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

[Daytr]

I went to school with Todd a long time ago and played quite a bit of cricket with him. He was a year behind me but was mature for his age and was smart & always level headed. Not surprised he has done well for himself. Nice dividend returning stock and also not a bad P.E. either.
As the economy contracts and more money is sucked out to service mortgages, I wouldn't be surprised to see the 2nd hand car market do better than the new car market. Could be quite a good recessionary investment

[winner69]

BP ….suppose some see / hear only what they want to see / hear eh

Must be a scientific term for this (something better than rose tinted glasses)

[Rawz]

BP never been a believer in TRA. Maybe one day

[ronaldson]

Rawz (#7722) has appreciated perhaps the most significant comment in the presentation - that TRA is presently the 54th largest company on the NZX by free float market cap.

When you look at the effect of being admitted to/removed from the NZX 50 Index (eg HLG/ERD recently) then the potential for an upward realignment of the share price in this instance is quite high given TRA's ongoing expansion and underpinned by a regular dividend regime.

[BlackPeter]

BP never been a believer in TRA. Maybe one day

I just hope nobody here is investing based on "believe". I am certainly not - in any stock.

I invest based on facts and based on working assumptions. Working assumptions can be wrong or right, but you don't have to believe in them. To believe belongs (if anywhere) into church.

And hey, I didn't even say that I think TRA will turn out to be a bad investment (though I am not invested in them at this point in time), but your statement sounded like a declaration of love. I just tried to inject a bit of reality into the discussion. Please accept my apologies ...

While falling in love undoubtedly can be fun ... it means that the opportunities every stock has look flasher for the person in love, but it means as well, that they oversee the risks every stock has as well. Just do a statistical analysis of love stories. Some end up well, but most unfortunately turn to custard.

Love just makes it more difficult to come to a balanced (no, not that balance!) assessment, resulting later on often in unexpected (while overseen) surprises ... and these are rarely of the good sort..

But in a nutshell - while I was never a "believer"- there have been times I used to hold both Dorchester and later TRA (probably under one of their previous tickers). And yes, they always looked shiny and people did fall in love with them ... and yes, this opportunity to hold them did cost me a lot of money - so maybe I just learned my lesson and am ahead of you?

But then, maybe I learned the wrong lesson, so - who knows?

[Rawz]

I just hope nobody here is investing based on "believe". I am certainly not - in any stock.

I invest based on facts and based on working assumptions. Working assumptions can be wrong or right, but you don't have to believe in them. To believe belongs (if anywhere) into church.

And hey, I didn't even say that I think TRA will turn out to be a bad investment (though I am not invested in them at this point in time), but your statement sounded like a declaration of love. I just tried to inject a bit of reality into the discussion. Please accept my apologies ...

While falling in love undoubtedly can be fun ... it means that the opportunities every stock has look flasher for the person in love, but it means as well, that they oversee the risks every stock has as well. Just do a statistical analysis of love stories. Some end up well, but most unfortunately turn to custard.

Love just makes it more difficult to come to a balanced (no, not that balance!) assessment, resulting later on often in unexpected (while overseen) surprises ... and these are rarely of the good sort..

But in a nutshell - while I was never a "believer"- there have been times I used to hold both Dorchester and later TRA (probably under one of their previous tickers). And yes, they always looked shiny and people did fall in love with them ... and yes, this opportunity to hold them did cost me a lot of money - so maybe I just learned my lesson and am ahead of you?

But then, maybe I learned the wrong lesson, so - who knows?

I do love them for reasons said many moons ago, for a nice summary see FM post on the previous page.

No point looking too much in the past on this one. The business is just so different. So forget old lessons and certainly dont use a 10 year backward p/e ratio thingy. that will send you crook

[percy]

Todd Hunter presented well [as always] on this morning's NZX Webinar.

[BlackPeter]

No point looking too much in the past on this one. The business is just so different. So forget old lessons and certainly dont use a 10 year backward p/e ratio thingy. that will send you crook

Actually - the 10 year backwards PE is not even that bad (14.2) - and I might be even able to disclose that they are at the moment on my list of potential buying opportunities. Having said that - I don't know, whether (and when / if) I am going to promote them ... there are just so many other good candidates around.

I do agree that things have changed a lot for TRA, but maybe this is as well a thing making me a bit nervous .. if things can turn within 10 (well, 15 years) from near catastrophe as finance company and just surviving hospitality business over long grinder over hope and actually a great looking plan which however never worked over depression to currently something which currently brings money, I am wondering how suitable it might be as a reliable long term investment?

You see, things don't always get better when they change, and at the end of the day its still just a currently ok-ish going used car dealer with a finance company and a somewhat funny insurance attached.

No doubt, there will be ups and downs.

[Jonette]

Are you really sure about your ticks?



Last time I checked they had less than 10% of the market. They might be one of the bigger used car dealers - but dominant is something different.



Is this really true? Re customer satisfaction ... If you check their google reviews - they are at best a mixed bag. Not sure what widely accepted products and services means - yes, NZ is a country where its widely accepted to buy used cars (instead of new ones), but this has nothing to do with TRA.



Not quite sure, how you measure that. Do you just go based on the company presentations? I can't remember that they feature as top dealer in the consumer magazine and I can't remember any of my acquaintances recommending to buy there.

If I am on the market - their cars never made it even on my shortlist, and the couple of times I went there just to see what people on this thread are raving about, I was disappointed and again - they never made it so far that I even wanted to test drive any of the cars I've seen there.



True - last year (or couple of years) have been good for them economically (as for many other car dealers - have a look at CMO) -- but this was the Covid boom. In my view a bit thin a criterium to call them a "blue chip" ...

But anyway - no worries - I wish you luck.

I think you are doing yourself a disservice. Research is important:
1) Yes they have less than 1% of the market, only about 3000 cars for sale at any point in time, but a growing turnover rate. Quicker than anyone else in the market from my research
2)Customer satisfaction is measured pretty well by simply looking at Google Search history, they even publish their interpretation in their latest update (with a lot of license). From my research, Turners Cars searches 12 month MA is on a rise from about 80 to 140/month, Used cars is not a relevant search term with Trademe, but "2 Cheap Cars" ie NZAI is, falling from 240 to 150/month over the same period. I was surprised at this, but the name Turners is not as old as 2 Cheap Cars, showing the value of branding and change happens fast. A 6 month MA has both companies with the same 130 queries/month. Try the same search history for CMO, not enough data. BTW, Turners operate in the used Car market and this is a widely accepted product, even if I never buy used cars most people in NZ do.
3)Top Dealer? Well just to summarise; The dealer you selected, CMO currently have about 300 used cars for sale, they are of course primarily a new car business and Used cars is a side hustle for them. NZAI is a bigger listed car sales yard, this time a direct competitor with only used cars and operating under their own name, "2 Cheap Cars" unlike CMO - NZAI have 500-600 in stock usually, with bursts above 700, but currently at only 350, 10% of Turners.
4)You are a sample of 1 in your visit to the dealership. My guess is that you are not statistically minded to use your own limited experience as an indicator of the market. An interesting number for you, Turners sell 38,000 cars pa, they have a stock of about 3000 cars, so turnover is about 12.7 of monthly stock, ie they sell a bit more than their stock levels each month. I recall last year is was closer to 36,000pa, yet stock remains much the same.
5) The latest market update shows that Turners have performed well for at least the last 6 years - refer to the two charts on page 6, where it shows Turners growth in 3 year columns, both in profit and dividends. (note they say they pay dividends equal to 60% of profits)

[toddhunter]

That is very kind of you to say Daytr!