Vertu Motors Share Discussion Threads

[blackhorse23] 12/12/2022 08:54

Added some CURY (LSE) today & monitoring here for further trading updates

[clive7878] 11/12/2022 14:53

I agree that buy backs at the right price may be good to do,
but buy backs rarely lower the pe ratio to make a difference,
and the company could have spent millions in doing so.

[rabiddog] 11/12/2022 09:59

If a company has excess cash and wants to return value to shareholders then share buy backs or special dividends are options. Share buy backs are arguably easier to administer and are definitely more tax efficient. I’d prefer the company to invest internally but that isnt always an option.

[sleepy] 10/12/2022 22:31

kenmitch - you raise a very important issue. Can you give any pointers to Morgan Stanley’s research please?

[m_kerr] 10/12/2022 17:42

saying a vertu buyback is bad, using the examples of whitbread or abrdn buyback being bad decisions is like saying 'buying shares in vertu is a bad idea because i bought shares in whitbread and abrdn and they both lost money'. clearly one has nothing to do with the other but that's what the logical conclusion from what you said.

[clive7878] 10/12/2022 16:19

Buybacks do not have a significant difference to the people ratio as companies need to spend a fortune to do so. Better giving a higher or special divi or buying another company like vtu has done.

[kenmitch] 10/12/2022 11:25

m_kerr

Isn’t it those so keen on buybacks who don’t understand them?

After all it’s the consequences of those buybacks that matter. If the share price subsequently does well we cannot know whether that would have happened anyway.

And there’s a wealth of evidence where buybacks were a terrible waste of money and NOT the supposed “reward to shareholders” that buyback fans seem to think they are!

e.g Whitbread spending the entire near £3 billion they received from their sale of Costa “returning that cash to shareholders” but where the share price fell at once and has never got close to those buyback prices since.

Or Aberdeen who have been buying back for years all the way down from starting at £5 to just 140p until recently.

Or detailed Morgan Stanley research showing that Companies buying back subsequently underperformed Companies in the same sector not buying back.

Or Investment Trusts buying back to reduce the discount to NAV only for that discount to then widen a lot more ……etc etc etc etc

So spend spare cash on dividends instead or on wise new investments/investing in the business. Agree that sometimes those new investments acquisitions are also unwise, and that might prove to be the case with Vertu this time. But competent Management DO invest wisely, whereas Managers who buyback often seem to do so because they lack the imagination or skills to invest wisely.

And Managers like buybacks because buybacks do mean eps is higher (though that doesn’t automatically mean higher share price) and so often Director bonus payments are based on eps performance and NOT share price performance! So buybacks DO reward Directors but they often punish shareholders! And the shareholders who do best out of buybacks are those who sell and take advantage of the willing buyer…..I.e The Company buying back.

[blackhorse23] 10/12/2022 08:55

https://www.msn.com/en-us/money/companies/a-major-car-company-is-going-bankrupt/ar-AA1565pV?li=BBnb7Kz

[m_kerr] 09/12/2022 23:14

i've been consistent in my view - see post from a few weeks back. it's remarkable how poorly understood buybacks are.

'easy to get carried away and start empire building, but they shouldnt be buying any dealerships at the moment IMV, the exception to that being buying out the freehold of properties they rent. they won't be getting bargains when the sector is flush with cash.

they should be returning capital, either through share buybacks of dividends. even the ordinary dividend is peanuts to them, something like £5-6m per annum.'

[buffalobillnuts] 09/12/2022 21:47

Microscope 🤣🤣👍

[microscope] 09/12/2022 20:41

Ah yes you sold though didn't you Kerr. Straight in with the deramping.Poor form.You'd rather they did a buyback and hobble along with no ambition.Not what you were saying a few weeks ago.Lol lol lol.

[m_kerr] 09/12/2022 18:17

it's a very poor deal in capital allocation terms for vertu. instead of buying their own stock at 30% discount, they buy a company at a 30% premium.

[rabiddog] 09/12/2022 13:45

Don’t want to hog this thread for non vtu. Slp is a direct play on PGM and especially Rhodium, most forward looking prognosis are positive. They have careful management, bit like VTU, and hugely cash generative. I’ve just picked up a special dividend of 8p

[clive7878] 09/12/2022 11:36

Is not PDG a reasonable buy at 20.3p now - is the question ?

Realising that timing is sometimes more important than what one buys,
should one be selling ang then buying back comes to mind.
Missed opportunities to enhance profits.

Will not PDG rise back to 24p ?

Current problem is the financial state - although Sunak is I believe doing a good job - and petrol is drifting downwards - people are going to be hit hard with higher mortgages, and 14% food inflation, and higher energy costs is going to lessen disposable income.

Load Group is now out of the frame - but what about SLP and Just which is around 72p with broker forecasts of 115p ? Was 62p slipped to 56p up to £78p now around 72p.

The share price seems to hang around with VTU at a price for a while then - bang - it has drifted further down yet again.

[microscope] 09/12/2022 10:58

Yes Clive, while many have wondered about Hedin's motives for a while, the last 24 hours has proved conclusively that regardless of what you or I, or indeed anyone else, says or thinks about the VTU purchase, the market prefers deal makers to deal breakers.And for those mumbling against the VTU purchase, the company has acquired a property portfolio worth 65-70 million, and thereafter paid 50-55 million (plus interest) for 18.1 million of profit.I believe the correct phrase is 'Cheap as Chips!'

[alter ego] 09/12/2022 10:33

OT but LOAD paid a dividend in June and in November this year.

[clive7878] 09/12/2022 10:31

Alter ego - did see that later - missed out on that one - rising share price but had not paid a divi in 3 years.

[clive7878] 09/12/2022 10:29

Hedin does notintend now to bid for PDG
announced this morning - share price down from 27 to 21.

[alter ego] 08/12/2022 22:49

Clive7878 looks like there’s a bid for LOAD being announced in the morning.

[rabiddog] 08/12/2022 20:40

Vertu and Slp my 2 biggest single holdings. Both cash rich and quality outfits

[clive7878] 08/12/2022 19:47

Hopefully we will see not just a bigger company but economies of scale & a more efficient company as well and more value to shareholders.
The problem with share buy backs is that companies have to spend so much money to make a dent in the pe ratio to have much of a difference in share price.

Any thoughts on Just and SLP and Load

[microscope] 08/12/2022 18:07

I understand what you're saying Kenmitch, and where a company is trading at or above nav I tend to believe it displays a lack of ambition.However if you're not only below nav, but incredibly a Tangible nav, it can be an efficient use of cash, and benefits shareholders.