TUA - Turners Auctions. A Case Study.

[percy]

Not surprising, really. Top 20 holders account for a hefty 62.2% of the shares at last AR with only 10m shares left for us small players. I'd like to buy a few more too but unless one or more of the magnificent 20 decide to sell some I wouldn't think there'd be many on offer.

Last week a seller took all the buyers out down to $1.50 then there was a crossing.Approx 165,000 shares were traded.Buyers the reappeared and have taken small sellers out up to $1.65.

[percy]

Some sellers came out of the woodwork today at $1.65. This is I believe the highest price for TUA in over two years. The new car market is doing well and I guess investors are thinking there will be a trickle down effect to used vehicle trading. All very good news I think for we existing shareholders.

SNOOPY

Second hand cars sales usually follow new car lead.Still small sellers.With new two year high SP could be poised for "trajectory".With TUA also clipping the finance ticket it certainly is good news for us existing shareholders.

[percy]

Didn't take long for the seller/sellers of 13,000 shares at $1.66 to be taken out.!!!!

[percy]

A very good result.NPAT up 19% on increased revenue of 6%. 7cent divie payable on 20th Sept.
Last sale $1.73.

[winner69]

not too bad seeing basically a consumer discretionery stock eh percy

Consumers spending more again .... retail the place to be

[percy]

not too bad seeing basically a consumer discretionery stock eh percy

Consumers spending more again .... retail the place to be

Yes.6% rev increase excellent.However the 19% increase in NPAT means they are clipping the ticket more often.
No[well maybe] ,No, still not the place to be. [unless you are an online retailer]

[Snoopy]

not too bad seeing basically a consumer discretionary stock eh percy

Consumers spending more again .... retail the place to be

I find it interesting that there is often a reported disconnect between 'retail spending' and 'motoring spending'. Economists often remove changes in the price of petrol and remove changes in new car sales to get an idea of the 'underlying retail spending'.

I would argue that for most people having a reasonable car that goes well and isn't going to require huge injections of capital at the repair shop to keep it going is no longer a discretionary item. I would further argue that putting fuel into the said vehicle is not discretionary either.

Turners Auctions is probably the largest retail seller of cars in the country, at the non discretionary end of the market. I see TUA as a core part of my investment portfolio to be held through whatever flim flamming the wider 'retail' market suffers. It will take more than $1.75 to get me to part with any of my TUA shares!

SNOOPY

[tim23]

Nice rebound from $1.50 no special this time, hard to believe that GPG sold at about $1.20 to Milford even then price was at big discount to market price.

[Snoopy]

Buyers sitting at $1.49 and sellers at $1.57. TUA is riding the market volatility well.

Nevertheless couldn't resist putting TUA through my five year dividend flow valuation technique. The ordinary dividends paid out were as follows:

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2012F: 6cps, 6cps
2011: 6cps, 6cps
2010: 7cps, 5cps
2009: 0.4cps, 5cps
2008: 4.7cps, 2.5cps

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This gives an average net dividend yield of 9.72cps, which corresponds to a gross yield of:

9.72c/0.7 = 13.89c

Assuming an 8% gross yield over the business cycle is acceptable this implies a share price of :

13.89/0.08 = $1.74

Now the first half actual results are here time for an update:

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2012F: 7cps, 6cps
2011: 6cps, 6cps
2010: 7cps, 5cps
2009: 0.4cps, 5cps
2008: 4.7cps, 2.5cps

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This gives an average net dividend yield of 9.92cps, which corresponds to a gross yield of:

9.92c/0.7 = 14.17c

Assuming an 8% gross yield over the business cycle is acceptable this implies a share price of :

14.17/0.08 = $1.77

Actual closing market price yesterday was $1.77!

Not bad eh?

SNOOPY

[BIRMANBOY]

We stand (or sit) in awe at your astonishing capabilities....muffled clapping (must be snoopys blanket!) heard offstage left. Whats your average cost per share if I may be so bold? Ive been looking to load up for ages but it keeps up very well unfortunately (or fortunately I suppose). Maybe after the dividend goes will drop a bit. Historically has risen as it gets closer to dividend date so could continue up more yet.

Now the first half actual results are here time for an update:

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2012F: 7cps, 6cps
2011: 6cps, 6cps
2010: 7cps, 5cps
2009: 0.4cps, 5cps
2008: 4.7cps, 2.5cps

------

This gives an average net dividend yield of 9.72cps, which corresponds to a gross yield of:

9.92c/0.7 = 14.17c

Assuming an 8% gross yield over the business cycle is acceptable this implies a share price of :

14.17/0.08 = $1.77

Actual closing market price yesterday was $1.77!

Not bad eh?

SNOOPY