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Pendragon Share Discussion Threads
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|Nice to see the break from recent resistance. One sector that is in for a good recovery IMO, seriously cash generative and undervalued.|
|This from Citywire -
"Odey drives in at Pendragon
Hedge fund veteran Crispin Odey has added to his holding in car dealership operator Pendragon (PDG) following a slight recovery in its share price after it took a beating following the Brexit vote.
Odey increased his stake in the company from 204 million shares to 229.4 million, a 15.95% stake worth £72.7 million at a share price of 31.68p, down 32% over one year.
Most of the shares are held in the Odey Allegra International fund while the rest are distributed among other funds holding less than 3%.
While car dealers were hit hard by the Brexit vote they have since bounced back and in an interim management statement covering the period from July to 24 October, Pendragon said it did not see a noticeable change in customer behaviour.
In fact the company reported a strong third quarter, with a 6.3% increase in group underlying profit and a 5.7% growth in revenue compared to the same period in 2015. Chief executive Trevor Finn added that full-year performance would be in line with expectations. Analyst consensus for the stock is 'buy'."|
|Recovery looking good this morning|
The EU will have imploded by then - with a bit of luck|
|that's optimistic, more like 10 years at least to sort this mess out.|
|Another 30 months approx until the UK is post Brexit.|
|On the bright side, the company can buy back shares at lower price which will help boost eps (although only so slightly) and will reduce future future div payout on such buy-backs.|
|Brexit is to blame for the £ crash and the share price crashes for all domestically oriented business, not just limited to pdg. Look across all the domestic focused companies, from banks (lloy in particular), retailers (next, mks, dixons etc), all the builders, all the commercial properties, look, vtu, mars all the motor dealers, and many more.
Only the big internationally focused business earing $ profit, like pharms, oilers, miners, brewers etc are making the gains thanks to the crashing £. In $ terms even them are not making any big gains.
I wonder why the Brexiters are not BUYING the Great British considering that the post-brexit GB is so great in their vision.|
|Some rises against wider market falls today, not seen that for awhile.
One day does not make a trend as we know.|
|Car dealers and house builders are currently trading at historically low multiples despite the fact that all their numbers are still pointing to healthy demand.
Sooner or later the market will be proved right or these stocks will have to be re rated which means at least 30% upside.|
|The sector is being treated with extreme caution by markets,
the numerous capital raises during the last downturn do not help sentiment.
In very broad terms sector wide balance sheets look stronger than '07 before the last
financial crisis took hold.|
|Local HD dealership has a hopeless manager, where despite my having bought 6 Harleys in the last 2 years scuttles away whenever sees me. The staff are badly motivated and "apparantly" the sales team are not permitted to buy any big tourers.
The weekly BBQ was stopped on the grounds of food poisoning (this was untrue it emerged and simply a cost saving). The coffee machine has reduced the variety of coffees and there are recent incidents of important elements in the servicing of bikes that are neglected.
Having been a thriving place full of customers and potential customers it gradually and very very slowly had a dwindling footfall. Feel somewhat embarassed that I will be pounced in by a bored salesman if I go in there. I don't any more. But I am looking to buy another new HD.
The group have closed at least 1 HDdealership plus a Triumph one.
All smacks to me that this company is a mess and is doing its very utmost to go bust. The kiss of death will be to lose the LR dealership in the heart of the LR manufacturing empire.
Methinks the company want to go down the car supermarket route to compete for the bottom of the pile.|
|Rating looks about in line with the sector.
6-7x approx atm.
The exception is Inch which has a different business model.|
|Yes, the City really doesn't seem to 'like' PDG. I've noticed a similar thing with MARS. I wonder whether they're being punished for past misdemeanours? Both companies encountered balance sheet issues following the 2008 crash and sought to fix them by deep-discounted and highly dilutive Rights Issues (PDG issued 9 for 8 new shares at 10p) which upset a lot of institutional holders. Both have struggled ever since to get a decent rating despite the fundamentals, and there's a sense that the City is getting its own back.|
|Don't know why this is so unloved. Is it just the malaise affecting all consumer-oriented stocks at present?
Good TS today:
-- Revenue grew by 5.7% on a like for like basis with used revenue growth accelerating to 8.3%
-- Aftersales gross profit grew by 3.2% on a like for like basis
-- Used gross profit grew by 0.5% on a like for like basis
-- New gross profit increased 4.2% on a like for like basis
-- Overall in the quarter, underlying like for like profit before tax increased by 6.3%|
|Oh, I see.
|Vulnerable to takeover at this level?|
|I don't know. Vulnerable to what?|
|This one is vulnerable- anyone agree with this point of view?|
|As an Evans Halshaw aftersales employee I can safely say the company is incredibly badly managed from the top we have a call centre paid on number of bookings so they call and badger customers of 6 month old 2000 mile cars to come in for free health checks no chance of any profit after a tech getting paid a min of £8 an hour spends 20 mins checking car and paperwork and car is washed at my location the competition have worked out we take any booking and send their low paying warranty work to our dealer properly managed we could do 3/4 of the work for double the money this is not laziness this is rant about how we all could be better off|
|I am very much of the same view as expressed in your final 2 paras. My patience is stretched, though, by the idea that as a cyclical business, if this is what the 'good times' look like, what about the bad?!|
|Yes, Jeffian. I guess traders are voting for their expectation of a fall in the sales rate of new cars in the UK. The sector is cyclical without Brexit, and Brexit has yet to take place.
I'm holding but did sell a few when they announced the share buyback plan. Imv, they should have paid down their debt and/or tried to buy the freeholds of their leasehold premises. They could have made the business more recession proof. Instead they are using the net cash flow to boost eps ...... vanity over solidity.
Still holding because I don't expect a big Brexit impact and because aftersales work (from which much of the profit is derived) and used car sales should both hold up much better than new car sales in any downturn.
Dividend is good and, imv, patience should be rewarded on longer term view.|
|I find this share rather frustrating. It seems immune from the good news which persists over car production and sales. It isn't just Brexit; it's been languishing since the turn of the year.|
|Yes, Typo56. Good call. 18.7 Million shares traded in the closing auction.
Closed at day's high of 31.8p, so maybe we'll see a further rise next week.|
|Ta, Typo56. Yes it's looking a bit volatile even now (dropped quickly by 2% and then heading up again).
Current year p/e ratio? 7.5? If the Brexit thing goes without disruption to the sector, current share prices will have been bargains. Some investors are reducing exposure - fair enough. My view, fwiw, is that even if there is some short-term disruption, the car dealers should come through it. The UK will continue needing cars and the servicing of them.
Edit: Bought some at a whisker over 30p, btw. Assuming the UK doesn't hit a big downturn, I should be ok with that investment, even if Brexit issues bring further volatility.|