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

[ronaldson]

I opened a reasonable position via my company in TRA today at $3.35c cum dividend. Not sure if this is really a steal as sought, but I fortified myself that since the half year result announcement insiders spent $800k at $3.50 (see posts#7611 and #7613 above) and the tax paid yield on my purchase is 6.87% to underpin.

The vibe at the sharetrader meeting at Oyster and Chop earlier this month was positive at the higher price, but purchasers are hardly lining up as volume on the Buy side has been thin.

[Beau]

I opened a reasonable position via my company in TRA today at $3.35c cum dividend. Not sure if this is really a steal as sought, but I fortified myself that since the half year result announcement insiders spent $800k at $3.50 (see posts#7611 and #7613 above) and the tax paid yield on my purchase is 6.87% to underpin.

The vibe at the sharetrader meeting at Oyster and Chop earlier this month was positive at the higher price, but purchasers are hardly lining up as volume on the Buy side has been thin.

Bought a top up also at $3.35 yesterday, just building slowly over time to give that bit extra with those quarterly dividends. With Turners steadily opening new yards taking up market share looking good for future.

[Rawz]

Bought a top up also at $3.35 yesterday, just building slowly over time to give that bit extra with those quarterly dividends. With Turners steadily opening new yards taking up market share looking good for future.

I agree and Oxford should have better numbers in the coming years.

[BlackPeter]

I opened a reasonable position via my company in TRA today at $3.35c cum dividend. Not sure if this is really a steal as sought, but I fortified myself that since the half year result announcement insiders spent $800k at $3.50 (see posts#7611 and #7613 above) and the tax paid yield on my purchase is 6.87% to underpin.

The vibe at the sharetrader meeting at Oyster and Chop earlier this month was positive at the higher price, but purchasers are hardly lining up as volume on the Buy side has been thin.

Might be just the rising fear in the US markets ... however, it is worthwhile to remember that share trader members - as anybody else - get it sometimes right and sometimes wrong. While their picks are in some years quite good, in others they perform dismal. Unfortunately - one only can assess with the benefit of hindsight whether this particular feeling was an accurate one or one of the other sort ;

[Muse]

I opened a reasonable position via my company in TRA today at $3.35c cum dividend. Not sure if this is really a steal as sought, but I fortified myself that since the half year result announcement insiders spent $800k at $3.50 (see posts#7611 and #7613 above) and the tax paid yield on my purchase is 6.87% to underpin.

The vibe at the sharetrader meeting at Oyster and Chop earlier this month was positive at the higher price, but purchasers are hardly lining up as volume on the Buy side has been thin.

Hi Ronaldson - have been reading your excellent posts on a variety of companies these last few months with interest.

I rather like TRA as well and have been taking the occasional nibble as sentiment erodes the SP (and indeed buyer demand has been woeful). It's an interesting dynamic - investors like the share price at a higher price and buy then, but when it declines but still performs the same no one wants to buy.

I believe it's got an excellent management team, an excellent 'fit for purpose' business model (particularly in this environment), operating in an okay/goodish industry (car dealerships don't do much for me, but secured lending on cars and insuring them, does). Industry wide used car sales have dropped meaningfully this calendar year as new car sales rebounded as supply chains eased. But its been a classic case of TRA being able to open new sites and grow marketshare which has so far kept its aggregate sales more or less in line with 2021. The used car industry gets caught up in regulatory turbulence, both positively and negatively. Increased taxes on 'dirty' new & used cars starting 1 January will probably cap some of that new car demand and drive used vehicle prices up again. I admire that it owns and develops its own land which I think is critical for a business of this nature

TRA operates a very good car finance business and while arrears are very low and its credit performance has improved significantly in recent years its borrowing costs are only about 50% hedged so I reckon its very likely its NIM will get compressed and segment NPBT will fall. People will rightfully wonder about future impairments but worth remembering TRA still carries a ~$2m covid provision it can unwind to offset other macro related increases.

Its insurance business benefits in a rising interest rate environment which provides a natural hedge on the unhedged position in TRA's finance book. Finally it has a credit collection business which to me doesn't seem like a natural fit for the company but not a bad one to own, a bit countercyclical, but rather small.

I'd be delighted if the company could keep its npbt at ~$40m the next few years before reaching mgmt's $50m target in 3-4 yrs.

From my own portfolio's perspective, while TRA might not provide a 5 banga in capital value I do reckon it'll provide excellent imputed dividends that will grow in the medium term together with the prospect of modest capital value appreciation over the long term.

[ronaldson]

Thanks for the kind words FM.

I am an Auckland Branch member of NZ Shareholders Association, to acknowledge their efforts to enhance governance on the NZX and in capital markets, but also to participate in the regular visits to local listed entities that one dedicated member tries to arrange every couple of months. In October 2020 Covid meant the meeting scheduled with Turners occurred at the Yacht Club on Tamaki Drive and rather surprisingly Todd Hunter brought his entire management team to present to us on that occasion. Based initially upon that experience, I share your view about the quality of management, and the direction and diversity of what has proven to be a more resilient business than many might have anticipated given the pandemic circumstance (and you don't mention their car subscription activity which is embryonic but gaining traction, where you can rent a used vehicle by the month, which fills a niche between the standard short-term Avis/Hertz type hire and longer term vehicle leasing or lease to buy contracts, an example of leveraging attributes the business already had ).

When you have a national geographic footprint, as Turners has developed/is developing in NZ, you get maximum benefit from brand advertising such as the terrific Tina from Turners campaign, not available to competitors. And they are focused upon ensuring shareholders are rewarded via steadily increasing imputed dividends which seem reasonably secure, so very investable especially if income is important (and paid quarterly too).

In fact, I was inspired enough to purchase a small number on my wife's behalf that very afternoon and have followed the Company closely ever since. Looking back, the purchase price then was $3.45 so capital gain since has been muted/nonexistent, but I find such minor holdings whilst diversifying a portfolio only in the most nominal sense do cause a focus which can influence subsequent investment decisions with regard to that entity, so have extra value for that reason.

[Muse]

In fact, I was inspired enough to purchase a small number on my wife's behalf that very afternoon and have followed the Company closely ever since. Looking back, the purchase price then was $3.45 so capital gain since has been muted/nonexistent, but I find such minor holdings whilst diversifying a portfolio only in the most nominal sense do cause a focus which can influence subsequent investment decisions with regard to that entity, so have extra value for that reason.

Same same - the last few years have been doing this. Small enough that if it goes the wrong way for a period of time you it causes no bother, and when it goes well you feel positive about it. In either case, your future investment decisions will be all the better informed because you got just enough skin in the gain to get and stay interested and learn more about the company. It takes time to learn about a company and how the market perceives it...using the pea shooter first while saving the bazooka for later a strategy I reckon has merit.

[winner69]

TRA share price heading back to where it was 2 years ago


Hope it doesn't go sub 3 bucks

[Snow Leopard]

Keep an eye out for another inverse bell curve pattern developing.
The last one worked so well.

Disc: hold.

[winner69]

Keep an eye out for another inverse bell curve pattern developing.
The last one worked so well.

Disc: hold.

That's right Snowie ..... definitely check it out

Happy New Year to you ...cheers