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

[alokdhir]

5k traded today , fund's are busy buying

Wrote about week's volumes not hourly mate ...have patience ...Understand U are very short term trader so patience is not your forte ...

[percy]

www.chrislee.co.nz
This week's market news covers Turners.

[alokdhir]

Day 6 ....148K @ VW $ 4.67 ....TRA heating up ...

[alokdhir]

Day 7 ....158K @ VW $ 4.75 ...after all day long stand off ...still many retail are loosing patience and giving them easily .....

Volume need pick up ahead if expected numbers have to be traded before Friday close ...but SP is appreciating slowly ...may get a big burst soon !!!

PS : 100K crossover happened after close @ closing price !!

[ronaldson]

Not much fizz today, with 20k left on the table at the close at $4.80.

Seems like no urgency on the part of buyers so may have topped out?

[alokdhir]

Day 8 ....216K @ VW $ 4.778 ...Going well towards big Friday match session ....SP going up every day ...VW going up every day

PS : Till we get more then million vol days it cant top out easy ...imho !!

[Muse]

Day 8 ....216K @ VW $ 4.778 ...Going well towards big Friday match session ....SP going up every day ...VW going up every day

PS : Till we get more then million vol days it cant top out easy ...imho !!

Yes getting close and going to be an interesting one to put into my little database of all the NZX50 inclusions over the last several years (capturing price trends before the inclusion and after, together with how liquidity played a role in it). Will be interesting to see how it compares to the recent HLG experience. I see the later had an intra day peak at $6.94 on 8th of May, wound up 2 days later closing on $6.85 at the closing match the final day. It'll also be interesting to see how Turners' comparatively better liquidity (than HLG) feeds into the price dynamics. The required shares for inclusion were both roughly 2.5% of total shares, but Turners average daily volume in the 250 trading day sessions prior to the announcement, as a percentage of total shares, was about 1.3x that of HLGs. Likewise, it has a 'looser' / more available register. By that I mean while it has terrible liquidity and underrepresented institutional ownership it still has a lot more available large blocks and small insto holdings that are available to wrapped up into selling blocks, rather than HLG which had a true mum and pop share register.

I've a database of all the NZX50 inclusions and I started calling them index pops, which seems to have caught on. But I named it that because it illustrates both sides of the inclusion; the enthusiasm and price run leading to the inclusion, and more often than not level of reversion thereafter. Sort of like blowing up a balloon fast, and letting the air out fast or popping it. People tend to focus on the first, more fun, phase.

In my post #8122 on this thread I speculated as to how the ETFs go about purchasing their shares (and by instos we are really only talking about the Smartshares NZX50 ETF), which is just speculation, I don't know first hand how they go about doing it. I've talked to a friend who works overseas for Dimensional Fund Advisors and he said Dimensional purchase all their shares for index inclusion in the final closing match. I have a call with someone at Smartshares on how it works in NZ so will be interesting to learn more about it over here.

But in my post #8716 on the HLG thread I talked to the overhang/hangover factor in index pops. Clearly a lot of the volume in the many months, and weeks, ahead of an inclusion are speculative purchases looking to bag a quick gain. And often with high expectations and aren't necessarily committed long term owners. The excess shares traded above what is actually required for the inclusion, and the level of the price gain relative to the expected pop I reckon has a big impact on the the short and medium term price dynamics post inclusion. Or particularly when retail buy shares thinking the ETFs will be forced to buy from them when often in reality the ETFs are already sorted in advance. I reckon HLG had a 1.2m share overhang post inclusion (worth recalling for instance 1.74m shares traded on the final day, 260k more than the 1.482m shares required for the inclusion) which would have played a role in its steep reversal. I reckon a lot of people purchased with spec intent after hearing & thinking it was going to the moon and when it didn't they started selling fairly aggressively to avoid the downslope of the reversal.

Not saying that will happen here and but I think the market psychology of how these work is interesting and each one a good learning experience (and perhaps that is playing a role here so far too). From my core, dividend holding perspective, I wouldn't care too much if the price didn't pop as I place my value on price stability and predictable appreciation over the volatility. But of course, there is always a price. Only a few more sleeps.

ps will share some of my index stuff after the inclusion.

[alokdhir]

Yes getting close and going to be an interesting one to put into my little database of all the NZX50 inclusions over the last several years (capturing price trends before the inclusion and after, together with how liquidity played a role in it). Will be interesting to see how it compares to the recent HLG experience. I see the later had an intra day peak at $6.94 on 8th of May, wound up 2 days later closing on $6.85 at the closing match the final day. It'll also be interesting to see how Turners' comparatively better liquidity (than HLG) feeds into the price dynamics. The required shares for inclusion were both roughly 2.5% of total shares, but Turners average daily volume in the 250 trading day sessions prior to the announcement, as a percentage of total shares, was about 1.3x that of HLGs. Likewise, it has a 'looser' / more available register. By that I mean while it has terrible liquidity and underrepresented institutional ownership it still has a lot more available large blocks and small insto holdings that are available to wrapped up into selling blocks, rather than HLG which had a true mum and pop share register.

