any share on the NZX. In fact this is an historical distortion, because of a 6cps bonus special dividend paid out on 7th April 2011. Even so at $1.37, TUA is on an historic normalized dividend (11cps) gross yield of 11.5%. Pretty useful."

Events have overtaken my comment as Turners Auctions declared yet another 6c special dividend on top of their regular interim dividend today. This is the best cash generator on the NZX bar none. Even I didn't believe the 18% gross yield was sustainable and TUA do it two years in a row!

However, long term paying out more than you earn in profit is not sustainable. I suspect TUA are just clearing out their imputation credits so they aren't wiped out by upcoming corporate activity in TUA shares. Perhaps this is a sign that GPG are about to dispose of their TUA holding?

SNOOPY

BIRMANBOY
19-08-2011, 04:26 PM
Up to 1.55 today Oh.god...the temptation is almost too much...take the money and run or keep to the plan. The ambivalence of the mind huh?

Snoopy
19-08-2011, 05:07 PM
Does GPG still hold the 35%? How do you think that will pan out if they dispose of it. Like you i love the dividends...dont want the good times to finish!


No the GPG stake is now 19.4% and has been for some years. The stake if sold may be spread between institutions. Or it could be used by someone as a springboard to a full takeover.


A quick review of the HY2011 result. $1.630m is the best first half result since 2006. Given the difficult market for big-ticket items in general, I was impressed. Of course the decline in Turner’s own Japanese import car business was mentioned. Ironically the decline in the imported truck business seems to have revived the market for recycled New Zealand new trucks. That has had a cushioning effect on sales for the great benefit of TUA shareholders, as has been the rise and rise of the finance side of the business.

I was expecting a tough half year with the opportunity to top up my holding as traders sold down. Instead the share price has rocketed up to $1.50 , to make TUA the best performing share on the market today, even ahead of the resurgent Telecom. How annoying ;-P

SNOOPY

Discl: hold TEL and TUA

Snoopy
19-08-2011, 05:08 PM
Up to 1.55 today Oh.god...the temptation is almost too much...take the money and run or keep to the plan. The ambivalence of the mind huh?

Don't do it Birdman. Even $1.55 will look dirt cheap by the end of the year. Just a hunch!

SNOOPY

BIRMANBOY
19-08-2011, 05:15 PM
Yeh I'm holding but my "trading" half (the evil bastard) is giving me a hard time!!
Don't do it Birdman. Even $1.55 will look dirt cheap by the end of the year. Just a hunch!

SNOOPY

Snoopy
23-09-2011, 02:25 PM
Special div, together with GPG's 19.4% which they have to divest, suggests there is something bigger going on.


It was announced today that Milford Asset Management are the buying face for the GPG stake, and that some of the shares they have bought are going to be redistributed. The TUA share price dropped today from $1.45 to $1.35. I guess that is because any takeover activity that was speculated on has now been quashed. Not nice to see the share price drop today. But GPG shareholders have fared far worse than Joe Public, with the GPG holding virtually being given away at $1.15. Gaynor will be licking his lips even as GPG shareholders are fuming.

SNOOPY

Snoopy
28-10-2011, 06:05 PM
It was announced today that Milford Asset Management are the buying face for the GPG stake, and that some of the shares they have bought are going to be redistributed. The TUA share price dropped today from $1.45 to $1.35. I guess that is because any takeover activity that was speculated on has now been quashed. Not nice to see the share price drop today. But GPG shareholders have fared far worse than Joe Public, with the GPG holding virtually being given away at $1.15. Gaynor will be licking his lips even as GPG shareholders are fuming.


It was announced today that Milford are continuing to increase their stake, now up to 16.75% of the company. The share price is back up to $1.40 after yet another bumper dividend payout. A nice surprise was the 14th October profit upgrade:

"Turners Auctions advises that it expects Net Profit after Tax (NPAT) for the 2011 year to range between $3.4m and $3.6m. This compares to the 2010 NPAT
of $3.0m."

"Whilst the used vehicle market remains subdued, with reduced availability of imports from Japan, the performance of our Commercial and Trucks businesses has exceeded expectations. In addition, growth in the Turners Finance ledger and sales of insurance products have contributed to higher operating profits."

That translates to consumer demand being weaker than anticipated, but the commercial sector more than taking up the slack. There are many sad stories from the demise of the finance sector but here is one company that is benefitting - their own in house finance never being in more demand.

As the thread title says if you want a textbook study on how to cope with the new economic environment, this has to be it. No one is going to get rich quick buying TUA today. But drawing up a case to leave TUA out of a balanced investment portfolio is now very hard to do.

SNOOPY

Snoopy
07-02-2012, 01:32 PM
It was announced today that Milford are continuing to increase their stake, now up to 16.75% of the company. The share price is back up to $1.40 after yet another bumper dividend payout. A nice surprise was the 14th October profit upgrade:

"Turners Auctions advises that it expects Net Profit after Tax (NPAT) for the 2011 year to range between $3.4m and $3.6m. This compares to the 2010 NPAT
of $3.0m."

"Whilst the used vehicle market remains subdued, with reduced availability of imports from Japan, the performance of our Commercial and Trucks businesses has exceeded expectations. In addition, growth in the Turners Finance ledger and sales of insurance products have contributed to higher operating profits."

That translates to consumer demand being weaker than anticipated, but the commercial sector more than taking up the slack. There are many sad stories from the demise of the finance sector but here is one company that is benefitting - their own in house finance never being in more demand.


Milford Asset Management are continuing to buy TUA. The 3rd February announcement shows their shareholding is up to 18.21%.

Buyers are in the market today at $1.47, and the lowest seller is sitting there at $1.60. That $1.60 would be a break out form the current trading range if achieved.

Full year announcement was made on 25th February last year, so this years result maybe only a couple of weeks away. One word of caution. Do not expect the dividend rate to be maintained in 2012 as there were a couple of special dividends paid out last year. Nevertheless I am expecting a solid result to be announced come the end of the month.

SNOOPY

Snoopy
07-04-2012, 02:14 PM
Full year announcement was made on 25th February last year, so this years result maybe only a couple of weeks away. One word of caution. Do not expect the dividend rate to be maintained in 2012 as there were a couple of special dividends paid out last year. Nevertheless I am expecting a solid result to be announced come the end of the month.


Warren Buffett is well known for only investing in businesses that he understands. Those new investors in Turner’s Auctions (TUA) - and that includes the ACC (who have quietly accumulated just under 4% of the company over this last year) - have this source of comfort. A comprehensive business performance snapshot of TUA can be gleaned from reading just a single page of the annual report (p8). That’s because it only takes one page to summarize one entire year’s activities!

Turner’s Auctions may be a very boring vehicle auction company. But it is also very easy to understand. The full year result of 13.5c eps was the best since 2006. The return on end of year equity of 21.5% was the best since 2005. The last half-year of trading was particularly encouraging. It was the most profitable half-year since 2005 despite traditionally the second half of each financial year being a seasonal low point.

The reason for this improving performance is simple. TUA have premises with essentially fixed costs. The more auction revenues that pass through their working buildings, the more of those revenues will flow to the bottom line. Furthermore the in house financing operation gives Turners a difficult to match competitive advantage. And with the shrinking of the number of second hand car dealers, “Turner’s Fleet” is able to pick up retail market revenue, even though the overall second hand vehicle market in general is not a high growth area.

Downside risk looks low as Turners are trading on an apparently sustainable gross dividend yield of 13% at a share price of $1.45 (I have excluded here the one off effect of historical special dividends here). If the momentum of this last half-year continues, there is a good chance that normal dividends will increase further and that should in turn drive the share price higher.

This share has been an absolute winner for me, not in capital gains terms (I have gained only 10cps total over five years) but in dividends. From the first tranche of shares I bought, I have harvested over 70cps in dividends (including specials) over the last five years since I started investing in TUA. Those who regard dividends as ‘not worth bothering about’ will no doubt be bewildered at my continuing success with this very efficiently run company.

SNOOPY

Corporate
07-04-2012, 05:00 PM
snoopy, profit up but operating cashflow down. Any ideas on why and do you think it is a reason for concern?

Snoopy
11-04-2012, 12:59 PM
snoopy, profit up but operating cashflow down. Any ideas on why and do you think it is a reason for concern?

Corporate, I hadn’t considered the deteriorating cashflow position. So your point is well made.

Generally if a company has no to low term debt, I don’t worry about cashflow that much. In this instance there is still $11m of cash on the balance sheet, despite the deteriorating cashflow, so I am not too concerned.

There are several reasons from the near $6m turnaround. Many of these can be picked up by just going through the cashflow statement and looking for differences year on year. TUA sought to clear out their imputation credits during the year, perhaps in anticipation of corporate activity from GPG selling its 19.4% stake - activity that did not happen. As a result the dividend nearly doubled, which accounted for $3m of the cashflow deterioration.

I note that inventory value has increased by $1.7m over the year. I think this might be explained because of the changes in rules for importing cars, which took effect on January 1st 2012. New anti-pollution requirements meant building up soon to be disallowed new stock would be a way of ensuring a supply of lower priced cars for the customer over the next few months.

$500,000 more tax was paid over the last year too. And it looks like around $700k more was spent on software. I note a new Chief Information Officer was installed during the year. That appointment may have been associated with an extensive software upgrade of some kind?

$3m+$1.7m+$0.5m+$0.7k= as near as dammit $6m.

Is that sufficient explanation for the $6m deterioration in cashflow you noted Corporate?

SNOOPY

Snoopy
30-06-2012, 02:49 PM
Don't do it Birdman. Even $1.55 will look dirt cheap by the end of the year. Just a hunch!


Buyers sitting at $1.49 and sellers at $1.57. TUA is riding the market volatility well.

Nevertheless couldn't resist putting TUA through my five year dividend flow valuation technique. The ordinary dividends paid out were as follows:

------

2012F: 6cps, 6cps
2011: 6cps, 6cps
2010: 7cps, 5cps
2009: 0.4cps, 5cps
2008: 4.7cps, 2.5cps

------

This gives an average net dividend yield of 9.72cps, which corresponds to a gross yield of:

9.72c/0.7 = 13.89c

Assuming an 8% gross yield over the business cycle is acceptable this implies a share price of :

13.89/0.08 = $1.74

SNOOPY

BIRMANBOY
30-06-2012, 03:27 PM
Yes remember that post..I was wondering at the time whether to take the money and run. However I Increased my holding and very happy with TUA. Very nice dividends and now my average cost is 1.35...would buy more but doesnt dip down enough so may have to bite the bullet and revise my buy in limit.
Buyers sitting at $1.49 and sellers at $1.57. TUA is riding the market volatility well.

Nevertheless couldn't resist putting TUA through my five year dividend flow valuation technique. The ordinary dividends paid out were as follows:

------

2012F: 6cps, 6cps
2011: 6cps, 6cps
2010: 7cps, 5cps
2009: 0.4cps, 5cps
2008: 4.7cps, 2.5cps

------

This gives an average net dividend yield of 9.72cps, which corresponds to a gross yield of:

9.72c/0.7 = 13.89c

Assuming an 8% gross yield over the business cycle is acceptable this implies a share price of :

13.89/0.08 = $1.74

SNOOPY

percy
13-08-2012, 07:24 PM
What ! no sellers?

BIRMANBOY
14-08-2012, 11:15 AM
Which would lead one to assume that SP is perceived (or Percy'd) as being lower than actual value/benefit to holders. As I have mentioned before think the sun rises from the Turners rear end.
What ! no sellers?

macduffy
14-08-2012, 01:47 PM
Not surprising, really. Top 20 holders account for a hefty 62.2% of the shares at last AR with only 10m shares left for us small players. I'd like to buy a few more too but unless one or more of the magnificent 20 decide to sell some I wouldn't think there'd be many on offer.

