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

[winner69]

If the shareholder equity is increasing every year doesn’t that increase shareholder value?

In theory yes but the market per se is the judge of shareholder value by way of giving it a market cap

Just before the Sept 17 raising of $30m Turners market cap was $251m

Even though Turners have raised $30m (making the company more valuable / richer) and reporting fantastic growth and profits and all those good things Turners market cap is about the same. The market as ascribed no value to that new capital and supposedly better future prospects.

Market Value Added is a good measure of value and how well a company is rewarding investors. It’s the difference between market cap and shareholder equity ...you can see the higher that is the more the market has rewarded investors / company for its efforts. Since just before that $30m capital raise Turners MVA has fallen by about $15m

That could be the market saying giving Turners heaps more cash to plsy around with might not have been such a good idea and we don’t have that much faith in them adding much in the way of value from that playing around.

But then again many on here will say the market is a stupid ignorant beast and has yet to grasp the potential that Turners offer in the future. Once they wake up and learn things will be different. Hope so

[hardt]

In theory yes but the market per se is the judge of shareholder value by way of giving it a market cap

Just before the Sept 17 raising of $30m Turners market cap was $251m

Even though Turners have raised $30m (making the company more valuable / richer) and reporting fantastic growth and profits and all those good things Turners market cap is about the same. The market as ascribed no value to that new capital and supposedly better future prospects.

Market Value Added is a good measure of value and how well a company is rewarding investors. It’s the difference between market cap and shareholder equity ...you can see the higher that is the more the market has rewarded investors / company for its efforts. Since just before that $30m capital raise Turners MVA has fallen by about $15m

That could be the market saying giving Turners heaps more cash to plsy around with might not have been such a good idea and we don’t have that much faith in them adding much in the way of value from that playing around.

But then again many on here will say the market is a stupid ignorant beast and has yet to grasp the potential that Turners offer in the future. Once they wake up and learn things will be different. Hope so

Automotive Retail / non-bank financial services and insurance hybrids are not known for being crowd favourites... I don't think they ever will be glossy enough for a lot of investors.

I am a very happy customer of Buy Right and I am not hating on Turners nor am I discounting the good job they have been doing leading into the peak of the cycle.

In the last year or two their financial services and insurance division continues to become a bigger part of their business, capital intensive on both ends with little room for error.

TRA.JPG

Aggregate market cap / net income for financials + insurance is 10x and for Auto Retail is around 15x, TRA is sitting around 11x.

[Snoopy]

In the last year or two their financial services and insurance division continues to become a bigger part of their business, capital intensive on both ends with little room for error.

Not sure that I agree with your above comment in the Turners situation hardt. Here is what Turners said after acquiring Autosure Insurance (p16 AR2017).

"The Autosure Insurance acquisition, including the Autosure brand, mechanical breakdown and payment protection insurance portfolios, was finalised as at 31st March 2017. This provides much needed scale for our insurance group , and focuses our underwriting effort on core products - MBI and Loan Repayment Insurance. We have a 10-year partnership with Vero for underwriting our comprehensive motor vehicle insurance policies."

Autosure was bought from Suncorp. But Vero, the underwriter of Turners Autosure is a subsidiary of Suncorp. So it looks to me as though most of the insurance risk has been outsourced to Suncorp, even though Turners has taken over the 'retail face' of the Autosure insurance business.

Moving on to 'financial services', there seems to be a big push to increased securitised loans. The securitized loan arrangement appears to be offloading capital risk, in the first instance to Turners TNRHB bondholders, via the "Turners Marque Warehouse 1 Trust."

So far from taking a large capital risk with little room for error, Turners are positioning themselves as a 'middle man', in which the largest risk is outsourced to other players. Smart operators, those guys/gals in the Turners management team!

SNOOPY

[percy]

TRA are big ticket clippers.
Sale of vehicle...……………..Ticket clipped.
Finance of vehicle...………..Ticket clipped
Insurance…………………………Ticket clipped.
Vehicle service...……………..Ticket clipped.
Development of sites...…...Ticket clipped.
MTF non recourse loans.....Ticket clipped
Debt management services,Ticket clipped.
More and bigger tickets to clip.

[Beagle]

TRA are big ticket clippers.
Sale of vehicle...……………..Ticket clipped.
Finance of vehicle...………..Ticket clipped
Insurance…………………………Ticket clipped.
Vehicle service...……………..Ticket clipped.
Development of sites...…...Ticket clipped.
MTF non recourse loans.....Ticket clipped
Debt management services,Ticket clipped.
More and bigger tickets to clip.

So...let me take a wild guess Based on the date and time stamp of that post. Fair to say there was agreement at your sharetrader dinner meeting that in an otherwise fully priced market Turners presents as outstanding value, best value on the NZX in your opinion at this point in time ?

[Joshuatree]

Looks like Input fatigue preceded by power of suggestion after pre dinner drinks has created valuation uncertainty which was defeated by convivial bias after the coffee

[winner69]

So...let me take a wild guess Based on the date and time stamp of that post. Fair to say there was agreement at your sharetrader dinner meeting that in an otherwise fully priced market Turners presents as outstanding value, best value on the NZX in your opinion at this point in time ?

TRA outstanding value - I hope so as put heaps of faith in you all, against my better judgement

But ‘investing’ in shares is akin to punting / gambling so why not take the odd punt and follow the tipsters like you get with modern day versions of Best Bets

[Beagle]

TRA outstanding value - I hope so as put heaps of faith in you all, against my better judgement

But ‘investing’ in shares is akin to punting / gambling so why not take the odd punt and follow the tipsters like you get with modern day versions of Best Bets

That's funny mate. Its like a never ending grand national steeplechase isn't it but its better than horse racing because you don't have the TAB taking a HUGE margin and the horses gallop once around the track every single business day and it never ends Not only that the dogs interspersed among the horses are pretty easy to spot and usually get tripped up after the first few hurdles.

Anyway..please excuse me, I'm probably a little over hyped on caffeine this morning.
Back in the real world now one thing I really do like about this one is the sweet poetic justice of being on the right side of ledger in terms of vehicle deals now, after all those years of being fleeced by car dealers.

[Joshuatree]

Im picturing steeplechase horses having to jump over ever higher fences not made of brush but made of spruiks lol

[percy]

So...let me take a wild guess Based on the date and time stamp of that post. Fair to say there was agreement at your sharetrader dinner meeting that in an otherwise fully priced market Turners presents as outstanding value, best value on the NZX in your opinion at this point in time ?

Total agreement...lol.