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- TRA - Turners Automotive Group [previously TNR - Turners Limited]
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25-11-2018, 03:49 PM
#3411
Nice post Jayriggs and nice to see someone take the bit between their teeth and try and understand TRA's woeful underperformance.
Add into the mix long term autonomous self driving cars and overseas survey's are showing many young people would rather own a smartphone than own a car. Good public transport in some overseas cities, uber, self driving cars and now people getting around en masse in cities on electric scooters. The world is slowly changing.
I keep an eye on AHG the largest vehicle retailer in Australasia. Its interesting to compare the two graph's and it would appear these long term developing trends are having a meaningful effect on both companies, with AHG in yellow getting based even harder with the ugly stick over the last two years, see attached comparison graph car chart.jpg
I think there's more too it with TRA. As Winner has correctly pointed out their ROIC is not great and eps growth this year will be minimal, if any. Then there's the fear of a recession in FY19 or FY20 and car companies have traditionally faired very poorly in a deep recession. The lack of liquidity is also off-putting for many and the chairman did himself and the company a tremendous disservice by not attending the annual meeting.
Last edited by Beagle; 25-11-2018 at 03:52 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
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25-11-2018, 05:16 PM
#3412
Originally Posted by Beagle
Nice post Jayriggs and nice to see someone take the bit between their teeth and try and understand TRA's woeful underperformance.
Add into the mix long term autonomous self driving cars and overseas survey's are showing many young people would rather own a smartphone than own a car. Good public transport in some overseas cities, uber, self driving cars and now people getting around en masse in cities on electric scooters. The world is slowly changing.
.
To be fair, NZ's topography and geography is not really like the rest of the world. Good public transport in NZ will remain a challenge for a while. But agree on a lot of the comments but there are opportunities for TRA here too. Even in the changing environment.
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25-11-2018, 05:20 PM
#3413
Originally Posted by blackcap
To be fair, NZ's topography and geography is not really like the rest of the world. Good public transport in NZ will remain a challenge for a while. But agree on a lot of the comments but there are opportunities for TRA here too. Even in the changing environment.
Without being tied to a new vehicle franchise model,Turners are able to take advantage of changing opportunities before all the others.
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26-11-2018, 12:48 PM
#3414
Interesting gap between bidders and sellers in relation to the last noted price ... but at least market appears to be optimistic
TRAdepth.PNG
Last edited by BlackPeter; 26-11-2018 at 04:09 PM.
Reason: problems with attached file
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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26-11-2018, 03:51 PM
#3415
Originally Posted by BlackPeter
Thinner than my hair.
offputting or providing liquidity premium?
For clarity, nothing I say is advice....
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26-11-2018, 04:16 PM
#3416
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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26-11-2018, 11:34 PM
#3417
My opinion is the challenges refereed to by JayRiggs are in the future and have only a slight influence on the current situation.
There is a world wide glut of cars with the situation worsened by Presidents Xi and Trump standing on the wharf demanding large payments for foreign manufactured cars. I know a country which will allow auto manufacturers to import as many cars as they like without tariffs. Those Kiwis who have observed the large number of new car advertisements on TV can probably guess which country I am referring to.
I would not be surprised if the head offices of car manufacturers have not rung their assembly plants and told them to quickly put the steering wheel on the other side and ship to New Zealand.
The affect of this diverts a segment of second hand car buyers to the new market and transforms the second hand car market from a cascading market to a clearance market.
Neither of these changes are necessarily of advantage to Turners.
Boop boop de do
Marilyn
Last edited by Marilyn Munroe; 26-11-2018 at 11:34 PM.
Reason: spelling
Diamonds are a girls best friend.
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26-11-2018, 11:43 PM
#3418
Originally Posted by Brain
After reading your carefully thought out post JayRiggs my question would be who are the sellers that have carefully thought out the future about the future of turners and come to the conclusion to sell based on one or more of your points above. My view is that 99% of investors are not that analytic nor that bright - posters on sharetrader are the exception of course and no disrespect is intended. Turners SP depreciation in my view is just general market pessimism and scepticism. In the absence of really good news share prices will continue to drop because the pundits are saying NZ shares are over priced and besides that the sky is going to fall in. At some point the attitude will change and it may change very quickly and TA cannot be relied on to predict it. I am not selling. I am relying on the board and management doing the right thing and after all that’s what they are paid to do.
I'd definitely be keen to know who's selling and what for. Or maybe they know something we don't...
I'm not selling either
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26-11-2018, 11:48 PM
#3419
Originally Posted by BlackPeter
Great post +1;
Looking into the trends you indicated I would however think that they are at this stage no threat to TRA - and might well turn into opportunities.
Subscription based service - basically the entitlement for a permanent but swapable rental: Looking at the examples you cited this service seems to be at this stage both unprofitable as well as very expensive (i.e. unaffordable to TRA customers). Just imagine a standard TRA customer coughing up between $1500 and $4500 per month for the entitlement to drive one (admittedly rather new, upper class and serviced and insured) vehicle. However - if this subscription becomes standard and profitable, than I'd say that Turners woud be ideally equipped to adopt and benefit from offering such a service. Pay $750 per month for a swapable maintained and insured middle of the road vehicle? Something I could imagine - and Turners should be an ideal company to offer this service. Lots of choice, and they have already insurance and workshops in their network.
EVs: Yes, I believe as well they might come faster than we think, unless they turn out to be a similar environmental flop than the biofuel disaster (nothing destroyed more tropical rainforest than the braindead idea of using biofuel. Huge parts of Sumatra, Bornea, Malaysia and Indonesia have been deforested to plant oil palms instead) - time will tell. I believe however that - if the EV idea gains momentum battery prices will drop fast, and than there is no reason why Turners couldn't offer e.g. 8 year old EV's with new or reconditioned batteries. No reason for them to go out of business ...
But yes - there is uncertainty, and markets don't like that. Could be a threat or could be an opportunity.
Yes some very good points BlackPeter. If a subscription service can be profitable for Turners - they can offer a mid market solution perhaps.
Would definitely like to see Turners take advantage of these opportunities.
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26-11-2018, 11:52 PM
#3420
Originally Posted by Beagle
Nice post Jayriggs and nice to see someone take the bit between their teeth and try and understand TRA's woeful underperformance.
Add into the mix long term autonomous self driving cars and overseas survey's are showing many young people would rather own a smartphone than own a car. Good public transport in some overseas cities, uber, self driving cars and now people getting around en masse in cities on electric scooters. The world is slowly changing.
I keep an eye on AHG the largest vehicle retailer in Australasia. Its interesting to compare the two graph's and it would appear these long term developing trends are having a meaningful effect on both companies, with AHG in yellow getting based even harder with the ugly stick over the last two years, see attached comparison graph car chart.jpg
I think there's more too it with TRA. As Winner has correctly pointed out their ROIC is not great and eps growth this year will be minimal, if any. Then there's the fear of a recession in FY19 or FY20 and car companies have traditionally faired very poorly in a deep recession. The lack of liquidity is also off-putting for many and the chairman did himself and the company a tremendous disservice by not attending the annual meeting.
I agree. Young people these days would rather buy a good smart phone and uber around than own a car.
Good point about autonomous self driving cars. Something Elon Musk and Tesla are working hard on.
Oh my goodness, AHG on the ASX. I was not aware of them. That chart really does look dreadful!
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