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  1. #3401
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    Quote Originally Posted by winner69 View Post
    Ok ...I’ve read it a bit more carefully ...but even though they say that equity has a cost I think they confuse the issue with that bit about the amount needed to be spent to maintain the share price so that shareholders are happy.

    Maybe that last bit confused you as well. I don’t know but your added comments although sort of make sense they don’t address the ‘cost of equity’ per se.

    To me that cost of equity is the risk adjusted return that a shareholder needs (to remain happy as investopedia says). Let’s say in Turners case thats 10% (for ease of calculating) then Turners essentially have a ‘cost’ of $21.4m.

    To save others getting bored I’ll PM you how I see Turners ROIC
    Winner, I find this ROIC most interesting so please share.

  2. #3402
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    Quote Originally Posted by forest View Post
    Winner, I find this ROIC most interesting so please share.
    Yes please share Winner, I am all ears too, especially where TRA are concerned.

    Wow looks like 280 not far away now with this kind of depth showing. Maybe the 25% will happen before the result.
    Last edited by blackcap; 23-11-2018 at 03:40 PM.

  3. #3403
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by blackcap View Post
    Yes please share Winner, I am all ears too, especially where TRA are concerned.

    Wow looks like 280 not far away now with this kind of depth showing. Maybe the 25% will happen before the result.
    Beagle bait plain and simple. Mrs Beagle told me today there's no point barking if no one's listening. Sometimes she is right, (she thinks she's always right
    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

  4. #3404
    percy
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    Quote Originally Posted by Beagle View Post
    Beagle bait plain and simple. Mrs Beagle told me today there's no point barking if no one's listening. Sometimes she is right, (she thinks she's always right
    She most probably is.
    Take care, big night tonight for howling dogs with the full moon........................lol.
    Last edited by percy; 23-11-2018 at 04:54 PM.

  5. #3405
    Speedy Az winner69's Avatar
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    Quote Originally Posted by percy View Post
    She most probably is.
    Take care, big night tonight for howling dogs with the full moon........................lol.
    Rises just after 8pm tonight
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  6. #3406
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by winner69 View Post
    Rises just after 8pm tonight
    Selfie of me howling about the Turners share price lol https://www.youtube.com/watch?v=esjec0JWEXU
    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

  7. #3407
    Speedy Az winner69's Avatar
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    Today is Fibonacci Day (on other side of world anyway as yesterday here) and as I love Fibonacci things and all things natural I had a quick look at the TRA chart

    Yes, my target of $3.23 (soon) is indeed a Fibonacci Retracement level (a 50% one as well)

    Looks like the ones are on my side ...$3.23 here we come ...+25%

    Spooky eh ...but nature really is a reliable indicator
    Last edited by winner69; 24-11-2018 at 08:29 AM.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  8. #3408
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    Hello everyone,
    I started investing in TRA last year shortly after the Hugh Green sell out in late June 2017, as I thought it provided a good entry point into what looks like a fundamentally very sound business.
    Since then, the share price has been in a gradual downtrend, despite the company posting what appear to be very solid financial results. In particular the FY2018 result in May. +33% net profit, +15% EPS growth. Positive commentary from board and management across all divisions. Positive outlook and increasing dividends. The FY2018 result seemed like the turning point and gave reprieve to the share price as it rose from under $3 to $3.20... alas that was short lived and we're now down even further to 2.63 and trading on a low PE of around 9.

    The past few months I've been really scratching my head over why TRA has significantly underperformed the NZX (even before the market recent correction).
    After doing a bit of research, I believe this could largely to related to a number of potential headwinds and disruptions to the traditional car dealership business model.

    The fundamental way in which people buy and own cars is going to change over the long term.

    - The average punter can now go and directly import a second-hand car from sites such as www.beforward.jp and save on the average 25% mark-up that dealers slap on the imported cars. The only reason you would go to a second-hand car dealer would be if you didn't have the finance and you need to pay it off in installments.

    - If we take a queue from overseas, we notice a new trend in car ownership happening. Most brands in the US now offer a 'subscription' based service, where you pay a monthly fee and take any car of your choosing from the yard. The traditional burden of buying, owning, maintaining, insuring etc is taken away from the millennials. This could catch on eventually to the rest of the world.
    Mercedes for example:
    (http://www.autonews.com/article/2018...il-dealerships)

    - We can also see this in full swing with the first-hand dealers as well. Some car manufacturers are slowly moving towards the Tesla model. You can only buy a Tesla from the Tesla stores. The next big manufacturer that is going in that direction is Toyota. Starting middle of this year, they have revamped the traditional commission-based dealerships.
    (https://www.stuff.co.nz/business/102...-sales-methods)

    - The most important disruption of all, is the electric car revolution. At the moment the electric vehicle penetration is less than 1%, but this is set to change rapidly as fuel prices go up. Environmental sentiment echoes louder. More people are becoming more aware of global warming and want to do their bit to reduce greenhouse gas emissions. In some countries, up to 30-40% of the EV's cost is subsidised. The Greens are wanting to bring this to NZ as well to encourage more people to buy first hand EVs:
    (https://www.greens.org.nz/news/press...ment-low-power).

