AML - Stock Market Listing

[hornbaek]

Its UK only, but we have to assume that it is AML’s largest market but you are spot on regarding valuation - it simply doesn’t add up.

In a way I am less concerned now after the bond issue got away, because before that I really could not see how they would fund the development plan. The fact that bond has been issued tells me, that somebody (externally) has scrutinised the figures and got it placed among investors.

[RobDown]

tigerkoi said:

I welcome a different point of view but after extrapolating those numbers out I find it hard to see there’s a £5bn valued company behind them. Let alone a £2bn one.

Here you go:

1. Sales figures were already disclosed in FY results. So it’s already “known” by the market. Actually volumes were not a major concern (margins more so).

2. As Jon says it’s UK only. I think i posted the geographic mix of sales a few pages back, the UK is an important market clearly for AML. But others are overtaking

3. That list isn’t complete - is the data for the Vanquish Jon? And of course the mega margin is in the “specials”; some zagatos and DB4 GTs were delivered in Q4 I think

Finally I’d just be wary of extrapolating too much from one quarter. Jon will know better than me but I would guess Q4 is seasonally quite, I think there were some production delays and of course who knows what impact the model range rollouts is having (positive or negative to a given quarter)?

[tigerkoi]

RobDown said:

tigerkoi said:

I welcome a different point of view but after extrapolating those numbers out I find it hard to see there’s a £5bn valued company behind them. Let alone a £2bn one.

Here you go:

1. Sales figures were already disclosed in FY results. So it’s already “known” by the market. Actually volumes were not a major concern (margins more so).

2. As Jon says it’s UK only. I think i posted the geographic mix of sales a few pages back, the UK is an important market clearly for AML. But others are overtaking

3. That list isn’t complete - is the data for the Vanquish Jon? And of course the mega margin is in the “specials”; some zagatos and DB4 GTs were delivered in Q4 I think

Finally I’d just be wary of extrapolating too much from one quarter. Jon will know better than me but I would guess Q4 is seasonally quite, I think there were some production delays and of course who knows what impact the model range rollouts is having (positive or negative to a given quarter)?

Thanks Rob, and you’re right - the data is heavily caveated and there are parameters around different market strengths and the “mega margins” as you say. I appreciate that.

But, and it’s a soft point, but do you think the volumes (and margins) coming out the door really correlate to a multi-billion dollar outfit (yet)?

I really want AML to do well, so not doing it down, merely trying to look at how thick the crust is.

[RobDown]

I think it’s very DBX dependent. If you look at Porsche it’s the Cayenne that makes the money. AML will hopefully see the same success. Fingers crossed

[AMVSVNick]

RobDown said:

I think it’s very DBX dependent. If you look at Porsche it’s the Cayenne that makes the money. AML will hopefully see the same success. Fingers crossed

Having seen it I really think it will succeed. Needs to be at the correct price point though, which, if what we were told is correct, it will be, IMHO.

[RL17]

Future potential is where the value is......

Tesla $47 bn ( a while back it was higher at a higher valuation than BMW)

BMW Euro 48bn

Daimler AG Euro 59bn

Ford $37bn

Ones heavily loss making and is clearly not a volume producer and struggling with late Model 3 orders and all the others are facing EV/driverless cars/statutory in car speed limiters and Far East technology and population growth and middle class growth there. Even despite slowing China growth (it's still 6% or so if accurately forecast). Dyson going to Singapore for car venture for a reason.

Over £150bn of value in just these companies above for a market/product being subject to vast changes.

Ferrari at $21bn (on 9,251 units in 2018) So Ferrari valued at £16bn (or over £1.7 million for every car they sold last year).

So Jon's thread on IPO being a diversion (management time and costs certainly at the moment) and a takeover threat.......

Need some recovery over 2 years or a cheap trade exit to become a full silhouette AMG might be possible.

Lets hope not
Reg

[Jon39]

RobDown said:

Here you go:

1. Sales figures were already disclosed in FY results. So it’s already “known” by the market. Actually volumes were not a major concern (margins more so).

2. As Jon says it’s UK only. I think i posted the geographic mix of sales a few pages back, the UK is an important market clearly for AML. But others are overtaking

3. That list isn’t complete - is the data for the Vanquish Jon? And of course the mega margin is in the “specials”; some zagatos and DB4 GTs were delivered in Q4 I think

Finally I’d just be wary of extrapolating too much from one quarter. Jon will know better than me but I would guess Q4 is seasonally quite, I think there were some production delays and of course who knows what impact the model range rollouts is having (positive or negative to a given quarter)?

One interesting point (or perhaps it might be, if we didn't have the usual annoyance of DVLA figures being UK only) the AML numbers are sales from factory to dealers, whereas the new registrations exclude unregistered dealer cars.

Here is a quick copy showing Vanquish and 'old' Vantage (UK 4th quarter 2018)

The DB4 GTs I don't think are road legal, so DVLA would not be involved.

VANQUISH S V12 AUTO = 9
VANQUISH S VOLANTE V12 AUTO = 3
VANQUISH ZAGATO SPEEDSTER AUTO = 1
VANQUISH ZAGATO V12 AUTO = 2

VANTAGE AMR V12 = 2
VANTAGE AMR V8 = 1
VANTAGE AMR V8 AUTO = 5
VANTAGE AMR V8 ROADSTER AUTO = 2
VANTAGE GT8 = 1
VANTAGE S V12 = 3
VANTAGE S V8 = 2
VANTAGE V8 = 1

Yes, lower numbers are usual in the 4th quarter.