Snoopy
14-08-2012, 01:52 PM
What ! no sellers?

Some sellers came out of the woodwork today at $1.65. This is I believe the highest price for TUA in over two years. The new car market is doing well and I guess investors are thinking there will be a trickle down effect to used vehicle trading. All very good news I think for we existing shareholders.

SNOOPY

percy
14-08-2012, 02:08 PM
Not surprising, really. Top 20 holders account for a hefty 62.2% of the shares at last AR with only 10m shares left for us small players. I'd like to buy a few more too but unless one or more of the magnificent 20 decide to sell some I wouldn't think there'd be many on offer.

Last week a seller took all the buyers out down to $1.50 then there was a crossing.Approx 165,000 shares were traded.Buyers the reappeared and have taken small sellers out up to $1.65.

percy
14-08-2012, 02:14 PM
Some sellers came out of the woodwork today at $1.65. This is I believe the highest price for TUA in over two years. The new car market is doing well and I guess investors are thinking there will be a trickle down effect to used vehicle trading. All very good news I think for we existing shareholders.

SNOOPY

Second hand cars sales usually follow new car lead.Still small sellers.With new two year high SP could be poised for "trajectory".With TUA also clipping the finance ticket it certainly is good news for us existing shareholders.

percy
15-08-2012, 03:11 PM
Didn't take long for the seller/sellers of 13,000 shares at $1.66 to be taken out.!!!!

percy
16-08-2012, 10:08 AM
A very good result.NPAT up 19% on increased revenue of 6%. 7cent divie payable on 20th Sept.
Last sale $1.73.

winner69
16-08-2012, 11:29 AM
not too bad seeing basically a consumer discretionery stock eh percy

Consumers spending more again .... retail the place to be

percy
16-08-2012, 11:39 AM
not too bad seeing basically a consumer discretionery stock eh percy

Consumers spending more again .... retail the place to be

Yes.6% rev increase excellent.However the 19% increase in NPAT means they are clipping the ticket more often.
No[well maybe] ,No, still not the place to be. [unless you are an online retailer]

Snoopy
16-08-2012, 01:46 PM
not too bad seeing basically a consumer discretionary stock eh percy

Consumers spending more again .... retail the place to be


I find it interesting that there is often a reported disconnect between 'retail spending' and 'motoring spending'. Economists often remove changes in the price of petrol and remove changes in new car sales to get an idea of the 'underlying retail spending'.

I would argue that for most people having a reasonable car that goes well and isn't going to require huge injections of capital at the repair shop to keep it going is no longer a discretionary item. I would further argue that putting fuel into the said vehicle is not discretionary either.

Turners Auctions is probably the largest retail seller of cars in the country, at the non discretionary end of the market. I see TUA as a core part of my investment portfolio to be held through whatever flim flamming the wider 'retail' market suffers. It will take more than $1.75 to get me to part with any of my TUA shares!

SNOOPY

tim23
16-08-2012, 04:37 PM
Nice rebound from $1.50 no special this time, hard to believe that GPG sold at about $1.20 to Milford even then price was at big discount to market price.

Snoopy
18-08-2012, 03:05 PM
Buyers sitting at $1.49 and sellers at $1.57. TUA is riding the market volatility well.

Nevertheless couldn't resist putting TUA through my five year dividend flow valuation technique. The ordinary dividends paid out were as follows:

------

2012F: 6cps, 6cps
2011: 6cps, 6cps
2010: 7cps, 5cps
2009: 0.4cps, 5cps
2008: 4.7cps, 2.5cps

------

This gives an average net dividend yield of 9.72cps, which corresponds to a gross yield of:

9.72c/0.7 = 13.89c

Assuming an 8% gross yield over the business cycle is acceptable this implies a share price of :

13.89/0.08 = $1.74



Now the first half actual results are here time for an update:

------

2012F: 7cps, 6cps
2011: 6cps, 6cps
2010: 7cps, 5cps
2009: 0.4cps, 5cps
2008: 4.7cps, 2.5cps

------

This gives an average net dividend yield of 9.92cps, which corresponds to a gross yield of:

9.92c/0.7 = 14.17c

Assuming an 8% gross yield over the business cycle is acceptable this implies a share price of :

14.17/0.08 = $1.77

Actual closing market price yesterday was $1.77!

Not bad eh?

SNOOPY

BIRMANBOY
18-08-2012, 03:28 PM
We stand (or sit) in awe at your astonishing capabilities....muffled clapping (must be snoopys blanket!) heard offstage left. Whats your average cost per share if I may be so bold? Ive been looking to load up for ages but it keeps up very well unfortunately (or fortunately I suppose). Maybe after the dividend goes will drop a bit. Historically has risen as it gets closer to dividend date so could continue up more yet.
Now the first half actual results are here time for an update:

------

2012F: 7cps, 6cps
2011: 6cps, 6cps
2010: 7cps, 5cps
2009: 0.4cps, 5cps
2008: 4.7cps, 2.5cps

------

This gives an average net dividend yield of 9.72cps, which corresponds to a gross yield of:

9.92c/0.7 = 14.17c

Assuming an 8% gross yield over the business cycle is acceptable this implies a share price of :

14.17/0.08 = $1.77

Actual closing market price yesterday was $1.77!

Not bad eh?

SNOOPY

percy
18-08-2012, 04:20 PM
We stand (or sit) in awe at your astonishing capabilities....muffled clapping (must be snoopys blanket!) heard offstage left. Whats your average cost per share if I may be so bold? Ive been looking to load up for ages but it keeps up very well unfortunately (or fortunately I suppose). Maybe after the dividend goes will drop a bit. Historically has risen as it gets closer to dividend date so could continue up more yet.

Since October last year TUA has traded in "an oblong" formation.High of $1.59,low of $1.31.As often happens the direction of the "break out" is the future direction the SP will take.So maybe the SP will not drop to test the $1.59 [now] support line.So if you want in to enjoy the future trajectory don't muck around.

BIRMANBOY
19-08-2012, 01:09 PM
I'm in substantially already...just being greedy and wanting to add more but holding off until the price does a dip..hopefully into the mid $1.30"s. You could well be right however there seems to be a dearth of eager sellers:(..oh well..might have to look elsewhere.
Since October last year TUA has traded in "an oblong" formation.High of $1.59,low of $1.31.As often happens the direction of the "break out" is the future direction the SP will take.So maybe the SP will not drop to test the $1.59 [now] support line.So if you want in to enjoy the future trajectory don't muck around.

percy
19-08-2012, 02:00 PM
I'm in substantially already...just being greedy and wanting to add more but holding off until the price does a dip..hopefully into the mid $1.30"s. You could well be right however there seems to be a dearth of eager sellers:(..oh well..might have to look elsewhere.

I think you will have to.!!!!!!!!
ps.I have just looked up your stars; "Go past Go,collect your $200 and invest straight away in Estar."

Snoopy
20-08-2012, 12:48 PM
We stand (or sit) in awe at your astonishing capabilities....muffled clapping (must be snoopys blanket!) heard offstage left. Whats your average cost per share if I may be so bold?


$1.38. So you are a few cents up on me Birmanboy.

SNOOPY

BIRMANBOY
20-08-2012, 02:37 PM
Well done you.... (and me!) Yes always give me the proverbial warm and roseys to see the cap gain sitting there. Of course the real benefit is of course knowing that the overall dividend % return is higher since our buy in cost is a lot lower than current SP. Only down side is I sometimes wonder if I should be more forgiving with SP about buying more. The old classic conundrum...Do you wait for the perfect situation and go home single or take the "willing and available".
$1.38. So you are a few cents up on me Birmanboy.

SNOOPY

Snoopy
20-08-2012, 02:50 PM
Well done you.... (and me!) Yes always give me the proverbial warm and roseys to see the cap gain sitting there. Of course the real benefit is of course knowing that the overall dividend % return is higher since our buy in cost is a lot lower than current SP. Only down side is I sometimes wonder if I should be more forgiving with SP about buying more. The old classic conundrum...Do you wait for the perfect situation and go home single or take the "willing and available".


With my high dividend yield shares Birmanboy, I am a little less worried about buying shares at the optimum price. As we both know, it is those not owning TUA over the last few years that have made the costly mistake. Those special dividends and ordinary dividends have made this investment shine to the extent they are greater than our capital gain by a significant amount! Fluffing around worrying about the purchase price difference of a few cents was not significant in view of what has happened to the dividends and share price since.

With those companies more seriously orientated towards growth though retained earnings though, I do pay a greater amount of attention to the share price. Only by buying low can you achieve the discount to make the ultimate growth return worthwhile!

SNOOPY

Toasty
21-08-2012, 10:13 AM
I put this on my watch list at about $1.45 a few months ago after reading this thread and thought that when funds became available I would put a few in the portfolio. I love high div stocks.

Sadly it never quite eventuated that I had extra money lying about and I am now forced to watch the price at its current level. Sad face....

KJ
21-08-2012, 10:58 AM
I was not too clever with this.Bought back in Mar at 1.57 after having made the mistake of earlier getting out.You don't win em all.

BIRMANBOY
21-08-2012, 01:55 PM
A moral victory if not a physical one none the less. At least you were smart enough not to "borrow" from the kids uni fund. HAving done that of course would have inevitably forced the stock into a death spiral.;)
I put this on my watch list at about $1.45 a few months ago after reading this thread and thought that when funds became available I would put a few in the portfolio. I love high div stocks.

Sadly it never quite eventuated that I had extra money lying about and I am now forced to watch the price at its current level. Sad face....

BIRMANBOY
21-08-2012, 02:06 PM
At 1.57 you have a nice gain...that makes you clever in my book. This is getting harder to buy at "low" prices so you may well find that in 12 months it was a great buy. Also console yourself with very tasty dividends.
I was not too clever with this.Bought back in Mar at 1.57 after having made the mistake of earlier getting out.You don't win em all.

BIRMANBOY
21-08-2012, 03:39 PM
Estar...sounds like one of those "sing along karaoke" programs. If its new and "full of promise" I steer away from them like the plague. Monopoly...I'd probably invest in since its old and past its due by date (like me). My crystal ball (smaller but more efficient than your stars) tells me conservative, old and dividends is my forward. However I wish you well with your new romance. Just remember that the new girlfiend (or friend as the case may be) may be more attractive initially but will she still love you when you start farting in front of her?
I think you will have to.!!!!!!!!
ps.I have just looked up your stars; "Go past Go,collect your $200 and invest straight away in Estar."

percy
21-08-2012, 05:02 PM
Estar...sounds like one of those "sing along karaoke" programs. If its new and "full of promise" I steer away from them like the plague. Monopoly...I'd probably invest in since its old and past its due by date (like me). My crystal ball (smaller but more efficient than your stars) tells me conservative, old and dividends is my forward. However I wish you well with your new romance. Just remember that the new girlfiend (or friend as the case may be) may be more attractive initially but will she still love you when you start farting in front of her?

I have done the research,and in good faith suggested a very good company to you.
Consevative balance sheet,paying a divedend,dedicated staff,in a high growth sector.

janner
21-08-2012, 05:16 PM
As the Leader of the Pack ( aussie comp ) your research must be taken on board Percy..

Will have to look it over ..

