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

[Beagle]

Yes but since GFC my capital has increased about 400%.

So has the S&P 500 so you could have saved yourself an absolute truck load of work over the last decade and simply bought an ETF based on that index

[minimoke]

Yes but since GFC my capital has increased about 400%.

Thats a rear view mirror looking a long way back. I track my capital back decades - but its where I want it to be in 1 - 5 years that I am focussing on.

[percy]

Thats a rear view mirror looking a long way back. I track my capital back decades - but its where I want it to be in 1 - 5 years that I am focussing on.

Forward view is dividends increasing over 5% pa,and capital value of portfolio doubling in 3 to 5 years.

[Snoopy]

I agree the market is always forward looking but I think it is foolish to ignore the immediate past as that gives you the very best guide to the short term future.

I focus more on the medium and long term Beagle. With hindsight I should have redeemed my TRAHB bonds in cash and bought the shares on market this week (although I was pleasantly surprised to collect my November dividend on shares so recently converted). I should have been 'really mean' with my bid and bought on market at $2.57, not the $2.77 I did. But I find it is best not to be too focussed on getting my TRA shares at the absolute optimal purchase price. Rather I make sure I actually do get around to buying them at a yield that is acceptable to me. When the shares climb above $3.50, I won't be too worried if I bought at $2.57 or $2.77. If others can buy at an even better yield later good luck to them. I wouldn't have bought at the price I bought if I wasn't happy with the yield at my purchase price.

Some people are conveniently overlooking the fact that those problematic / delinquent MTF loans will dog this company for at least this and the next two half year reporting periods.

Bad MTF loans may take time to fully decay from the loan book, true. But with the big jump in provisioning last year ('Impairment Provision' up from $2.026m to $6.380m), I expect that new provisioning to cover multiple years of losses going forwards will not be needed. Unlike you, I don't expect any more MTF loan provisioning in the next 18 months. Consequently there will be no effect on profit going forwards.

They have a big site in Albany, I don't know how long the lease is or whether they own it but its a large site adjacent to the northern motorway and very poorly positioned in terms of attracting retail traffic. All good to talk about new sites and expansion but how many of these sort of more unfavorable sites do they have and how long does that legacy continue for ?

Pretty sure Albany is rented. I expect they will reconsider their occupation of the Albany site when the lease expires. Same thing with the 'Tower Junction' site in Christchurch. Turners are now looking for 'more land' and 'less buildings' (= cheaper rent) on the future sites they occupy. But at the Christchurch Road Show, Todd seemed to be equivocal on whether they move or not. They will only move if the right site comes up. They will let the lease(s) expire and see what is available. I detected no panic to move from either the Albany or Tower Junction site.

If the shares are such a raving bargain and the directors thought so when they were 30-40 cps higher why aren't they buying in decent or any volume now ?

As Winner has already noted, insiders aren't allowed to buy TRA shares until the half year results are announced to the NZX.

SNOOPY

[Snoopy]

Snoops — told you not to believe everything you find on the net, especially most things bags from investopedia.com

Simplest formula is ROIC = (EBIT x (1-Tax Rate)) / (Equity + Debt)

Equity + Debt added together make up the company assets. So the 'Winner ROIC formula' looks like an alternative to ROA ( NPAT/Assets ) albeit with the 'interest charge' removed from the numerator?

SNOOPY

[percy]

Bad MTF loans.
I think Turners would have acted already on these.Sorted the wheat from the chaff.
Non-payers would have had the vehicle repossed.
Slow payers would be watched and would have been advised to pay on time,or have the vehicle repossed.
Turners would have either been able to work with these people or acted straight away.
They certainly lost no time tightening their lending criteria and sorting out MTF originators,making sure TRA were involved at the start of any lending process.

[winner69]

Equity + Debt added together make up the company assets. So the 'Winner ROIC formula' looks like an alternative to ROA ( NPAT/Assets ) albeit with the 'interest charge' removed from the numerator?

SNOOPY

Snoops — Maybe it’s just a matter of semantics but to me your first sentence is incorrect


Then again I could / should have been a bit more concise and instead of ’Debt’ said ‘Interest Bearing Debt (and/or Borrowings)”

[Beagle]

Snoops, a lot of people have had a lot of positive things to say about Turners over the last year and yet TA has made them all look like fools. Directors could have been buying in the 290's, 280's or 270's before the close out period commenced but were conspicuous by their absence. I sold half mine during the rah rah road trip sessions when it became apparent there was almost infinite supply at $3.20 and another half (to sit on a quarter of original position) when it was $3. I am very pleased I took steps to mitigate my losses.

Lets see how it goes next week. I suspect there is vast volume's sitting in the wings to offload at around $3 so anyone hoping for a fast 25% gain is probably dreaming.

[winner69]

Lets see how it goes next week. I suspect there is vast volume's sitting in the wings to offload at around $3 so anyone hoping for a fast 25% gain is probably dreaming.

Bugger ....might just have to settle for 15% odd when I join this offloading at $3

One thing it can’t go any lower than what it is now so almost a risk free punt eh

[Beagle]

Bugger ....might just have to settle for 15% odd when I join this offloading at $3

One thing it can’t go any lower than what it is now so almost a risk free punt eh

What could possibly go wrong Opps...I vaguely recall some people saying it couldn't possibly go lower than the long term support at $2.80...and before that most people thought $3 was the floor. Where is the floor really ?

I can understand you rolling the dice at this level...odds don't look too shabby but probably best not to pretend its a one sided bet as quite a few people thought the same when the SP was higher. A downgrade could see this rapidly heading towards $2.00.