    Adding to that, a large number of car manufacturers have indicated they are all committed to having a majority electric fleet only by 2025.
    (https://www.vox.com/energy-and-envir.../ev-revolution)

    - The key issues with buying second hand EVs is around the battery. The more an EV is used, the more the battery diminishes over time. The battery in EVs is the most important component.
    (https://www.edmunds.com/car-technolo...and-range.html)
    It is currently far more ideal to buy EVs first hand from the manufacturer, in order to get a fresh battery + the 8 year battery warranty.
    There doesn't seem to be much point in buying a second hand EV when it costs almost the same first hand if you take the Greens subsidy into account along with the additional risk of a diminished battery and possible lack of the original manufacturer warranty for the battery.

    I'm thinking that all these headwinds and disruptions are potentially causing uncertainties around the traditional car dealership model and hence weighing down on the TRA share price. All the tailwinds that used to be with car dealers appear to be slowly fading in a similar way to fossil fuel companies (like Z Energy). For sure the car dealers still have their place today and tomorrow. But it's the day after tomorrow that concerns me.

    What you guys think?

    Would be great to hear from Turners themselves to see how or if they plan to adapt their business models around each of the points above.

    disc: still holding TRA

  9. #3409
    Alley Cat Brain's Avatar
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    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.

  10. #3410
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by JayRiggs View Post
    Hello everyone,
    I started investing in TRA last year shortly after the Hugh Green sell out in late June 2017, as I thought it provided a good entry point into what looks like a fundamentally very sound business.
    Since then, the share price has been in a gradual downtrend, despite the company posting what appear to be very solid financial results. In particular the FY2018 result in May. +33% net profit, +15% EPS growth. Positive commentary from board and management across all divisions. Positive outlook and increasing dividends. The FY2018 result seemed like the turning point and gave reprieve to the share price as it rose from under $3 to $3.20... alas that was short lived and we're now down even further to 2.63 and trading on a low PE of around 9.

    The past few months I've been really scratching my head over why TRA has significantly underperformed the NZX (even before the market recent correction).
    After doing a bit of research, I believe this could largely to related to a number of potential headwinds and disruptions to the traditional car dealership business model.

    The fundamental way in which people buy and own cars is going to change over the long term.

    - The average punter can now go and directly import a second-hand car from sites such as www.beforward.jp and save on the average 25% mark-up that dealers slap on the imported cars. The only reason you would go to a second-hand car dealer would be if you didn't have the finance and you need to pay it off in installments.

    - If we take a queue from overseas, we notice a new trend in car ownership happening. Most brands in the US now offer a 'subscription' based service, where you pay a monthly fee and take any car of your choosing from the yard. The traditional burden of buying, owning, maintaining, insuring etc is taken away from the millennials. This could catch on eventually to the rest of the world.
    Mercedes for example:
    (http://www.autonews.com/article/2018...il-dealerships)

    - We can also see this in full swing with the first-hand dealers as well. Some car manufacturers are slowly moving towards the Tesla model. You can only buy a Tesla from the Tesla stores. The next big manufacturer that is going in that direction is Toyota. Starting middle of this year, they have revamped the traditional commission-based dealerships.
    (https://www.stuff.co.nz/business/102...-sales-methods)

    - The most important disruption of all, is the electric car revolution. At the moment the electric vehicle penetration is less than 1%, but this is set to change rapidly as fuel prices go up. Environmental sentiment echoes louder. More people are becoming more aware of global warming and want to do their bit to reduce greenhouse gas emissions. In some countries, up to 30-40% of the EV's cost is subsidised. The Greens are wanting to bring this to NZ as well to encourage more people to buy first hand EVs:
    (https://www.greens.org.nz/news/press...ment-low-power).

    Adding to that, a large number of car manufacturers have indicated they are all committed to having a majority electric fleet only by 2025.
    (https://www.vox.com/energy-and-envir.../ev-revolution)

    - The key issues with buying second hand EVs is around the battery. The more an EV is used, the more the battery diminishes over time. The battery in EVs is the most important component.
    (https://www.edmunds.com/car-technolo...and-range.html)
    It is currently far more ideal to buy EVs first hand from the manufacturer, in order to get a fresh battery + the 8 year battery warranty.
    There doesn't seem to be much point in buying a second hand EV when it costs almost the same first hand if you take the Greens subsidy into account along with the additional risk of a diminished battery and possible lack of the original manufacturer warranty for the battery.

    I'm thinking that all these headwinds and disruptions are potentially causing uncertainties around the traditional car dealership model and hence weighing down on the TRA share price. All the tailwinds that used to be with car dealers appear to be slowly fading in a similar way to fossil fuel companies (like Z Energy). For sure the car dealers still have their place today and tomorrow. But it's the day after tomorrow that concerns me.

    What you guys think?

    Would be great to hear from Turners themselves to see how or if they plan to adapt their business models around each of the points above.

    disc: still holding TRA
    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.
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

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