BIRMANBOY
21-08-2012, 05:30 PM
I didnt mean to make fun of your suggestion Percy. Mrs. Birman boy will neuter me again if I look at any new "growth" stocks. I have too many other options that produce strong and consistant dividends to even contemplate a new growing company. Thats for you young and hungry chaps. Hope it does well for you though of course.
I have done the research,and in good faith suggested a very good company to you.
Consevative balance sheet,paying a divedend,dedicated staff,in a high growth sector.

percy
21-08-2012, 05:52 PM
After researching Estar,I am happy that it is my third largest holding,after EBO and RYM.I do not like retail stocks,yet 5 years ago I was in top 20 shareholders of SCY.The way of the internet,means physical shops have huge problems competing with internet retailers.Most positive retailers [Briscoes,Pumpkin Patch] are moving more resources to their web offering.Estaronline provides the complete package to retailers such as Briscoes,Ezibuy,JB Hi Fi ,World cup rugby etc,etc. They have a history of excellence.
Birmanboy,get your wife or chidren to do the research for you. !!!! lol.
janner.Thanks,Scotty has given all the links you need on Estar thread.

Snoopy
04-09-2012, 01:22 PM
------

2012F: 7cps, 6cps
2011: 6cps, 6cps
2010: 7cps, 5cps
2009: 0.4cps, 5cps
2008: 4.7cps, 2.5cps

------

This gives an average net dividend yield of 9.92cps, which corresponds to a gross yield of:

9.92c/0.7 = 14.17c

Assuming an 8% gross yield over the business cycle is acceptable this implies a share price of :

14.17/0.08 = $1.77



OK, the above is my valuation. TUA is currently my second largest holding on the NZX. The 7c dividend is imminent so that pushes my market fair valuation up to $1.84. When the price hit that level I took the opportunity to sell down the cream off my holding today.

Don't panic fellow shareholders. I have no plans to leave the TUA ship! But holding a large sum (for me) in what is a low liquidity share always makes me nervous. I have created an extra investment rule for myself where I put a cap on the amount of money I am prepared to put into a share that is outside the NZX50. TUA went over that cap which was the reason for my orderly sell down. That and releasing some capital so that I can participate in those upcoming SOE floats!

Average purchase price for my remaining TUA shares (which is the vast majority of them) is now $1.33.

I am fairly sure that by Christmas my TUA sell down will look premature. But then the car market is fickle. Best to sell into strength with these low liquidity shares.

SNOOPY

KJ
04-09-2012, 03:35 PM
I sold some today too-just a good chance to make a dollar.Feel it may come back a bit once it goes ex
KJ

voltage
04-09-2012, 04:44 PM
SNOOPY, have you found a better place to put the money?

percy
04-09-2012, 06:01 PM
OK, the above is my valuation. TUA is currently my second largest holding on the NZX. The 7c dividend is imminent so that pushes my market fair valuation up to $1.84. When the price hit that level I took the opportunity to sell down the cream off my holding today.

Don't panic fellow shareholders. I have no plans to leave the TUA ship! But holding a large sum (for me) in what is a low liquidity share always makes me nervous. I have created an extra investment rule for myself where I put a cap on the amount of money I am prepared to put into a share that is outside the NZX50. TUA went over that cap which was the reason for my orderly sell down. That and releasing some capital so that I can participate in those upcoming SOE floats!

Average purchase price for my remaining TUA shares (which is the vast majority of them) is now $1.33.

I am fairly sure that by Christmas my TUA sell down will look premature. But then the car market is fickle. Best to sell into strength with these low liquidity shares.

SNOOPY

Very good points you make.
My two largest holdings EBO and RYM are hitting new highs.Other holdings POT,TUA and SKL are doing the same.
Everytime I have sold any EBO during the last 15 to 20 years the SP then continues to rise.Good companies seem to keep exceeding my valuations,which makes me scared to sell.

voltage
04-09-2012, 06:28 PM
percy, interesting comments, rising stocks keep rising, sinking stocks continue to sink, the trend is your friend. I have wanted to add EBO and POT but unable to find an entry point, the stocks keep rising.

macduffy
04-09-2012, 07:29 PM
I gave up selling my best stocks when they reached my "valuation", found I was keeping the lesser performers! These days I try to hold on to them until the uptrend ends - not always easy but who am I to argue with Mr Market?

:)

Disc: Also hold EBO,RYM,TUA,SKL - and others not so well performed.

percy
04-09-2012, 08:04 PM
Voltage and Macduffy.
Thank you for your comments.
Lesser performers I try to get rid of when ever I "spring clean" or need funds for a new investment.Often it is reading something in an announcement I don't like,so I sell straight away.Funny how good investments come to you when you are sitting on cash.!!!

voltage
05-09-2012, 06:08 AM
percy POT interesting unlikely to keep gains from POA

percy
05-09-2012, 06:52 AM
percy POT interesting unlikely to keep gains from POA

That's what makes trying to figure out a "fair" valuation for them so difficult.They are NZ's hub port,No.1 export port but could again loose the very profitable import business back to POA.But reading POTs annual reports you realise they are NZ's best run port.I brought at $7.29.Scared to sell with view to buy back in.

Snoopy
05-09-2012, 03:14 PM
TUA presentation to the NZ shareholders association released today

http://companyresearch.nzx.com/announcements/attachments/162843

SNOOPY

Snoopy
05-09-2012, 03:18 PM
SNOOPY, have you found a better place to put the money?


At $1.84 TUA is on a gross yield of 10%. Very difficult to match, but I think Telecom might just do it.

SNOOPY

discl: hold TEL, TUA

Snoopy
05-09-2012, 03:27 PM
TUA presentation to the NZ shareholders association released today

http://companyresearch.nzx.com/announcements/attachments/162843



I thought this presentation a little bearish. 'Trader to public' sales are tracking steadily downwards since 2005 (p12 of presentation). That is at odds with the increase in new vehicle sales (p13), and you would think ultimately the two should correlate. Perhaps what we are seeing is a 'baby boom' of new cars that will filter down to TUA down the track? TUA says that 'three waves of imported car restrictions' have constrained the used market. I guess the improving profitability at TUA must reflect market share growth?

There are hints of TUA increasing their online presence (p17) to further leverage off their physical presence. Looks like TradeMe has not finished TUA off after all.

SNOOPY

janner
05-09-2012, 09:23 PM
Snoopy.

New cars when traded in usually go through the Dealer System.. Then the next trade maybe into TUA..

5 to 8 years away..

percy
07-09-2012, 04:48 PM
Nice to see the buyers at $1.90 and $1.92.

percy
31-10-2012, 09:20 AM
Nice to see the buyers at $1.90 and $1.92.

One seller at $2.00 with 5,000 shares.
On buy side; 1,000 at $1.91
7,000 @ $ 1.90
5368 @ $1.87
3,100 @ $1.85
10,000 @$1.82
8,762 @ $1.80
26,355 @ $1.79
and more..

Jay
31-10-2012, 10:33 AM
What I still have not got the hang of is determing the the likelihood of which way the price will move based on the above.
From my limited experience, when you think the price difference between buy and sell is too much it happens anyway in some cases.
I know we do not get to see every trade as there are match ups within the same broker or ones that go on and are bought/sold immediately.
Fom the above I would suspect that the price would not change. However we cannot see what type of buys/sells are there - such as buy up to X price etc.
If someone could explain so a 5 year old would understand, I may make some progress:) - hence I do not reply on depth too much

percy
31-10-2012, 11:11 AM
What I still have not got the hang of is determing the the likelihood of which way the price will move based on the above.
From my limited experience, when you think the price difference between buy and sell is too much it happens anyway in some cases.
I know we do not get to see every trade as there are match ups within the same broker or ones that go on and are bought/sold immediately.
Fom the above I would suspect that the price would not change. However we cannot see what type of buys/sells are there - such as buy up to X price etc.
If someone could explain so a 5 year old would understand, I may make some progress:) - hence I do not reply on depth too much

Jay, I guess I look at supply vs demand.Would appear to me there is a far greater demand than supply with TUA,so I would expect the SP to rise.
Well that did n't take long to be proved wrong!!!.6000 gone through at $1.91 and $1,90.seller still ther at $2.00 with 5,000 shares.

Jay
31-10-2012, 11:50 AM
Well that did n't take long to be proved wrong!!!.6000 gone through at $1.91 and $1,90.seller still ther at $2.00 with 5,000 shares.

Exactly what I mean,
yes i do look at the overall demand/supply

percy
31-10-2012, 02:24 PM
I watch depth closely.Should I be selling and I note few buyers then I know I can't muck around,either meet the buyer or don't sell.
Should I be buying and I note a lot of sellers I will often put in a bid below first or second buyers.
If I really want a stock and only a small seller I will often take that seller out.
TUA has gone from a large number of buyers/few sellers, to a few buyers/number of sellers, back to large number of buyers/few sellers in about a month.
I noted this morning there were buyers reappearing for AWF,after sellers have stopped.See a positive announcement this afternoon.You may say "no surprises there."!!! lol
More buyers at TUA. 2,575 @ $1.91 and 16,675 @ $1.90.

tim23
31-10-2012, 06:59 PM
But a lot of sellers only hit the queue at market price so aren't visible as such.

percy
31-10-2012, 07:19 PM
But a lot of sellers only hit the queue at market price so aren't visible as such.

As do buyers>>!!!!!!!!!!!!!!!!!!!!!!!!!! lol.
A lot of "invisibles"trading on stock exchanges.!!!!!

percy
17-01-2013, 10:05 AM
As it is above the top of their guidance I am please they announced it.

Snoopy
17-01-2013, 02:57 PM
Time for an update. TUA has announced to the market this morning that it is lifting its FY 2012 earnings estimate from $3.8 - $4.1M to $4.2M following a strong trading performance over the last three months. I'm not at all surprised by this morning's announcement as it comes on the back of near record new car sales in New Zealand last year. Would be nice if they increased the divie as a result. The share price remains ~5- 10% undervalued too in my view.




As Janner said in post 142:
"New cars when traded in usually go through the Dealer System.. Then the next trade maybe into TUA..
5 to 8 years away."

So today's profit upgrade could be just the start, with 5-8 years of growth down the track? In my view it is the market share gains that are pushing this profit upgrade for TUA.

I believe your expectation of a slightly higher (normal) divie will be met David B!

SNOOPY

discl: TUA shareholder

Corporate
18-01-2013, 07:22 AM
Hey guys

I have only recently had a look into Turners, quite late by the looks of things but none-the-less it is an interesting investment proposition.

I am just wondering if anyone has any throughts around why Turners hold so much cash. For the last 3.5 years, cash on had has average around $14m. From my calculation the working capital requirements are very modest:

JH2009 DH2009 JH2010 DH2010 JH2011 DH2011 JH2012
(503) 2,021 167 (383) (358) 529 (550)

And over the the same period they have paid dividends of $13.9m out of free cash flow of $15.8m, or 88% payout. FCF includes modest capital expenditure of $5.3m during this time.

Cheers,

C

Snoopy
18-01-2013, 12:50 PM
I am just wondering if anyone has any throughts around why Turners hold so much cash. For the last 3.5 years, cash on had has average around $14m. From my calculation the working capital requirements are very modest:

JH2009 DH2009 JH2010 DH2010 JH2011 DH2011 JH2012
(503) 2,021 167 (383) (358) 529 (550)

And over the the same period they have paid dividends of $13.9m out of free cash flow of $15.8m, or 88% payout. FCF includes modest capital expenditure of $5.3m during this time.


Good question Corporate. I will give you my 'investors hat' answer.

TUA is a cash business. Purchasers pay for cars at auction by cash, and TUA are quick to flick that money onto the seller (less charges of course) in cash. TUA have also changed the focus of 'Turner's Fleet' away from bringing in cars from Japan and more towards buying cars from the public. They pay the public for the cars they hold in stock in cash. So taking a superficial all encompassing view of TUA, it does make sense to hold a certain amount of cash resources.

