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  1. #4001
    Speedy Az winner69's Avatar
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    Snoopy’s post showing that the $9m of abnormals / one offs in F18 reads as if they raided every bottom drawer they could to boost profits to a respectable $23m profit.....otherwise it would have been ne disasterous year.

    Maybe it really was and that’s why the share price fell so much
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  2. #4002
    ShareTrader Legend Beagle's Avatar
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    Beagle.. We also need to consider the sunset nature of the industry...plenty of overseas car companies trading on single digit 2019 PE's reflecting the overarching nature of where the industry is headed over time.
    Some sobering examples on a quick look on market screener.
    Ford 6.4
    GM 6.2
    Fiat Chrysler 4.5
    BMW 6.7
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  3. #4003
    Speedy Az winner69's Avatar
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    Quote Originally Posted by BlackPeter View Post
    Interesting to see how the markets perception of "the right" PE is changing. Its not that long ago that the market thought a PE of 15.8 is highly appropriate for TRA (24 cents EPS in FY2017 - SP $3.80). Today Mr Market thinks that a PE of 8.3 is just right (29 cts EPS in FY2018 at $2.40). And - as we all know, Mr. Market is always right and always will be. However - Mr Market likes to change his mind without notice and sometimes he is euphoric and sometimes gloomy.

    I think your (beagle's) view is absolutely legitimate - and sure, if TRA's strategy doesn't work out and they always stay a boring old used car dealer without any noticable additional income from insurance, finance, maintenance, end-of-life business and property development than, yes - longterm an average PE of around 10 might be quite appropriate. But isn't their income from all these other "branches" growing?

    So - assuming for a moment their strategy does work out and their market share and margin is growing - than maybe the downside risks at the current share price are lower than the potential upside rewards ...

    Unless we think TRA will be biting the dust or continuously shrink ... market is normally cycling between euphoria and gloom ... and given that we are currently in gloom mode - what would be next? More gloom?
    Problem is bp that euphoric people don't recognise euphoria when they see it.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  4. #4004
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by winner69 View Post
    Problem is bp that euphoric people don't recognise euphoria when they see it.
    How do you know and why is this a problem?
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  5. #4005
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    Goes Ex divvy on Monday, no one gives a toss about it by the looks of the SP, should just stay the same after the divvy comes off in that case.

  6. #4006
    Legend minimoke's Avatar
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    Quote Originally Posted by couta1 View Post
    Goes Ex divvy on Monday, no one gives a toss about it by the looks of the SP, should just stay the same after the divvy comes off in that case.
    I' hoping so - only way I'm going to recover my capital loss is if SP holds up.

  7. #4007
    percy
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    Quote Originally Posted by greater fool View Post
    Snoops; the insurance float is the property developer. You will find the 'profits' booked to the insurance business.
    Look at AR (to 31Mar18 ), top of page 7, to read all about it;

    "We have continued to build our investment into property,
    with the aim of securing strategic sites to extend our footprint
    or for reconfiguration of existing sites to drive improved retail
    experience for further growth. We have allocated a proportion
    of insurance reserves to support this property strategy as
    it achieves better utilisation of capital in the business, and
    improved insurance division returns."
    Makes very good sense.
    With site developments planned over the next 5 years,insurance division is "well positioned."
    Last edited by percy; 18-01-2019 at 03:09 PM.

  8. #4008
    ShareTrader Legend Beagle's Avatar
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    This signing up for long leases with expensive minimum annual rent adjustments (which really compound and catch up with you in the future) and on-sale for a profit is not a new trick by any means and has been used by "highly successful" companies in recent times like the Warehouse and PGG Wrightson. All you are doing is making your accounts look artificially good for now and effectively handicapping future profits. In my opinion Snoopy is dead right to adjust these profits out which leaves the company with quite modest true sustainable eps. I am sure others will have a different interpretation of this creative approach and that's fine.
    Here's some more 2019 motor vehicle PE's to further illustrate my point made earlier, mainstream Japanese manufacturers this time
    Honda 7.8
    Mazda 8.5
    Motor vehicle manufacturing, sales and distribution is not a high PE business, its a low PE cyclical business in very gradual long term systemic decline.
    Last edited by Beagle; 18-01-2019 at 03:40 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  9. #4009
    percy
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    Makes great sense to me.
    Get the site they want and can put the buildings they want.
    Most landlords want their site covered in buildings.This does not suit Turners,who require only small amount of land for office etc,and most of a site for displaying vehicles.
    Once Turners have developed a site they know the rent that site will afford,and can then decide to hold or sell..
    The Wiri site I doubt they will sell.
    Other sites such as ChCh, where they are not in agreement with the landlord,they can either foccus the landlord's atention ,or develop their own site.
    It is called independence.
    And why should they fatten a developer's pocket?
    Might just as well "clip the ticket" themselves.
    Last edited by percy; 18-01-2019 at 03:30 PM.

  10. #4010
    On the doghouse
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    Quote Originally Posted by greater fool View Post
    Snoops; the insurance float is the property developer. You will find the 'profits' booked to the insurance business.
    Look at AR (to 31Mar18 ), top of page 7, to read all about it;

    "We have continued to build our investment into property,
    with the aim of securing strategic sites to extend our footprint
    or for reconfiguration of existing sites to drive improved retail
    experience for further growth. We have allocated a proportion
    of insurance reserves to support this property strategy as
    it achieves better utilisation of capital in the business, and
    improved insurance division returns."
    I saw that Greater Fool. Not saying you are wrong, although you might be. But I interpreted that paragraph differently. Instead of using a bank loan to develop a site, Turners are using insurance float money. They pay the insurance division a fixed interest return on that money while the site is being developed. Then the site is sold to a third party and the insurance division get their capital float back with interest: A lot more interest than they would have got had they plonked their float money in a bank account. But Turners shareholders are banking the development profit, not insurance policy holders! I don't believe the insurance division has any more involvement with the property after that.

    SNOOPY
    Last edited by Snoopy; 18-01-2019 at 06:04 PM.
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