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

[RTM]

Thanks BP, you’ve summed up my confused thoughts !��

[winner69]

Doesn’t seem that long ago punters were paying a premium for the bonds because it seemed the hype was going to drive the share price way beyond 4 bucks.

Share price way off those expectations and about the same as it was a few years ago.

A casual observer would say something not quite right .....with the company that is

[percy]

Doesn’t seem that long ago punters were paying a premium for the bonds because it seemed the hype was going to drive the share price way beyond 4 bucks.

Share price way off those expectations and about the same as it was a few years ago.

A casual observer would say something not quite right .....with the company that is

Fully informed investors know the business is in great shape and its growth trajectory is on course.

[BlackPeter]

Doesn’t seem that long ago punters were paying a premium for the bonds because it seemed the hype was going to drive the share price way beyond 4 bucks.

Share price way off those expectations and about the same as it was a few years ago.

A casual observer would say something not quite right .....with the company that is

Well yes, they might say that. Problem is - casual observers are sometimes right and sometimes wrong. Remember the time when SUM was hoovering below the MA200? It is not that long ago, and just check where they are now.

[RTM]

Fully informed investors know the business is in great shape and its growth trajectory is on course.

Not sure I would classify myself as a fully informed investor, but I do want another 10-20k of Turner’s stock. That’s why I took up the bonds as the SP at the time was running away a bit. I didn’t pay a premium for the bonds. So I am trying to decide whether to convert the bonds, or simply take the money and buy what I want on market. I think I am leaning towards the latter. Especially as we have an unknown month to work into the strike price.

[Beagle]

Well yes, they might say that. Problem is - casual observers are sometimes right and sometimes wrong. Remember the time when SUM was hoovering below the MA200? It is not that long ago, and just check where they are now.

You can't compare a company that's grown EPS 45% per annum on average for six years with Turners. You can compare Colonial Motors with Turners.
I think the issue is that Turners MUST stop issuing new shares to fund their growth. I calculated on the weekend just approx. 4.5% eps growth forecast for FY19 this year because the estimated weighted average number of shares on issue for FY19, (assuming half bondholders convert to shares) is considerably higher than FY18. Maybe in FY20 they can grow organically and generate some decent eps growth without even more shares on issue or maybe this government sends us down a rat hole into a deep recession, who knows, but I think that's why the shares are trading on a forward PE of just 9.75. Maybe a bit cheap but try telling Colonial Motors shareholders that.

[James108]

You can't compare a company that's grown EPS 45% per annum on average for six years with Turners. You can compare Colonial Motors with Turners.
I think the issue is that Turners MUST stop issuing new shares to fund their growth. I calculated on the weekend just approx. 4.5% eps growth forecast for FY19 this year because the estimated weighted average number of shares on issue for FY19, (assuming half bondholders convert to shares) is considerably higher than FY18. Maybe in FY20 they can grow organically and generate some decent eps growth without even more shares on issue or maybe this government sends us down a rat hole into a deep recession, who knows, but I think that's why the shares are trading on a forward PE of just 9.75. Maybe a bit cheap but try telling Colonial Motors shareholders that.

4.5% eps growth is a good result if debt burden decreases (due to converting bonds to shares). Haven’t actually looked into this much though.

[Beagle]

4.5% eps growth is a good result if debt burden decreases (due to converting bonds to shares). Haven’t actually looked into this much though.

They're issuing a new tranche of bonds, $25m. Its okay...we hope for better things in FY20. Rome wasn't built in a day...and I guess there's always the possibility that FY19 guidance might be lifted at some stage, maybe with the half year result in due course ?

[BlackPeter]

You can't compare a company that's grown EPS 45% per annum on average for six years with Turners. You can compare Colonial Motors with Turners.

Well, you can - just depends what you want to demonstrate.

My point was: Given that even a gold star company like SUM had periods of quite ugly looking TA does it seems dangerous to assess a companies health just based on latter.

[Patient Panda]

Yes the underlying business is doing very well but they need to get tough on themselves and really commit to no more dilution.

Anyone knowhow difficult or what the chance of them improving their credit rating to get lower cost of capital is?