Now to be a bit more specific. If we look at the June 2012 half year report, you can see that the current trade and other payables at $12.6m substantially exceed the trade and other receivables of $5.2m. That difference IMO, should come off the net cash position of the company.

So $13.1m - $7.4m= $5.7m

In addition immediately subsequent to balance date the directors declared an interim dividend of 7cps which works out at $1.9m by my calcs. So the cash pile reduces to $3.8m.

TUA still does buy some cars ex-Japan. Those car transporter ships from Japan are very large, so it is not hard to imagine a sudden bill of a few million dollars once one of those ships lands with stock.

All in all, while the 'cash pile' at TUA may appear high, I think there are reasons for that, such as I have outlined above.

SNOOPY

discl: TUA shareholder

Corporate
18-01-2013, 01:41 PM
Thanks Snoopy, much appreciated.

I wish TUA was a little more liquid!

BIRMANBOY
18-01-2013, 08:51 PM
More buyers than sellers...so liquidity or lack of has to be stimulated by buyers raising their buy prices. Liquidity is quite often function of buyers and sellers being not too far away from eachother.
Thanks Snoopy, much appreciated.

I wish TUA was a little more liquid!

percy
12-02-2013, 11:22 AM
Great result as expected.Increased divie.No special divie as they are holding back cash for possible expansion.Interesting?
Good to see them using credit/finance to grow both sales and future profits.

Snoopy
13-02-2013, 12:59 PM
Great result as expected.Increased divie. No special divie as they are holding back cash for possible expansion.Interesting?


The highlight for me was the fall in inventory, as highlighted under 'Cash Assets'. From $6.9m worth to $4.9m worth is quite a drop. This was explained largely by the success of the 'Buy Now' program of acquiring more stock from local sellers rather than importing those vehicles from Japan. Buying locally is more efficient as there is no capital tied up while the cars are 'on the water'.

TUA are being coy on their new investments for possible expansion. But one hint is the increased business they are doing in Nelson through partnering through a local operator. More of that, maybe in other smaller regional markets, would be good.

The $2m drop in stock has become money available for a special payout for shareholders. If TUA management can reinvest this money wisely in the local market, then I for one would rather they hung onto it.



Good to see them using credit/finance to grow both sales and future profits.


Yes, the growth of the loan book by 10% is very positive.

SNOOPY

macduffy
01-03-2013, 01:01 PM
Death? Serious illness? I'd be phoning up if I was a shareholder...

Well, I think you'd be wasting your time. Whatever the reason, the CEO " leaving the company's employ" would be seen to be a price-sensitive event with any elaboration the subject of an official announcement.

forest
01-03-2013, 01:56 PM
Death? Serious illness? I'd be phoning up if I was a shareholder...

Just tried to call them, they are not picking up the phone!!! ??? Whats going on???

percy
01-03-2013, 02:06 PM
There was a fair bit of naughtiness a few years ago so hope it is not a repeat of this,
Back of mind is the cash held back for an acquisition,Often disagreements happen when CEO wants to buy something and the board don't.
As a shareholder I will wait and see.
Must admit one CEO goes and gets replaced,often by someone better.

Snoopy
01-03-2013, 02:53 PM
There was a fair bit of naughtiness a few years ago so hope it is not a repeat of this,
Back of mind is the cash held back for an acquisition,Often disagreements happen when CEO wants to buy something and the board don't.
As a shareholder I will wait and see.
Must admit one CEO goes and gets replaced,often by someone better.


Well "All Ears" will be pleased at least - anyone else remember him? I owe a great credit to "All Ears" when he brought TUA to my attention six years ago, even as he was exhorting everyone to sell. I think his nickname for Roberts was "The Robber", even though I believe this was in relation to what was happening to the market value of the company, and nothing to do with the uncovered behind the desk impropriety of another departed executive.

One of Buffet's quips I remember is: "Always buy into a company that any idiot could run, because sooner or later that is exactly who will be in the drivers seat."

Now, I wouldn't want to cast any aspersions on Roberts or indeed his unannounced successor. But I can't say I am too worried by whoever gets to steer this ship on its next phase.

SNOOPY

discl: TUA holder

percy
07-03-2013, 07:57 AM
This is most unhelpful for TUA.

https://www.nzx.com/companies/TUA/announcements/233883



15% of their profit up in smoke. I wonder if this was a reason for the CEO departing? Otherwise their yoy NPAT is good.

What one may call "a black swann" event.!!!!

macduffy
07-03-2013, 08:13 AM
I wonder who IAG will turn to to dispose of their damaged vehicles? Are there other players in this business or do IAG have or are planning in-house operations? Or is it a tactic to make a better deal with TUA ?

percy
07-03-2013, 09:05 AM
Yes. It may well have been unexpected. It is not a one off problem like, say Heartland having excessive costs in gaining their banking license. Losing 15% of one's profit overnight and for the future is seriously demoralising. Jobs might yet have to go as well.

The problem I see it is this. All other suppliers will now realise TUA is vulnerable. They will be keen to "sharpen pencils" at the first opportunity they can. TUA will be feeling the pinch and may have to lower its margin to keep business. That corporate level business is supposed to be the predictable bread and butter that enables TUA to ride through cyclical dips and unusual periods.

Someone should really lose their job over permitting 15% of the NPAT to disappear overnight. Maybe that's why the CEO left?

I would think that is why CEO left.
Should IAG not take it in house, it certainly gives who ever gets it a good start.Hope it is not the ex CEO.!!!
Buyer for 2,000 at $1.65.!!!!!!

KJ
07-03-2013, 09:17 AM
lol, even I'm not risk-loving enough to touch that stock! I think a huge dose of reality needs to enter the market otherwise it's out for me...

Do you think it's that bad a coy ?

BIRMANBOY
07-03-2013, 09:39 AM
Does look a little "suspicious" doesnt it. A mole at the top? Will cause some temporary angst no doubt among the punters but buying opps ahead.
I would think that is why CEO left.
Should IAG not take it in house, it certainly gives who ever gets it a good start.Hope it is not the ex CEO.!!!
Buyer for 2,000 at $1.65.!!!!!!

BIRMANBOY
07-03-2013, 09:47 AM
How can it be overpriced when you look at the yield it is returning? May be "overpriced" in the sense of cap gain possibilities. Depends whether you are a trader or an investor. If you were "a smart minded trader" you might make money on it by shorting it and if you were a "smart minded investor" you will make money in the divies and buying in the dips.
No, it's not a bad company at all, the market has just severely overpriced it and made it unavailable to be properly invested for the smart minded of us. If you want to see my views (which are ever changing) the head over to the Snakk thread, don't want to hijack this one.

KJ
07-03-2013, 09:48 AM
Is it severely overpriced? PE 13-Div yield 7.5% excluding spec div which it regularly pays.

Snoopy
07-03-2013, 11:16 AM
Is it severely overpriced? PE 13-Div yield 7.5% excluding spec div which it regularly pays.


The loss of 15% of current net profits is unwelcome. But I see it as a pause in the profit growth path. Whether "The Robber" has indeed peeled off part of the business to make his own will be an interesting sideline story. But Turners still sell far more complete cars than wrecks. The finance division is growing. And there is still that previously referred to 'new business opportunity' they are investigating.

I have to admit that I was considering selling down some of my TUA holding before this announcement to lock in some profits. But the dividend yield was just so far ahead of bank interest rates I quickly dropped that idea. Net profit drops 15% and the share price drops 15%. The yield picture remains the same and more future growth is to come. I am hanging onto my TUA shares!

SNOOPY

POSSUM THE CAT
07-03-2013, 11:23 AM
Sparky the Clown No use keeping this business if it is not profitable to do so'

POSSUM THE CAT
07-03-2013, 12:25 PM
Sparky The Clown but at the new deal it probably would not be. Because it was 15% before it might have been 2% or less at the new deal. No business keeps business for the sake of it.

BIRMANBOY
07-03-2013, 01:35 PM
It never has been particularly liquid but this will probably shake out a few of the uncommitted and fence straddlers..lowest seller ATM is 1.95 highest buyer 1.76. Waiting to buy if drops down a bit more...1.60 would be nice. (but doubtful). There really hasnt been any buying opportunities for a long time.
As far as I can see its an excellent company. The share price is going to be slapped around a bit until TUA get a new CEO on board and show how they will increase revenue/NPAT. Could be in an illiquid doldrum until then.

percy
04-04-2013, 05:19 PM
Well today's announcement that DPC Dorchester Pacific Ltd are to buy Milford Asset Management's 18.2% of TUA for $1.82 cents per share ex div caught me by surprise.
I can see it is good for DPC, but fail to see what benefit it is to TUA as they have enough cash to grow the finance/insurance side themselves.

tim23
04-04-2013, 05:27 PM
Good for Milford GPG sold them the holding at about $1.20 when share prices was $1.40+

percy
04-04-2013, 05:29 PM
Good for Milford GPG sold them the holding at about $1.20 when share prices was $1.40+

Yes very good for Milford.

percy
04-04-2013, 06:06 PM
Yes, you bet me to it Percy. I'm sure Milford can find a better investment than a company without a CEO and with threats to their revenue base.

To think I thought it was you who was the BIG buyer over the last couple of days.!!!! lol.
My brother-in-law brought a very good 2nd hand van at Turners a couple of days ago.Good value [Jap import].Thought Turners were good to deal with.
I see it as a good business.New man,new ideas.Strong brand,good name,strong balance sheet,good people.With car sales well up,and Turners using finance to drive sales and continueing profits,lost profit may soon be recovered.Also there was the interesting teaser about an acquisition,although Milford would have been aware of this with Gaynor as a director.The next year should be "interesting".

Snoopy
05-04-2013, 10:11 AM
The Dorchester buy-in may herald a closer insurance/finance tie-up with Turners, beneficial for both companies.


A close inspection of the TUA FY2012 accounts reveals that Turners earns more from financing vehicles than bringing their own cars in and selling them from Japan! Of course both of these activities are still minnows compared to the core auction business.

But it does highlight the potential of motor vehicle finance, a field that I understand Dorchester is already a heavy participant in! I wonder what would happen to the share price if TUA simply changed their name from 'Turners Auctions' to 'Turners Auctions and Finance'? I suspect most casual share market observers don't understand the potential of the existing vehicle finance business within Turners!

SNOOPY

BIRMANBOY
10-04-2013, 05:01 PM
It may be Autumn but there is a spring in the Birmans step today.. Dividend in and last two have provided an annual gross dividend yield of 15.6%. Apologies to Messrs Gilbert and Sullivan
The cars that sell in the spring,
Tra la,
Breathe promise of merry sunshine -
As we merrily dance and we sing,
tua la,
We welcome the hope that they bring,
Tua la.
Of a summer of roses and wine.
And that's what we mean when we say TUA shares
are welcome as flowers that bloom in the spring.
Tra la la la la la, etc.
ALL. Tra la la la, etc.
KO. The finance that gets paid on the cars,
Tra la,
Having lots to do with the case.
I've got to take under my wing, Tra la,
A most delectible old thing,
Tra la,
With a caricature of a face,
And that's what I mean when I say, or I sing,
'Oh, thanks for Turners that bloom in the spring.'
Tra la la la la la, etc.
ALL. Tra la la la, Tra la la la, etc.

percy
10-04-2013, 06:20 PM
I am singing the chorus Tr la la la la too.!!!!!!!!!!!! lol.
Nice.

BIRMANBOY
10-04-2013, 08:25 PM
Curse you .I'll be humming that all night. A classic...Isnt internet wonderfull. How else would we find these gems.
I see your tralalalala and raise you a trololololo


http://www.youtube.com/watch?v=oavMtUWDBTM

BIRMANBOY
30-04-2013, 04:41 PM
Well done Simon Gould-Thorpe....CIO at TUA. Putting his money where it it is obviously going to be rewarded. Purchased 3000 shares at 1.75. Makes me feel all warm and cosy seeing employees investing in their own company. Such a good sign.