I've a database of all the NZX50 inclusions and I started calling them index pops, which seems to have caught on. But I named it that because it illustrates both sides of the inclusion; the enthusiasm and price run leading to the inclusion, and more often than not level of reversion thereafter. Sort of like blowing up a balloon fast, and letting the air out fast or popping it. People tend to focus on the first, more fun, phase.

In my post #8122 on this thread I speculated as to how the ETFs go about purchasing their shares (and by instos we are really only talking about the Smartshares NZX50 ETF), which is just speculation, I don't know first hand how they go about doing it. I've talked to a friend who works overseas for Dimensional Fund Advisors and he said Dimensional purchase all their shares for index inclusion in the final closing match. I have a call with someone at Smartshares on how it works in NZ so will be interesting to learn more about it over here.

But in my post #8716 on the HLG thread I talked to the overhang/hangover factor in index pops. Clearly a lot of the volume in the many months, and weeks, ahead of an inclusion are speculative purchases looking to bag a quick gain. And often with high expectations and aren't necessarily committed long term owners. The excess shares traded above what is actually required for the inclusion, and the level of the price gain relative to the expected pop I reckon has a big impact on the the short and medium term price dynamics post inclusion. Or particularly when retail buy shares thinking the ETFs will be forced to buy from them when often in reality the ETFs are already sorted in advance. I reckon HLG had a 1.2m share overhang post inclusion (worth recalling for instance 1.74m shares traded on the final day, 260k more than the 1.482m shares required for the inclusion) which would have played a role in its steep reversal. I reckon a lot of people purchased with spec intent after hearing & thinking it was going to the moon and when it didn't they started selling fairly aggressively to avoid the downslope of the reversal.

Not saying that will happen here and but I think the market psychology of how these work is interesting and each one a good learning experience (and perhaps that is playing a role here so far too). From my core, dividend holding perspective, I wouldn't care too much if the price didn't pop as I place my value on price stability and predictable appreciation over the volatility. But of course, there is always a price. Only a few more sleeps.

ps will share some of my index stuff after the inclusion.

Thanks Muse for your very informative post ...tried to give u positive feedback but system refused saying need spread it first !!!

HLG vs TRA similarity are few like retail stocks ie retail owned , low liquidity but most important difference imo is both at different cycles at inclusion time ...HLG was staring at bad times ...which all knew but ignored but now reality has taken over SP while TRA is doing great guns business cycle wise ...its eps is in uptrend thus its SP is well supported . Forbar had underperform rating for HLG during inclusion if I recall right while same FB has outperform for TRA with spot valuation of $ 4.48 ...it shud make a difference to the outcome too on this inclusion POP ...as HLG had very willing sellers while TRA will have reluctant sellers but then not all think too much ahead ..lol IMO if we have a POP in next two days of say $ 5 plus then it wont fall steeply afterwards ....if we dont have a POP and final match price is say $ 4.80 or less then fall afterwards will be very shallow and short-lived ....it has solid support at $ 4.60 after its results albeit index inclusion ahead must have played a role in keeping that support intact ...still I think it should / would be well supported around $ 4.30 for short term bottom after index inclusion done . At present its in no man's land for me ...not attractive enough to sell neither a bargain to buy ...at $ 4.30 is an attractive buy and above $ 5 its a reluctant sell

PS : All index funds will be buying in final match session of last day so as to do inclusions / rebalancing at closing price of the day to avoid index tracking errors

[alokdhir]

Excited about Day 9 ...no index funds buy before like many think ...they cant ...they need buy on closing price of last day to avoid index tracking error ...so TRA will be bought around 2.2 Mil on Friday match session .
But this info many traders / operators etc know ...so they accumulate to cater for that big demand on Friday match ...they supply the stock ...match price comes seeing how high is closing price coming out and how many sellers want to exit .
Even if traders / operators started accumulating in last 30 days which is a lot plus a punt on inclusion till its officially announced thus was risky ....only after official announcement it was a certainty of exit route on last Friday match ...30 days VW shud be about $ 4.40 maybe ....after announcements ie last 9 days shud be about $ 4.70 ...they will expect some profit too ...so add 5% for effort minimum comes to $ 4.95 ...then demand supply mismatch keeping in view its SP / EPS is in super uptrend for actual business reasons and not POP reasons etc ...

Overall positive for today and tomorrow ....today shud set the tone for tomorrow's massive match session !!!

[Rawz]

Good luck to those on the pop trade thingie. Will be happy to watch from the sidelines