TRA - Turners Automotive Group [previously TNR - Turners Limited]

[sb9]

Have been re-looking in to TRA lately and consider this to be one of the better investment options on the NZX at current prices.

Using the information provided in their July 27 presentation, the company looks to have the perfect mix of growth, dividend and currently valued at an attractive multiple.

Using the lower of the FY18 Analysis guidance figures of NPBT of $29m (NPAT of $20.9m), I have EPS growth of 18.6% at a FY18 P/E of 12.43. Looks like a bargain when considering most of the flat or no growth companies trading at higher multiples.

I'm unsure why this is so unloved at the moment (maybe overhead resulting from the Hugh Green sell down at a good discount), but I have been topping up at $3.57 & $3.49 and happy to receive the quarterly dividends growing every year.

Yes, it does seem bit unloved atm. Since listing on ASX the price actually went backwards...go figure that!!!

[BlackPeter]

Yes, it does seem bit unloved atm. Since listing on ASX the price actually went backwards...go figure that!!!

I never understand why people think an ASX listing would be a guarantee for SP growth ... actually - I'd say that the two are quite uncorrelated.

[RTM]

Have been re-looking in to TRA lately and consider this to be one of the better investment options on the NZX at current prices.

Using the information provided in their July 27 presentation, the company looks to have the perfect mix of growth, dividend and currently valued at an attractive multiple.

Using the lower of the FY18 Analysis guidance figures of NPBT of $29m (NPAT of $20.9m), I have EPS growth of 18.6% at a FY18 P/E of 12.43. Looks like a bargain when considering most of the flat or no growth companies trading at higher multiples.

I'm unsure why this is so unloved at the moment (maybe overhead resulting from the Hugh Green sell down at a good discount), but I have been topping up at $3.57 & $3.49 and happy to receive the quarterly dividends growing every year.

Yes, I have been reconsidering them lately as well. Hold both bonds and shares. When I bought I thought I was buying into a diversified finance company. Acquisitions have meant that it is now largely a one stop car sales company. So I think it has morphed into something quite different. Not sure that I want this level of exposure to the second hand car business. Still mulling it over.

[sb9]

I never understand why people think an ASX listing would be a guarantee for SP growth ... actually - I'd say that the two are quite uncorrelated.

I never assumed listing on ASX would be a boost for sp, all I'm saying is the downtrend has been in place since listing on ASX, you call that correlation or something else. Bit that's what the chart says for now at least.

[Benny1]

I have thought about TRA on and off over the past year or so....Not sure if I'm keen on a second hand car business, especially if the economy turns a bit sour,
Spending on cars seems always to be the first thing that fall's off the shopping list when consumers decide keep their hands in their pockets.
Great industry while everything is rosy, not so when things go a little tit's up!..

I also replaced a car late last year and found new cars too be just as competitive if not more so than used cars, my brother did the same, as well as a few guys at work that also have bought cars recently.
Just some food for thought....

[BlackPeter]

I have thought about TRA on and off over the past year or so....Not sure if I'm keen on a second hand car business, especially if the economy turns a bit sour,
Spending on cars seems always to be the first thing that fall's off the shopping list when consumers decide keep their hands in their pockets.
Great industry while everything is rosy, not so when things go a little tit's up!..

I also replaced a car late last year and found new cars too be just as competitive if not more so than used cars, my brother did the same, as well as a few guys at work that also have bought cars recently.
Just some food for thought....

Actually - if things turn sour, people are much more likely to buy a used car than a new one, i.e. great hedge.

As well - 20% of New Zealand cars are more than 20 years old (that's 700.000 cars). Most of them clearly need a replacement soon. How many of their owners would you expect to buy a new car as a replacement?

Have a look at their recent investor presentation:

https://www.nzx.com/files/attachments/262355.pdf

[Beagle]

Quality of new cars is another factor. Bought the Mrs the all new 10th generation Honda Civic last month, a 2017 demo for $26,500. Really after ten generations this has morphed into a medium sized car now and has almost exactly the same proportions as the previous model Honda Accord. Its been a real eye-opener experiencing the quality of that car compared to much more expensive cars we've bought in the past and to say Mrs Beagle is extremely pleased with it would be quite an understatement. In my opinion the technology, features and quality of some of the latest models make a compelling case for themselves. That said the truth is there is a VAST mass market still in the used car field for people who can only afford a circa $12-15K car and that's where Turners comes in with their one stop shop business model. I think the shares are good value but my preference continues to be to invest in the convertible bonds with this one.

[BlackPeter]

Quality of new cars is another factor. Bought the Mrs the all new 10th generation Honda Civic last month, a 2017 demo for $26,500. Really after ten generations this has morphed into a medium sized car now and has almost exactly the same proportions as the previous model Honda Accord. Its been a real eye-opener experiencing the quality of that car compared to much more expensive cars we've bought in the past and to say Mrs Beagle is extremely pleased with it would be quite an understatement. In my opinion the technology, features and quality of some of the latest models make a compelling case for themselves. That said the truth is there is a VAST mass market still in the used car field for people who can only afford a circa $12-15K car and that's where Turners comes in with their one stop shop business model. I think the shares are good value but my preference continues to be to invest in the convertible bonds with this one.

Actually - I tend to look at it from the other side. We typically have one new and one pre-loved car in our "fleet" - and normally I am much happier with the used car (better value for money and lots of extras for free if you choose wisely; Might stop buying new cars completely ...

[stoploss]

Quality of new cars is another factor. Bought the Mrs the all new 10th generation Honda Civic last month, a 2017 demo for $26,500. Really after ten generations this has morphed into a medium sized car now and has almost exactly the same proportions as the previous model Honda Accord. Its been a real eye-opener experiencing the quality of that car compared to much more expensive cars we've bought in the past and to say Mrs Beagle is extremely pleased with it would be quite an understatement. In my opinion the technology, features and quality of some of the latest models make a compelling case for themselves. That said the truth is there is a VAST mass market still in the used car field for people who can only afford a circa $12-15K car and that's where Turners comes in with their one stop shop business model. I think the shares are good value but my preference continues to be to invest in the convertible bonds with this one.

Imagine how happy Mr Beagle would be if Mrs Beagle hid this in the stable
https://www.youtube.com/watch?v=4YSjItQneNM

[Beagle]

Imagine how happy Mr Beagle would be if Mrs Beagle hid this in the stable
https://www.youtube.com/watch?v=4YSjItQneNM

WOW, that's pretty impressive stuff for a humble Honda Civic isn't it !, (albeit the hot hatch variant). I saw one in an Honda Cars Broadway when buying the cooking model version and they look like a pretty handy bit of kit with brembo brakes, fancy seats with dual harness capability e.t.c.
I won't show Mrs Beagle that video, she'll be barking mad I bought her the cheaper model LOL. These new Honda Civic's which have won a wide range of international motoring awards are an exceptional bit of kit for the money in my opinion. You can see why the Type R versions have a cult following with track day racers can't you !