Snoopy
17-07-2013, 01:59 PM
However, the departure of the CEO hard on the heels of them losing the IAG contract does worry me.


News today on the retention of another contract

-------------

GENERAL: TUA: Turners Auctions renews partnership with LeasePlan

Turners Auctions today confirmed the renewal of a long standing agreement with vehicle leasing company LeasePlan New Zealand with both companies re-signing for a period of two years.

Turners' CEO Todd Hunter says he is delighted to have reached an agreement in what has been a highly competitive process.

"We are thrilled to build on our existing relationship and renew our contract for the next two years with LeasePlan. Our long standing association is extremely important to us and we have formed a strong working relationship over the years. As LeasePlan's primary reseller of leased vehicles we have worked hard to integrate our processes and provide bespoke solutions to best meet LeasePlan's needs. This agreement is a significant win for Turners Auctions."

Managing Director of LeasePlan New Zealand, Charles Willmer, says that the capabilities that Turners Auctions bring to the partnership are important to the on-going success of LeasePlan.

"LeasePlan have chosen Turners Auctions first and foremost because of their ability to deliver results for us and our clients. Their willingness and ability to innovate in line with our requirements delivers benefits for our clients and business. Turners provide us with a tailored approach, selling our vehicles via multiple channels depending on specific customer needs. Turners have worked hard to on their technology platform to deliver us more than just traditional remarketing services.

We are delighted to be renewing our partnership with Turners and we look forward to continuing our productive relationship over the next two years", says Willmer.

LeasePlan is one of New Zealand's largest vehicle leasing companies, managing more than 17,000 vehicles across a broad range of clients. The strength of the relationship with Turners Auctions is built on the promise that LeasePlan will secure the best price for the sale of all their vehicles, as most of the proceeds go back to clients and their shareholders.

--------

Reading between the lines about the competitive tender process and the rather short agreement period of only two years, suggests to me that Turner's may have had to rip a sleeve off their shirt to retain this contract, which I suppose is OK as long as they retain enough shirt to cover their back. Still it hasn't brought any big sellers out in the market, but perhaps everyone is just hanging on for their 6 monthly dividend?

SNOOPY

Snoopy
31-07-2013, 04:02 PM
News today on the retention of another contract

-------------

GENERAL: TUA: Turners Auctions renews partnership with LeasePlan
<snip>

--------

Reading between the lines about the competitive tender process and the rather short agreement period of only two years, suggests to me that Turner's may have had to rip a sleeve off their shirt to retain this contract, which I suppose is OK as long as they retain enough shirt to cover their back. Still it hasn't brought any big sellers out in the market, but perhaps everyone is just hanging on for their 6 monthly dividend?



Another contract in the bag, this time from Transfield.

GENERAL: TUA: Turners Auctions announces agreement with Transfield

Turners Auctions signs three year deal with multi-national Transfield Services

Operations, maintenance and construction services company Transfield Services have signed a new multi-faceted deal with Turners Auctions. The three year contract will see Turners provide a wide range of disposal services for Transfield Services, both on and off site. The agreement is also the second commercial deal announced by Turners Auctions in July.

Turners will manage all disposals for Transfield Services including vehicles, machinery, mobile plant and general goods and will also facilitate all on-site and excess stock disposals in order to maximise the value of Transfield Services' assets.

Michael Bourke, Group General Manager Assets at Transfield Services says strong and effective partnerships are essential to the success of his company.

The complexity of Transfield Services' operations requires a high level of competency from our partners. Turner's ability to offer complete transparency and accuracy of reporting and direct and live communication was a major factor to this deal. We are delighted to have forged this new agreement as we
strive to achieve maximum efficiencies for our operations."
"We hope this is the first step to a long and productive relationship", says Mr Bourke.

Turners' Interim CEO Todd Hunter says the exclusive agreement was built on the ability of Turners to deliver a range of complementary services for Transfield Services.

"We are delighted to have signed this deal with such a well-respected company. Transfield Services offer a wide range of diverse services to their customers and it has been our ability to understand and deliver to their requirements that has been key to this new partnership. The agreement is a significant opportunity for Turners in a highly competitive market. We look forward to forging a strong and close relationship over the coming years."

Transfield Services operate a global business in the resources, energy,industrial, infrastructure, property and defence sectors and employs more than 24,000 people across 20 industries and 11 countries. Turners Auctions will play a vital role in Transfield Services' goal to deliver continuous improvements in asset performance and sustain long term relationships with our clients and partners.

Turners will begin the partnership with a Transfield Services Clearance Auction this Wednesday 31 July, 10am at the Wellington Branch of Turners Auctions. On sale will be a wide range of commercial vehicles and machinery.

For more information, visit www.turners.co.nz/transfield.

-------

SNOOPY

Snoopy
31-07-2013, 04:11 PM
-----

31/07/2013 14:34 OFFICE

REL: 1434 HRS Turners Auctions Limited

OFFICE: TUA: Notification of appointment of Chief Executive Officer

The Directors of Turners Auctions wish to announce that, following a robust recruitment process, they have appointed Todd Hunter to the position of Chief Executive Officer, effective immediately.

Mr Hunter has held senior executive positions within the company over the last seven years and has been interim CEO for the last five months.

--------

SNOOPY

percy
16-08-2013, 06:36 AM
The half year result shows just how well performing, and important the finance division is.Turners Finance operating profit increasing 28% to $907,000.

RTM
16-08-2013, 08:56 AM
So another finance company doing well. Following of from good result for ASB this week.
Can only be good news for Heartland !

macduffy
16-08-2013, 01:28 PM
So another finance company doing well. Following of from good result for ASB this week.
Can only be good news for Heartland !

That Hearland virus seems to infect a lot of other threads.

:rolleyes:

Just kidding!

But I do hold a few TUA and it's good to see them compensating for the loss of the IAG damaged vehicles business.

:)

percy
16-08-2013, 03:49 PM
That Hearland virus seems to infect a lot of other threads.

:rolleyes:

Just kidding!

But I do hold a few TUA and it's good to see them compensating for the loss of the IAG damaged vehicles business.

:)

A very friendly, healthy, wealth creating virus shared by a lot of astute share trader investors.! lol.
Yes I agree it is good seeing TUA growing other revenue streams.

biker
16-08-2013, 06:59 PM
All good for DPC who will no doubt have further plans for TUA

Snoopy
09-09-2013, 02:59 PM
All good for DPC who will no doubt have further plans for TUA


Today I wanted to look at TUA in a slightly different way. Many think of TUA as an auction company with an in house car sales division (called Fleet in the segmented results) and finance division attached. I am going to suggest that TUA is really a finance company with a car sales division attached.

My reason for stating 'TUA is a finance company' is that if you look at the operating segments, note 4 of the annual report, you will see that the operating profit on finance exceeded the profit on in house car sales, despite the in house car sales turnover being seven times higher. IOW financing cars is a lot more profitable than selling them. Of course Dorchester the 20% shareholder in TUA are also large in the car finance market. So I think it is a good guess that financing cars is set to become an even larger part of TUAs future than it has been in the past. But why do I claim that TUA is NZs best finance company? For that you must read on!

SNOOPY

Snoopy
09-09-2013, 03:06 PM
But why do I claim that TUA is NZs best finance company? For that you must read on!


Looking at the finance segment of TUA only, as listed in note 4A of the Annual Report;

EBIT / (Interest Expense) = $1.395m / $1.837m = 0.7594 < 1.2

=> FAIL TEST

Hmmm, so not really a good start for my claim that TUA is NZs best finance company! But I intend to come back to this result later.

SNOOPY

Snoopy
09-09-2013, 03:18 PM
But why do I claim that TUA is NZs best finance company? For that you must read on!


In this context I am looking at the liquidity or lack of such that exists when comparing assets otherwise known as 'finance receivables' (car loans) due to come off the books in the next twelve months with the underlying borrowings used to support them. Current receivables are $9.407m (AR2012 Note 11)

The group borrows to support finance receivables over 12 months at fixed rates (AR2012 p21). Current finance borrowings are $9.503m (note 19). These finance borrowings (finance payables) are secured by a chattel security over finance company's motor vehicles and by a general security over the assets of Turners Finance Limited. (AR2012 p41)

Simple maths will tell you that current receivables are slightly less than current borrowings. To level the scales TUA has ring fenced $0.837m out of a current cash balance of $13.941m plus $234k of 'other receivables' as extra security.

As far as the finance division is concerned, the current assets to current liabilities is:

($9.407m + $0.837m + $0.234m) / $9.503m = 110%

110% is the target figure, so this test counts as a PASS

SNOOPY

macduffy
09-09-2013, 03:20 PM
I'm reading on with much interest, Snoopy!

One small point though. I would think that TUA's finance company operation would wither and die without the car auction/sales arm feeding business to it. So still essentially an auction house I reckon but I take your point on the importance of the finance business to the company.

Cheers

percy
09-09-2013, 03:26 PM
I brought some for the wife on 17/3/2008 at $1.02 as I thought TUA was a strong brand that used car buyers would trust.I was at the time impressed they were starting to finance car deals without coming back to shareholders for funds.A good case of a well focused company realising there was a place for them in internet led business and altering the company to suit THE CUSTOMER .

Posted 23/04/2010.
They had finally woken up to finance their own finance deals.

Snoopy
09-09-2013, 03:36 PM
But why do I claim that TUA is NZs best finance company? For that you must read on!


Note 4Ciiiof AR2012 spells out that segment assets and liabilities are not reported to the board. Consequentially segment assets and liabilities are not included in the segmented reporting information either. I guess a purist might argue that the board should allocate some assets and liabilities to their respective divisions so that we can better assess divisional efficiency.

TUA has had a policy of many years of carrying no term debt, except for term debt associated with specific vehicle loans made to customers. So that leaves TUA in such a strong position overall, that the idea of carving out some of that non existent parent debt and allocating some of their non risk tangible assets to the finance division would be a somewhat arbitrary and somewhat nonsensical exercise. And if by some chance the finance division as a stand alone unit did get into trouble, the parent company could easily fix things by exporting any unwieldy debt back up to the parent company

If I work out the underlying gearing ratio of the parent company you will see what I mean:

Total Non Risk Sharing Liabilities/ Total Non Risk tangible Assets

=[($19.599m - $9.503m) + ($12.302m - $11.949m) ] / ($17.858m - $1.770m ) = 0.65 < 0.9

=> More than OK

SNOOPY

percy
09-09-2013, 03:48 PM
Most people need their car to get to work,to earn a wage.
So they pay their vehicle instalments,before they pay their mortgage.
Safer than houses.!!!

Snoopy
09-09-2013, 03:54 PM
But why do I claim that TUA is NZs best finance company? For that you must read on!


Ok, I know that used motor vehicles are not the best things to have on the books as 'assets'. So in general a company will be required to hold more of its own capital to take account of somewhat diminished sale price that might be realised should any of these vehicles need to be taken back 'in house' (sounds much better than saying repossessed don't you think!). Assuming all loans are Tier 2 (with apologies for my loose language to Paper Tiger) the amount of capital that TUA needs to have on the books to fulfill this test is as follows:

0.3($9.407m + $11.830m + $0.127m) = $6.409m

Note: The $0.127m is the impairment allowance listed in note 11 that is still on the books. Finance assets are taken from the balance sheet.

Actual tangible assets on the books are: $17.858m - $1.770m= $16.088m

That covers the minimum capital needed for this test about two and one half times.

