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

[Joshuatree]

I will start a Consumer thread so we can debate pros/cons. Apologies for the hijack on here.

[winner69]

Perplexed is the correct adjective.

Should be ‘perplexed’ about the current share price

Trading at 1.2 times book value which is pretty reasonable for a company not making much of a return on its total invested capital (including debt). Some analysts might say not covering its cost of capital

Heartland for comparative purposes is at 1.3 times book value.

[percy]

Yet their nett interest margin is twice Heartland's,which in turn is twice the Australian Banks'.

[winner69]

Yet their nett interest margin is twice Heartland's,which in turn is twice the Australian Banks'.

Good stuff ....just as well it is as high as it is eh percy

Probably have higher bad debts as well

[forest]

[QUOTE=winner69;736649]Should be ‘perplexed’ about the current share price

Not making much of a return on its total invested capital (including debt). Some analysts might say not covering its cost of capital
QUOTE]

That is one of my dislike with TRA, as far as I can see the cost of capital and the return on capital are both hovering around the 5 to 6%.
For a while now I am trying to figure out why Percy likes this company so much. It looks like the answer is not coming to me just yet.

[percy]

Good stuff ....just as well it is as high as it is eh percy

Probably have higher bad debts as well

Not so.Turners as well as Heartland [Marac} have very few bad motor vehicle loans go bad.
Bad debts did increase with poor non-recourse lending via MTF.This has been rectified by Turners tightening their non-recourse lending citeria,so the "bad loans" are running their course.I think maybe another 6 months or so will see the end of them.TRA are no longer dealing with some MTF originators.
Also adding to Turners margin, Turners are no longer putting about $4mil a month of Turners originated loans through MTF.They are putting them through their own Oxford Finance.
From Market Screener TRA's ROE is 11.3%
'

[Beagle]

Not so.Turners as well as Heartland [Marac} have very few bad motor vehicle loans go bad.
Bad debts did increase with poor non-recourse lending via MTF.This has been rectified by Turners tightening their non-recourse lending citeria,so the "bad loans" are running their course.I think maybe another 6 months or so will see the end of them.TRA are no longer dealing with some MTF originators.
Also adding to Turners margin, Turners are no longer putting about $4mil a month of Turners originated loans through MTF.They are putting them through their own Oxford Finance.
From Market Screener TRA's ROE is 11.3%
'

12-18 months is the impression I got from the annual meeting as to how long those problematic loans will affect the company.

[couta1]

It amuses me looking at the depth chart over the last while, the SP just can't get any traction yet you have a long list on the sell side, not too savvy them sellers.Lol

[percy]

9 months was what Aaron said 3 months ago at the ChCh presentation.
As the agm was after the presentation maybe they revisited the time frame.
What is important is three fold.
1] Non recourse loans criteria tightened.
2]MTF originators sorted?
3]$4mil a month of TRA's originated loans now being put through Turners' Oxford Finance,rather than MTF, with resulting better margin for TRA.
What was not disclosed was the value of these poor loans,or the expected losses from them.
Disappointing,but lesson learnt.They woke up to the problem quickly so I take them as a "one off",and Turners "terms of trade" with MTF and their originators have been clarified.
I find it interesting that both Turners and Heartland now want to be involved right at the start of any loan application.The day of a third party [originator] OKing a loan and then passing it on to Turners or Heartland is over.This will result in even fewer poor loans.

[Beagle]

Huge rally in US markets overnight...wonder if this pup will finally bark... even a little bit ?