The initial production for the Vantage showed during the 3rd quarter = 215.
For a brand new model, would have expected similar in 4th quarter, because AML mentioned a full order book, but it was 4th quarter = 107. Perhaps they gave priority to export production.

[Jon39]

We have recently been debating the usefulness and accuracy of City brokers company forecasts.

For your information, J P Morgan have today published a recommendation (closing price 937p).
'Aston Martin Lagonda: JP Morgan reiterates overweight with a target price of 1.500p.'

Their previous recommendation was on 1st March 2019 (closing price 1,070p).
'Aston Martin Lagonda: JP Morgan reiterates overweight with a target price of 1,800p.'

( I expect you already know, but an overweight holding would be a shareholding worth more, than most of the other company shareholdings in your portfolio. )

[RobDown]

Overweight means ‘Buy’. Underweight means sell. There’s usually some tedious compliance reason as to why you don’t use Buy/Sell

In JP Morgan’s defence at least the rating is consistent. But naturally the valuation will move up/down depending on changing macro circumstances. In the negative category JP Morgan has dumbed down it’s equity research department quite a bit in the last 12 months, getting rid of experienced analysts and replacing with juniors/Bangalore off-shoring

[Jon39]

RobDown said:

Overweight means ‘Buy’. Underweight means sell. There’s usually some tedious compliance reason as to why you don’t use Buy/Sell .....

I am puzzled Rob.

You explain a change to the meaning of those words, but Deutsche Bank are quoted as still using the (presumably now) old convention words, 'Buy and Hold'.

(broker) Deutsche Bank - (date) 08/04 - (rating) Downgrades - (previous assessment) Buy - (latest assesment) Hold - (latest target) 1,000.00p.

[RobDown]

It’s really more a question of what you’ve agreed with the regulators; you have to define a rating system with them in advance.

Overweight makes sense in the context of an institutional portfolio manager where you’re essentially advising him to have a greater-than-benchmark weight in a particular stock

To be honest most institutional investors tend to ignore the ratings and price targets put on by analysts; they have their own thinking on that. They’re more interested in the ideas in the report

In the good old days you used to see nonsense ratings from the likes of Merill Lynch with things like “short term buy, long term sell”. The analysts got splinters from that

[Jon39]

Are these the same financial Regulators, who in 2006 and 2007, when I and many others thought Northern Rock were crazy offering 125% mortgages, did not take any action?

You might share my opinion, so don't answer that Rob.

[RobDown]

Oh don’t get me started on the regulators!!! Too many horror stories to tell. Asleep at the wheel would be the kindest interpretation. They had absolutely no clue what was going on even during the middle of the crisis (we could tell from the irrelevant questions they were asking).

As for that idiot Mervyn King...

[Ken Figenus]

RobDown said:

I think it’s very DBX dependent. If you look at Porsche it’s the Cayenne that makes the money. AML will hopefully see the same success. Fingers crossed

Saw a DBX in the flesh at Silverstone yesterday. Big. It's definitely Cayenne+ size and not Macan which is Porsche's even bigger moneyspinner. DBX will likely be twice the cost of a DD Cayenne though - suggests the haunts of Sloane Square rather than proliferating the 'nicer parts of towns' suburban driveways?

Fascinating discussion here mind - always wondered about the machinations in banking/IPO/equities. But even at £9.34 today as a 4/5 yr hold I'm still too nervous!

[Jon39]

I watched the video on the AML website (Q4 Investor Results Call).

Some interesting comments by AP about the sequence of initial production of the DBX.

There was also a question from a brave person about the new Vantage. "... doesn't quite have market traction, what can you do to relaunch, reposition or restyle?"

AP replied to that question saying, "We do see different speeds of adoption, but we seem to have hit the sweet spot particularly with the lease price point in the US. We don't see the style of the car being an issue, we see it as a strength".
He then spoke about the big price jump that previous model owners faced when moving to the new model, but will use the (lease) lessons from the US in Europe, where the take up has been softer.

[AstonV]

Jon39 said:

We don't see the style of the car being an issue, we see it as a strength".

I imagine he has to publicly say that. Can't imagine that's being said behind closed doors. Had the can been a hit, they wouldn't need zero interest leases to move it, even with the price increase.

[Jon39]

Ref. Vantage.

AP - "When you see the Roadster, I think it will answer some of you questions perhaps on the style of the car."

Do you think that might mean styling changes, which will be unique to the Roadster model, because any 'facelift' changes now to the Coupe, will obviously upset the customers who have already purchased?

[Bobajobbob]

RobDown said:

Oh don’t get me started on the regulators!!! Too many horror stories to tell. Asleep at the wheel would be the kindest interpretation. They had absolutely no clue what was going on even during the middle of the crisis (we could tell from the irrelevant questions they were asking).

As for that idiot Mervyn King...

The National (in)competent authorities have been the bane of my life for the past few years. I'm very much looking forward to a meeting tomorrow to constructively discuss why having a committee of non native English speakers draft a regulation in English for a fixed income markets by applying principles from the equity markets might lead to ambiguity, confusion and ultimately huge cost and confusion for all those directly impacted.

[Jon39]

For those of us who are interested in the business part of Aston Martin Lagonda, the 1st quarter results have been announced by the Company today.

https://www.astonmartinlagonda.com/investors/resul...

[jonby]

Even though I'd be breaking my own rule about personal direct equity investments which I imposed upon myself when I left the market 23 years ago, I have to say when the price dropped to £10 it was very tempting. I see the price has now dropped even further to £8.

Assuming the company doesn't literally collapse, surely in the medium term it cannot be a bad buy at less than half the float price ?