2CC - 2 Cheap Cars Group

[percy]

Respect to Percy for his impeccable research on 2CC and backing himself to be “well positioned” You’re a legend Percy

Thank you,but I must thank other posters for their help and input.

[Rawz]

FND tick
2CC tick
TWR you’re up next

[Sideshow Bob]

FND tick
2CC tick
TWR you’re up next

Is there a 6 pack of craft beer and a bottle of something for the missus on a Friday night??

Think you've had a good week Rawz - well done!!

[Rawz]

Is there a 6 pack of craft beer and a bottle of something for the missus on a Friday night??

Think you've had a good week Rawz - well done!!

Yes definitely a few beers followed by a night cap tonight. You need to celebrate the wins in life otherwise what’s the point

[Rawz]

At todays price of 88 cents its trading on a P/E of 6.42 with $3.1m net cash on the balance sheet.

Fair multiple got to be min 8x so target SP is $1.10.

Happy to hold and collect a 13% div yield.

FY25 outlook:

The property strategy is a key growth factor for 2CC, with positive steps being taken to identify and develop new or better retail locations which benefit its scale model, particularly in Auckland.
Assuming favourable supply, currency and trading conditions, NPAT is expected to grow in FY25 by focusing on gross margin expansion, prudent cost management, increasing direct control of the value chain and sensible expansion in Auckland.

2 Cheap Cars Chair, Michael Stiassny said the FY25 outlook is strong, with the Company extremely well positioned in the prevailing economic climate.

[blackcap]

At todays price of 88 cents its trading on a P/E of 6.42 with $3.1m net cash on the balance sheet.

Fair multiple got to be min 8x so target SP is $1.10.

Happy to hold and collect a 13% div yield.

FY25 outlook:

[FONT="]The property strategy is a key growth factor for 2CC, with positive steps being taken to identify and develop new or better retail locations which benefit its scale model, particularly in Auckland.[/FONT]
[FONT="]Assuming favourable supply, currency and trading conditions, NPAT is expected to grow in FY25 by focusing on gross margin expansion, prudent cost management, increasing direct control of the value chain and sensible expansion in Auckland.
[/FONT]
2 Cheap Cars Chair, Michael Stiassny said the FY25 outlook is strong, with the Company extremely well positioned in the prevailing economic climate.

Fair multiple in my opinion is about 6. For many factors that I have alluded to before. Looks like we are trading at about a forward looking PE of 6. Sounds about right where we are now.

[Rawz]

Fair multiple in my opinion is about 6. For many factors that I have alluded to before. Looks like we are trading at about a forward looking PE of 6. Sounds about right where we are now.

I understand your position but with TRA trading 11x i think 2CC at 6x is unfair and especially considering earnings are expected to grow 8x is more fair.

The high div yield will help the SP and when we start going down the interest rate cycle the dividend yield will naturally contract as people search for income. Thus SP should appreciate with demand.

Its a solid hold with upside during these tough economic times.

[percy]

Since I started buying I have never stopped.
Even buying today.
No debt,cash on hand,equity ratio 59.28% strong balance sheet, positive cash flow from operations,stock they can increase or decrease quickly,selling right priced used cars they source themselves from Japan.Current assets 2.7 times current liabilities.Simple profitable business model,with growth prospects.
At 88 cents.Low PE ratio [6.28]and high dividend yield [gross 13.14%] beats every other NZ listed company.
At $1.25 share price the current PE would be 8.928 while the gross yield would be 9.248% and net yield of 6.65%
Deserves a PE ratio between 10 and 12 in my opinion.ie share price between $1.40 and $1.68.

[Rawz]

I wonder what steady state inventory is? Last year they said $10m is their target.
This year they finished with $13m. However they have expanded so need to carry more stock of course.

Any guesses what a normal stock level would be?

[percy]

I wonder what steady state inventory is? Last year they said $10m is their target.
This year they finished with $13m. However they have expanded so need to carry more stock of course.

Any guesses what a normal stock level would be?

"The property strategy is a key growth factor for 2CC, with positive steps being taken to identify and develop new or better retail locations which benefit its scale model, particularly in Auckland."

This may explain the build up in stock.