=> A very strong PASS

SNOOPY

Snoopy
09-09-2013, 04:07 PM
That covers the minimum capital needed for this test about two and one half times.

=> A very strong PASS


TUA Finance shows up very well with the amount of capital behind the company relative to the loans provided. What is more the underlying gearing ratio is very conservative. Moreover, there is enough liquidity on the books should some of those finance repayments become a bit slow.

What is not so good is the EBIT to Interest Expense ratio, which fails my test. However I would argue that offsetting all of the company's bank debt against the finance division only is a management decision.

If management wanted, they could transfer all of this debt to the parent company and the finance division would then pass the EBIT to Interest Expense ratio test in spectacular fashion! If the parent company also carried a lot of debt then I would be worried. But the parent company carries no term debt outside of the finance division. My argument then is that taking an overall company perspective management could easily make TUA finance pass my test with some behind the scenes bookwork. I think this is enough to turn my superficial fail grade into a pass mark for TUA finance.

I have looked at a few finance institutions in NZ now, and to my mind there isn't another that stacks up better than TUA.

SNOOPY

Snoopy
09-09-2013, 04:16 PM
One small point though. I would think that TUA's finance company operation would wither and die without the car auction/sales arm feeding business to it. So still essentially an auction house I reckon but I take your point on the importance of the finance business to the company.


Macduffy, you make a good point here. Turners segment their operating divisions into three: Auctions, Fleet and Finance. But in reality there is quite a a lot of interdependence between these three divisions.

For example, the Auction business (selling cars on behalf of others) is combined with the Fleet business (Turner's own car imports) to a large extent. Turners often put their own (Fleet) cars through the otherwise third party auctions. And yes I agree that the finance arm does rely on the auction side of the business to feed it.

The point of may analysis is not to show that the finance division could stand on its own, which I agree would be a tough ask. My point is that if you make more money by financing a car than selling it, is it not more correct to think of TUA as a finance company with a car selling arm, rather than the other way around?

SNOOPY

Snoopy
09-09-2013, 04:20 PM
Most people need their car to get to work,to earn a wage.
So they pay their vehicle instalments,before they pay their mortgage.
Safer than houses.!!!


I would hope most homeowners would put their car on their mortgage Percy. It is likely they would pay less interest overall if they could do that. Of course there are people who don't have sufficient equity in their house and need a stand alone car loan.

No doubt your wife is very pleased you had sufficient foresight to pick up some TUA shares at only $1.02!

SNOOPY

percy
09-09-2013, 05:15 PM
I think you are best to ask Turners about vehicle finance.
Yes most homeowners would be better off putting their car on their mortgage.But do they? Turners could tell you.
Others would be better off not buying a car until they have saved for it.! Then our divie would be less.
Wife is happy with TUA's divie [and her HNZ divies].She likes divies.!

Corporate
11-09-2013, 01:38 AM
Good posts guys. I like turners a lot, my only hesitation is the lack of liquidity!

percy
11-09-2013, 06:07 AM
Good posts guys. I like turners a lot, my only hesitation is the lack of liquidity!

Liquidity can be a major concern with stocks like TUA ,ABA,and AWF [and others].Not long ago EBO also lacked liquidity.
Yet the rewards can/are excellent.I think one is best not to have too much in any one of them.

Snoopy
11-09-2013, 05:57 PM
Good posts guys. I like turners a lot, my only hesitation is the lack of liquidity!


Corporate, I hold too many TUA shares to ever get out easily. It bothered me for a while. But you have to weigh up the likelihood of being stuck with the chances you will need to get out. TUA is a stable kind of business and a virtual monopoly outside of Auckland. They have tried and failed at expanding overseas. I believe their current focus is to be as good as they can at home now. To top this off the dividend return is excellent. So although I would have difficulty pulling most of my capital out, I am sucking out a decent cash pile annually anyway, by way of the dividend. In this way I am very comfortable with my 'overweight' TUA holding.

SNOOPY

BIRMANBOY
12-09-2013, 10:27 AM
Hah...you may be "overweight" but to me its all looking very muscular!!
Corporate, I hold too many TUA shares to ever get out easily. It bothered me for a while. But you have to weigh up the likelihood of being stuck with the chances you will need to get out. TUA is a stable kind of business and a virtual monopoly outside of Auckland. They have tried and failed at expanding overseas. I believe their current focus is to be as good as they can at home now. To top this off the dividend return is excellent. So although I would have difficulty pulling most of my capital out, I am sucking out a decent cash pile annually anyway, by way of the dividend. In this way I am very comfortable with my 'overweight' TUA holding.

SNOOPY

Snoopy
23-09-2013, 02:14 PM
This is most unhelpful for TUA.

https://www.nzx.com/companies/TUA/announcements/233883


"Turners Auctions has been informed that its contract to sell damaged vehicles on behalf of the IAG group of companies will not be renewed. The contract, which generates in excess of 15% of Turners Auctions net profit, will finish within the next few months and will have a negative impact on the company's earnings for the second half of the December 2013 year and beyond."

"Meanwhile the current year has started on a strong note with net profit for the first two months (January & February) more than 11% above the same period in the previous year.
15% of their profit up in smoke. I wonder if this was a reason for the CEO departing? Otherwise their yoy NPAT is good."


Following the above 'bad' announcement, Turners are not shy about holding onto their other contracts. It is not clear that TUA will gain anything out of the announcement below, although the ten and fifteen year renewal periods are a big vote of confidence.

-----

TUA
23/09/2013 09:24
GENERAL

REL: 0924 HRS Turners Auctions Limited

GENERAL: TUA: Turners Auctions renews partnership with Vero and AA

Turners Auctions has renewed its partnership with Vero Insurance and AA Insurance to manage the sale of all damaged vehicles, trucks, mobile plant, machinery and general property. Turners has partnered with Vero and AA Insurance for 10 and 15 years respectively.

Vero, a member of the Suncorp Group, is New Zealand's second largest general insurance company. AA Insurance is owned through a joint venture between Vero and the New Zealand Automobile Association. Combined, AA Insurance and Vero Insurance are among the largest suppliers of damaged vehicles for sale in the country.

Gary Dransfield, Chief Executive of Vero New Zealand, says Vero is pleased to continue the longstanding and productive partnership they've enjoyed with Turners for the past decade.

"Turners has consistently delivered for our business, and the team's experience in managing a varied line of products means we can rely on them to manage the entire process, end to end. Turners offers value not only through built-in efficiencies, but also by constantly delivering process innovations and new ways to streamline the way we work."

Vero and AA Insurance use Turners' 10 nationwide centres to store, value, market, and sell plant and vehicles. Each stage of the process is managed by Turners from vehicle pick-up to processing and sale.

AA Insurance CEO, Chris Curtin says: "It's the input of trusted partners, like Turners, that help ensure there is no weak link in the chain and that our customers' experience is always positive. We are grateful to the team at Turners for their quality of service and commitment to excellence."
"This year, AA Insurance was recognised as New Zealand's most trusted insurance provider for the third year running, and also received two Canstar Blue's Most Satisfied Customer Awards. These awards demonstrate the strength of the relationship we have with our partners to help us deliver great results for our customers", says Curtin.

Turners Auctions CEO, Todd Hunter, says renewing the partnership with these two world class companies reflects Turners commercial strength as a trusted client partner.

"At Turners we strive for the best and having great partners, like AA Insurance and Vero, is not only good for our business but allows us to implement our vision of making a real difference for our clients and customers. We have worked hard on our relationships, which have produced some fantastic results.

"During this time Turners has increased vehicle yield returns for both companies and we are very proud of this achievement. We look forward to continuing to make a difference for both AA Insurance and Vero in the next stage of our relationship," says Hunter.

----

SNOOPY

percy
23-09-2013, 05:09 PM
Did not state in the announcement how long the renewals were for.

Snoopy
23-09-2013, 06:32 PM
Did not state in the announcement how long the renewals were for.

Well, looking at the announcement again I would say it was ambiguous.

"Turners has partnered with Vero and AA Insurance for 10 and 15 years respectively."

You could either read that as an historical statement, or a statement of future intent from a deal just done. But it does sound a bit good to be true. So I think you are probably right Percy. The fact that Vero is mentioned further down in the article as having a relationship with Turners for 10 years would support your argument.

SNOOPY

percy
23-09-2013, 06:49 PM
Well, looking at the announcement again I would say it was ambiguous.

"Turners has partnered with Vero and AA Insurance for 10 and 15 years respectively."

You could either read that as an historical statement, or a statement of future intent from a deal just done. But it does sound a bit good to be true. So I think you are probably right Percy. The fact that Vero is mentioned further down in the article as having a relationship with Turners for 10 years would support your argument.

SNOOPY

Depending on how busy I am tomorrow I will try to find time to ring and find out.
Would think 3 years,but that is only a guess.
What I think is important is that this business has stayed with Turners,and not go to where they they lost the other insurance business to.

percy
23-09-2013, 07:11 PM
Well that did not take long.Saw it was a cell phone so rang Todd Hunter and congratulated him on retaining this insurance business.
How long is the contact for I asked? "A couple of years", he replied.

janner
23-09-2013, 11:35 PM
Well that did not take long.Saw it was a cell phone so rang Todd Hunter and congratulated him on retaining this insurance business.
How long is the contact for I asked? "A couple of years", he replied.

Real easy .. Aye.. :-))

janner
23-09-2013, 11:39 PM
Sorry Perc.. .. Should not have said that.. The times they are.. a'changing.. ( for the worse ).. Aye ??

percy
24-09-2013, 05:41 AM
Right first time.Real easy.!Good of them to put their contact details on the bottom of the announcement.Means you get the right person direct.When I ring them they just seem so happy to have some one to talk to.!!!! lol.

Snoopy
26-09-2013, 05:52 PM
Good of them to put their contact details on the bottom of the announcement.Means you get the right person direct.When I ring them they just seem so happy to have some one to talk to.!!!! lol.


I think that these smaller scale companies, without their own PR hype department often fly below the radar. It is only through the opportunity for reading about such second liners on forums such as these they can gain any profile. So Todd Hunter was probably genuinely happy that someone out there in public land was taking an interest!

SNOOPY

PS Thanks for the homework Percy.

Snoopy
26-09-2013, 06:18 PM
TUA Finance shows up very well with the amount of capital behind the company relative to the loans provided. What is more the underlying gearing ratio is very conservative. Moreover, there is enough liquidity on the books should some of those finance repayments become a bit slow.

What is not so good is the EBIT to Interest Expense ratio, which fails my test. However I would argue that offsetting all of the company's bank debt against the finance division only is a management decision.

If management wanted, they could transfer all of this debt to the parent company and the finance division would then pass the EBIT to Interest Expense ratio test in spectacular fashion! If the parent company also carried a lot of debt then I would be worried. But the parent company carries no term debt outside of the finance division. My argument then is that taking an overall company perspective management could easily make TUA finance pass my test with some behind the scenes bookwork. I think this is enough to turn my superficial fail grade into a pass mark for TUA finance.

I have looked at a few finance institutions in NZ now, and to my mind there isn't another that stacks up better than TUA.



Have only just taken the opportunity to look at the HY2013 report in detail. I see that the operating profit of the auction side of the business took a hit. But 'Fleet' and 'Finance' more than made up the difference. As of 30th June we had a TUA business with three very similar strength arms.

