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

[Beagle]

Thanks mate. All the brokers do that terminal growth estimate with their DCF models because they have no show of accurately predicting the long term growth rate. Whichever way you slice and dice it a forward PE of 11.8 looks good value considering their current and projected growth rate. They need more runs on the board though. Once we have the election out of the way, some positive comments at the annual meeting and if things settle down a bit in Korea, all other things being equal we (at least theoretically) should see this starting to get traction.

[Snoopy]

Thanks mate. All the brokers do that terminal growth estimate with their DCF models because they have no show of accurately predicting the long term growth rate.

I remember buying into WHS quite a few years ago at about $4 after working out that with their expansion strategy in Australia they would be worth $8 per share about five years later. I was quite convinced of my growth figure modelling as I was using my expansion modelling based on experience of how the WHS had been rolling out all over NZ. What could possibly go wrong? The point here is that if you assume even a a modestly low growth rate in the low 10s ( i.e. not too outrageous) and roll it out over just a few years it is very easy to convince yourself that you have bought a 'bargain'.

Postscript to my WHS story is that I sold into the first stake building offer at $5 after about three years, so got away with a modest profit.

Whichever way you slice and dice it a forward PE of 11.8 looks good value considering their current and projected growth rate. They need more runs on the board though.

I think you have highlighted the issue. Talk is cheap, and Turners in its current incarnation is a very young company. Build 'runs on the board' and a re-rating will come.

SNOOPY

[percy]

It all comes down to businesses/people doing what they say they will do.
The proof of the pudding, will be there for us to make judgement, of whether we are correct or not, on our eps growth rate, on the 20th.
They will have had 5 and a half months trading,so will have a fair idea what the first 6 months will be like.
Watch for outlook comments.

[Snoopy]

It all comes down to businesses/people doing what they say they will do.

As much as company executives like to think they are in control of their business, there are always market factors outside of their control. So just because a CEO "does what he/she says he/she will do" does not automatically mean he/she is good. Likewise when a CEO fails their stated targets, that doesn't necessarily mean they are bad. A CEO can mitigate 'market hits' by having a contingency plan. Usually 'money in the bank' is a good contingency plan. But money in the bank can also be used for growth. The problem is money in the bank cannot be used both for growth and as a contingency at the same time. What we as shareholders should be looking at is a CEO with a plan that can change direction, should the market change direction.

Leveraging your financial strength will lead to faster growth. But it will also increase the chance of a fall should broad market forces turn against the sector in which the business operates. If you look at the 'bond covenants' that I have been discussing on the Turners Bonds thread, you will see that I have raised a red flag on leverage. Does this mean that TRA is in any trouble? No. But what if market conditions change and Turners Automotive Group become more stressed? This is a contingency a TRA share or bond investor must consider. Particularly so in a share that does not have the liquidity of a typical 'top 50' share (don't even talk about the liquidity of the bonds!).

The proof of the pudding, will be there for us to make judgement, of whether we are correct or not, on our eps growth rate, on the 20th.
They will have had 5 and a half months trading,so will have a fair idea what the first 6 months will be like.
Watch for outlook comments.

The current six months of trading (HY2018) I expect to be strong for profit growth. But you have to remember that these figures will include a six monthly contribution from Autosure (no contribution in the comparable half last year) and six months contribution from 'Buy Right' cars (three months contribution in the comparable half last year). So it won't be an 'apples with apples' comparison.

SNOOPY

[LAC]

I been slowly accumulating in these lows, will see how it plays out. I just see things looking good over the next 24 months and the current SP looks very good to me.

[percy]

I been slowly accumulating in these lows, will see how it plays out. I just see things looking good over the next 24 months and the current SP looks very good to me.

Agree, but think the next 10 years plus ,will be super rewarding for shareholders.
Growing eps will lead to growing dividends.

[JayRiggs]

Expecting an announcement on 1st quarter dividend any day now....

[Leftfield]

Mmmm interesting, trading halt and cap raise underway...

Turners Automotive Group Limited (NZX/ASX: TRA) ("Turners", the "Company") has announced a NZ$25 million equity raising through an underwritten placement of new ordinary shares in Turners (“Placement”). Turners has sought a trading halt from the NZX and ASX pending completion of the Placement.
The Placement has been fully underwritten at a fixed price of $3.02 per share.

[winner69]

Good positive move - obviously going to make heaps in next few years

Good bond holders can share in the cheap new ones







Snoops will need to redo his sums now.

[Beagle]

https://www.nzx.com/files/attachments/265725.pdf

Please review and comment. (Too busy on client work this morning to review).