I took a look at the last nine half year periods for the finance division, and calculated the total segment revenue and operating profit as follows:

1HY2009: $1.946m, $0.107m
2HY2009: $2.151m, $0.263m
1HY2010: $2.510m, $0.520m
2HY2010: $2.673m, $0.602m
1HY2011: $2.630m, $0.633m
2HY2011: $2.806m, $0.747m
1HY2012: $2.532m, $0.702m
2HY2012: $2.875m, $0.693m
1HY2013: $2.668m, $0.907m

It is interesting that apart from a slight wobble during FY2012, it is onwards and upwards both in terms of revenue and operating margin.
Operating margin at 1HY2009 was $0.107/$1.946 = 5.5%. Fast forward to 1HY2013 and operating margin was $0.907m/$2.668m= 34.0% (!) I didn't know it was even legal to make that much money off borrowers! Perhaps it is an aberration of low interest rates?

Finance revenue is only up 30% in those nine half year periods, but operating profit is up nearly 900% over the same time. No wonder I like this company! And all the time behind it is their other strength. Lots of capital available to support the growth of the business, with little need to go cloth cap in hand to shareholders!

SNOOPY

percy
26-09-2013, 08:34 PM
I think that these smaller scale companies, without their own PR hype department often fly below the radar. It is only through the opportunity for reading about such second liners on forums such as these they can gain any profile. So Todd Hunter was probably genuinely happy that someone out there in public land was taking an interest!

SNOOPY

PS Thanks for the homework Percy.

Michael Wan at Synlait has not returned my call.Left my number on his cell phone.
I often ring company's. CEO or CFO are usually good to talk to.You must have sensible questions to ask them.Most are very pleased to talk to a shareholder who is interested in the company.
I never invested in Methven as the CEO [Rick Falla] never returned my call.If he can't organise his office so he receives calls I will not invest with the company.I was most impressed with Heartland's Bruce Irvine.Rang him to congratulate him on getting the banking licence.His secretary said he was in Melbourne.Would I mind leaving my name and phone number.Told her it was just to congratulate him on banking licence,so was very surprised when he rang me a couple of days later.

percy
26-09-2013, 08:50 PM
Have only just taken the opportunity to look at the HY2013 report in detail. I see that the operating profit of the auction side of the business took a hit. But 'Fleet' and 'Finance' more than made up the difference. As of 30th June we had a TUA business with three very similar strength arms.

I took a look at the last nine half year periods for the finance division, and calculated the total segment revenue and operating profit as follows:

1HY2009: $1.946m, $0.107m
2HY2009: $2.151m, $0.263m
1HY2010: $2.510m, $0.520m
2HY2010: $2.673m, $0.602m
1HY2011: $2.630m, $0.633m
2HY2011: $2.806m, $0.747m
1HY2012: $2.532m, $0.702m
2HY2012: $2.875m, $0.693m
1HY2013: $2.668m, $0.907m

It is interesting that apart from a slight wobble during FY2012, it is onwards and upwards both in terms of revenue and operating margin.
Operating margin at 1HY2009 was $0.107/$1.946 = 5.5%. Fast forward to 1HY2013 and operating margin was $0.907m/$2.668m= 34.0% (!) I didn't know it was even legal to make that much money off borrowers! Perhaps it is an aberration of low interest rates?

Finance revenue is only up 30% in those nine half year periods, but operating profit is up nearly 900% over the same time. No wonder I like this company! And all the time behind it is their other strength. Lots of capital available to support the growth of the business, with little need to go cloth cap in hand to shareholders!

SNOOPY

I am very scared of small companies who are having to come back to shareholders for cash.
Small companies with strong balance sheets, with modest or little debt, paying a dividend and growing are what we enjoy.
TUA is one of these.

percy
15-11-2013, 09:58 AM
Today's announcement of a upgrade for full year's profit is most welcome.

percy
15-11-2013, 11:33 AM
i often whatched this stock and i think milford bought some shares for its dividend, i certainly considered it a good perfomer for the last 4 years... should have bought for our non trading trust, big mistake..

Milford sold for a good profit to DPC.
I think you will look back in a couple of years time and kick yourself for not buying them at $2.50 on 15/11/2013.!
Plenty of growth and divies yet to come.

biker
15-11-2013, 11:49 AM
Milford sold for a good profit to DPC.
I think you will look back in a couple of years time and kick yourself for not buying them at $2.50 on 15/11/2013.!
Plenty of growth and divies yet to come.

So DPC showed better foresight than Milford ( who could have sold for all sorts of reasons, but they have certainly foregone an impressive capital gain.) Shows the potential of DPC Board and Management IMO.

percy
15-11-2013, 12:01 PM
A very clever move by DPC.
TUA are growing their finance and insurance business which fits in perfectly with DPC.

BIRMANBOY
15-11-2013, 03:03 PM
Must be about time for another "special"....Please sir.

percy
15-11-2013, 04:48 PM
I am holding myself at the ready.
Expect DPC would like a "special" too.!

noodles
15-11-2013, 05:58 PM
Today's announcement of a upgrade for full year's profit is most welcome.
So the real question is if there is any value left? There has been quite a runup in share price prior to today's jump. Based on forecast, they have pe of 15.7 now . Given their decent yield and an over-exuberant sharemarket, you might squeeze a few more % points? Perhaps it could reach a pe of 20?

I used Turners to sell and buy another car recently. It was an excellent experience. It was easy and felt as if I got a good deal.

I see better value in CMO. Lower pe. Same industry (well sort of). New Car sales are at record levels.

DISC not holding TUA, but holding CMO
No advice here, just my opinion.

noodles
15-11-2013, 06:34 PM
Pity this company is not listed. Doing very well. Incredible Year on year profit growth. Maybe a takeover target for HNZ, TUA, DPC??? Now that TUA is on such a high pe, they may be able to make an eps accreditive acquisition.

" Motor Trade Finances Limited
FLLYR: MTF: MTF reports full year profit of $8.2 million

Profit after tax was $8.2m (30 September 2012: $4.6m)"

percy
15-11-2013, 06:36 PM
The attraction of TUA for me is the growth opportunities they have available through finance and insurance.CMO,only act as agents for Motor trade Finance and others,
TUA has a ROE of 25% while CMO has ROE of 13.43.
CMO is a much lager company with a market cap of $160 mil compared with TUA's $66mil.
If I held CMO I don't think I would buy TUA,however I hold TUA, I do not wish to own both.

percy
15-11-2013, 06:41 PM
Pity this company is not listed. Doing very well. Incredible Year on year profit growth. Maybe a takeover target for HNZ, TUA, DPC??? Now that TUA is on such a high pe, they may be able to make an eps accreditive acquisition.

" Motor Trade Finances Limited
FLLYR: MTF: MTF reports full year profit of $8.2 million

Profit after tax was $8.2m (30 September 2012: $4.6m)"

If you follow my posts on Heartland thread you will note I have mentioned that MTF would be a great fit for HNZ.HNZ are keen to expand their already large motor vehicle finance presence.I would not be surprised to see HNZ take them over.

noodles
15-11-2013, 07:03 PM
If you follow my posts on Heartland thread you will note I have mentioned that MTF would be a great fit for HNZ.HNZ are keen to expand their already large motor vehicle finance presence.I would not be surprised to see HNZ take them over.

Ah Percy, you are always one step ahead of me. I'm pretty sure you brought HNZ well before I did. Personally, I think HNZ is too cheap to make aquisitions. They need to get their Pe higher so the acquisition is eps accreditive. Perhaps DPC is a better fit for MTF?

percy
15-11-2013, 07:09 PM
Ah Percy, you are always one step ahead of me. I'm pretty sure you brought HNZ well before I did. Personally, I think HNZ is too cheap to make aquisitions. They need to get their Pe higher so the acquisition is eps accreditive. Perhaps DPC is a better fit for MTF?

That is not what they were saying at their agm.!!!!
In fact they stated they were experts at acquisitions having merged three companies to form HNZ, and then their takeover of PGW Finance.!
High equity ratio,and strong liquidity means they are [not allowed to say it by Paper Tiger] to takeover MTF without need for further capital.!

percy
19-11-2013, 07:50 PM
Disc.
I sold my TUA yesterday @ $2.42.

BIRMANBOY
19-11-2013, 07:56 PM
Percy, say it aint so.....you'd had those since 1968 hadn't you;). Go ahead make us jealous..what was your average buy in price? Must admit I have yearnings to cash up too but am determined to hold this till I Turner over in my coffin.
Disc.
I sold my TUA yesterday @ $2.42.

percy
19-11-2013, 08:20 PM
Percy, say it aint so.....you'd had those since 1968 hadn't you;). Go ahead make us jealous..what was your average buy in price? Must admit I have yearnings to cash up too but am determined to hold this till I Turner over in my coffin.

No,I brought @$1.02 on17/3/2008.
I have always been fully invested in the share market.Ridden markets up,and gone down with them.I have done too well over the past two years.I decided to sell 20% of our portfolio.Sold in NZ;SML,STU,SKL,TUA and have SKC on the market to sell.
In Aussie I sold AZV,CAJ and a small number of INA.

winner69
19-11-2013, 08:24 PM
......and HNZ over the next couple of days cause I dont wan to move the market

percy
19-11-2013, 08:34 PM
......and HNZ over the next couple of days cause I dont wan to move the market

No.
With TUA doing very well and vehicle sales at all time record I think HNZ will be doing very well with their MARAC vehicle finance business.
I expect HNZ will announce a splendid acquisition before the half year announcement in Feb,which, I think will confirm HNZ are on track for a full year result of $34mil plus.
The 20% sell down [except for SKC] was achieved in one day.Very pleased and surprised.

BIRMANBOY
20-11-2013, 08:33 AM
Funny boy...Percy will never sell...rumour is that he is building up his position (aiming for a directorship).
......and HNZ over the next couple of days cause I dont wan to move the market

Snoopy
25-11-2013, 08:08 AM
So the real question is if there is any value left? There has been quite a runup in share price prior to today's jump. Based on forecast, they have pe of 15.7 now . Given their decent yield and an over-exuberant sharemarket, you might squeeze a few more % points? Perhaps it could reach a pe of 20?

I used Turners to sell and buy another car recently. It was an excellent experience. It was easy and felt as if I got a good deal.

I see better value in CMO. Lower pe. Same industry (well sort of). New Car sales are at record levels.

DISC not holding TUA, but holding CMO
No advice here, just my opinion.

I have been a TUA shareholder for seven years, first gaining my current shareholding level five years ago. From that time, the share price rise and dividends received has given a near 100% return on my invested capital. Consequently, TUA is now my second largest NZX investment, (behind only Restaurant Brands).

I was considering taking some profits off the table a month ago. But after attending the 19th October 2013 ‘Classic’ auction in Christchurch I decided not to. What changed my mind? There were 49 lots up for sale. 24 (49%) were sold on the spot to keen buyers, 10 (20%) were subject to further negotiation and 15 lots (31%) attracted no bid.

At the equivalent auction in 2012 (12th October) there were 26 lots. On that day 11 (42%) lots were sold on the spot, 8 (31%) were subject to further negotiation and 7 (27%) were passed in with no bid.

A single comparison cannot tell a full story, but it does make an interesting anecdote. The auction nearly doubled in size in terms of vehicles offered. And the percentage of lots knocked down on the day was significantly higher, even as the percentage of lots passed in with no bid was about the same (increased a bit). Take out two lots that I feel had unrealistically high reserves (a 73 Falcon GT Coupe for $70k and a 74 Fairmont Coupe for $45k) in 2013 and the percentage of lots with no bids line up almost exactly. Anecdotally there were a lot more people on the floor at the 2013 auction (roughly double) and more cars achieved prices above their guidance price range. The auction had a real buzz right until the end. Contrast this to 2012, where half of the bidders were empty chairs by the time the (much smaller) auction wound up.

The Classic auction tends to be a flagship event. But IMO if you can create a buzz right to the end, then you are doing something right. IMO CEO Todd Hunter has nailed it. I don’t know everything they did differently this year. But one change that TUA made was advertising the auction prominently in the local community newspaper. That and not clashing with the Vintage Car Club swap meet like they did in 2012. These may seem small changes, but small changes can make a big difference in this kind of activity. If you double an auction’s size and have a higher sales conversion rate, it must be good for the bottom line.

On the comparison with Colonial Motors, the used market in general tends to lag the new car market by 3-5 years. So any growth we are seeing in the likes of CMO now, augers very well for TUA down the track.

SNOOPY

Snoopy
26-11-2013, 01:40 PM
Disc.
I sold my TUA yesterday @ $2.42.

Reduced my holding the other day Percy by selling a parcel at $2.45. My only reason for selling was that I had been too successful and that TUA had become a disproportionate part of my portfolio. My average holding price is now $1.14 and I intend to hold onto this share indefinitely, or until something better comes along (which probably means indefinitely).

SNOOPY

BIRMANBOY
26-11-2013, 01:51 PM
May we all be cursed to be in the shameful position of "too successful". :)
Reduced my holding the other day Percy by selling a parcel at $2.45. My only reason for selling was that I had been too successful and that TUA had become a disproportionate part of my portfolio. My average holding price is now $1.14 and I intend to hold onto this share indefinitely, or until something better comes along (which probably means indefinitely).

SNOOPY

Snoopy
03-01-2014, 10:16 AM
The attraction of TUA for me is the growth opportunities they have available through finance and insurance.


I confess I am a bit confused at the presentation of the FY2013 interim results of the finance division at Turners Auctions. Finance receivables are listed at $9.670m on the 30th June 2013 balance sheet.

But then if you go to the 'Segment Information', we see total financial revenue of $2.668m and a divisional profit of $0.907m. By one calculation the segment operating margin is:

$0.907m/$2.668m = 34%

But if you take the operating margin to reflect the total finance receivables on the books, then the finance division operating margin is:

$0.907m/$9.670m = 9.4%

Which is the right answer?

SNOOPY

percy
03-01-2014, 10:36 AM
You may have to do a bit more research,however you must keep in mind the tie-up between TUA and Motor Trade Finance.
It would appear to me that at this stage MTF are financing TUA's finance book,so the lesser figure may be close to the mark.
Going forward we will have to see whether MTF continue as financier or whether DPC take over that roll.
At this stage [finance] growth is limited to what TUA can finance via Turners Auctions.

winner69
03-01-2014, 10:40 AM
PT will correct me as prob wrong as I don't really try to understand the financials of these types of companies

The Finance Revenue reported is mainly interest received

Operating Profit is with expenses (including interest paid) deducted

So if you are correct that all finance receivables belong to the Finance segment the 9% figure is the correct one if you want to measure what margin they making from the lending they do

Snoopy
03-01-2014, 11:55 AM
PT will correct me as prob wrong as I don't really try to understand the financials of these types of companies

The Finance Revenue reported is mainly interest received

Operating Profit is with expenses (including interest paid) deducted

So if you are correct that all finance receivables belong to the Finance segment the 9% figure is the correct one if you want to measure what margin they making from the lending they do


As you surmise Winner, yes I do wish to calculate the operating margin of the TUA finance division for comparative purposes.

The obvious problem with using the 'finances receivable' figure is that the figure quoted at balance date is a snapshot at 30th June. Yet the income earned for that period is a collective earnings over six months. Not a problem if the finance receivables figure is still representative of that six month period of course.

In this case the finance receivables book has grown from $9.407m to $9.670m so not a huge change (+3%). Using the end of period finance receivables figure will probably slightly understate actual operating margin. I usually just use the end of period finance receivables figure, unless there is an obvious gross error in doing so.

SNOOPY

Snow Leopard
03-01-2014, 12:15 PM
I confess I am a bit confused at the presentation of the FY2013 interim results of the finance division at Turners Auctions. Finance receivables are listed at $9.670m on the 30th June 2013 balance sheet.

But then if you go to the 'Segment Information', we see total financial revenue of $2.668m and a divisional profit of $0.907m. By one calculation the segment operating margin is:

$0.907m/$2.668m = 34%

But if you take the operating margin to reflect the total finance receivables on the books, then the finance division operating margin is:

$0.907m/$9.670m = 9.4%

Which is the right answer?

SNOOPY

1) The $9.670m is the current portion of Finance Receivables (i.e loans due to mature within 12 months), you need to include the $12.475m of non-current Finance Receivables as well to get a total of $22.145m of Finance Receivables. Here we are talking ASSETS

2) Interest on that lot was $2.172m and there was a further $0.490m Finance Related Insurance Commission which is almost precisely the $2.668m. Here we are talking REVENUE

So you probably want to re-work your figures to take these into account, one is a Profit Margin the other is a Return on Assets

Best Wishes
Paper Tiger

Disc: TUA is far too illiquid for me too be interested in it as anything other than an account reading exercise.

Snow Leopard
03-01-2014, 12:20 PM
And don't get me started on whether they are making adequate provision for loans going bad as interest rates start to rise etc.

Best Wishes
Paper Tiger

percy
03-01-2014, 01:03 PM
It is most probably unfair to compare TUA with HNZ.A better comparison would be with SCY.
SCY's main business is selling product and offering to financing it.Although SCY go beyond that offering personal loans to customers.Funds are sourced from ANZ Bank.
TUA's main business is selling cars, and financing them.Funds are sourced from MTF.

Snoopy
04-01-2014, 07:34 AM
The obvious problem with using the 'finances receivable' figure is that the figure quoted at balance date is a snapshot at 30th June. Yet the income earned for that period is a collective earnings over six months. Not a problem if the finance receivables figure is still representative of that six month period of course.

In this case the finance receivables book has grown from $9.407m to $9.670m so not a huge change (+3%). Using the end of period finance receivables figure will probably slightly understate actual operating margin. I usually just use the end of period finance receivables figure, unless there is an obvious gross error in doing so.


As PT has pointed out, I should have used the total financial receivables, not just the current financial receivables to evaluate the loan book.

$9.670m + $12.475m = $22.145m (for HY2013)
$9.407m + $11.830m = $21.237m (for FY2012)

So the growth in the loan book over six months has averaged 4.2%, not 3%.

This is of course assuming that all financial receivables relate to the motor vehicle loan book. Given the aversion of TUA to debt and the relatively simple nature of their business, I think this is a fair assumption.

SNOOPY

Snoopy
04-01-2014, 07:52 AM
1) The $9.670m is the current portion of Finance Receivables (i.e loans due to mature within 12 months), you need to include the $12.475m of non-current Finance Receivables as well to get a total of $22.145m of Finance Receivables. Here we are talking ASSETS

2) Interest on that lot was $2.172m and there was a further $0.490m Finance Related Insurance Commission which is almost precisely the $2.668m. Here we are talking REVENUE

Return on Assets =
So you probably want to re-work your figures to take these into account, one is a Profit Margin the other is a Return on Assets



OK, so redoing the comparison along the lines that PT has suggested.

The return on revenue calculation.

($0.907m -$0.490m) / ($2.668m-$0.490m) = 19.1%

Here I have assumed the $0.490m insurance commission is included in the finance revenue, so have removed this from the denominator. I have also assumed the insurance commission flows straight to operating profit so have removed it from the numerator. What is left then should be the return on revenue, purely due to interest earned on the loan book.

Next we need to rework the other calculation, the return on assets to include the long term financial receivables as well as the current financial receivables.

($0.907m-$0.490m)x2 / $22.145m = 3.8%

Once again I have removed the insurance commission from the finance division operating profit, and introduced a factor of 2 to 'annualise the return', reflecting the fact that these finance division operating profits were earned over six months.

SNOOPY

Snoopy
04-01-2014, 08:33 AM
<snip>
Here we are talking ASSETS
<snip>
Here we are talking REVENUE

So you probably want to re-work your figures to take these into account, one is a Profit Margin the other is a Return on Assets


One more comment on the merits of choosing return on assets or return on revenue as the best measuring stick.

Last year PGW suffered a significant drop in revenue when they decided to include only the commission on one of their bulk products (fertilizer I think) and not the gross sales revenue in their reported revenue figures. PGW pointed out that this was a change in accounting policy and not a large fall off in business that a casual read of the accounts might suggest. I don't believe this change in revenue treatment was forced on PGW by a change in accounting rules. So I think it is fair to say that whether you should recognise the gross sales of any product as revenue, or just the commission you receive on that product as revenue is a choice that has no 'correct' answer.

The situation I believe is analogous to the case here, where TUA report their financial division returns seemingly based on the commission received (some 22.6% return), not the underlying value of the loan (a 4.5% return).

For comparative purposes though, I would favour using the underlying value of the loan as the basis for measuring return. That 4.5% figure I think would be harder to manipulate.

SNOOPY

noodles
13-02-2014, 12:04 PM
I've been monitoring TUA closely over the last 6 months. It is a great case study of getting new management in to drive a change of business model. They are moving from a traditional auction company to a retail buyer and seller of cars. This is quite disrupting to the used car market. They are also picking up a lot of lending at the same time.

The full year results shows the transformation is working. In the second half, results were up significantly on the first half (eps from .078c to .098). What is amazing in this result is that they lost the AIG contract(15% of profits) with the second half results being affected by this event.

Given this growth rate, I think the market should be assigning a PE closer to 20 for TUA. Target $4 for me (using twice 2HFY13 eps)

Worth noting that the result also beat previous guidance.

DISC: Holding. This is not advice. Please do your own research.

Snoopy
13-02-2014, 01:48 PM
I've been monitoring TUA closely over the last 6 months. It is a great case study of getting new management in to drive a change of business model. They are moving from a traditional auction company to a retail buyer and seller of cars. This is quite disrupting to the used car market. They are also picking up a lot of lending at the same time.


Yes it was certainly a great result from TUA Noodles. The share price reaction today showed that Mr Market had it all wrong. And to think I dumped them from my "Pick the shares" competition on Sharetrader! Just as well I didn't sell them all off in real life. I have a slightly different take on your observations on the disrupting of the NZ second hand car market. I believe it was already being disrupted and was ripe for a big player to come in and shake out the every man and his dog used car yards that seemed to be on every seedy city corner. Turners Auctions are simply moving into that vacant market slot.

The finance division has been a quiet little achiever under the radar for some time too.

I am still a little uncomfortable though about TUA wearing the dual hats of 'wholesale auctioneer' and 'car retailer'. This was part of what got "All Ears", the old Sharechat contributor, so wound up all those years ago. It would be fascinating to know what percentage of Turner's Auction sales go to third party car dealers these days.

SNOOPY

noodles
13-02-2014, 01:57 PM
Yes it was certainly a great result from TUA Noodles. The share price reaction today showed that Mr Market had it all wrong. And to think I dumped them from my "Pick the shares" competition on Sharetrader! Just as well I didn't sell them all off in real life. I have a slightly different take on your observations on the disrupting of the NZ second hand car market. I believe it was already being disrupted and was ripe for a big player to come in and shake out the every man and his dog used car yards that seemed to be on every seedy city corner. Turners Auctions are simply moving into that vacant market slot.

The finance division has been a quiet little achiever under the radar for some time too.

I am still a little uncomfortable though about TUA wearing the dual hats of 'wholesale auctioneer' and 'car retailer'. This was part of what got "All Ears", the old Sharechat contributor, so wound up all those years ago. It would be fascinating to know what percentage of Turner's Auction sales go to third party car dealers these days.

SNOOPY
I recall it is around 50%.

percy
13-02-2014, 03:26 PM
An excellent result.
Looks as though I sold too soon.

macduffy
13-02-2014, 03:56 PM
My current investment policy - "investment by inertia" - has kept me in TUA!

:)