Vertu Motors Share Discussion Threads

[seball] 08/7/2016 15:18

Think this could hit 50p short term as oversold . Good luck all

[alter ego] 08/7/2016 14:34

that's my take too, just hope we are both right as I'm rather overweight VTU

[grahamburn] 08/7/2016 14:30

Think there is more mileage (almost a pun, I guess) with the after sales/servicing side of the business than in new car sales in the short term, though the second hand market may well hold steady - provided there's a continuing supply of these without the automatic supply from trade-ins. The after sales side has a higher margin anyway as well as representing some 40% of total profit.

I do agree, however, that the current sell-off in the share price is over done.

[davidosh] 08/7/2016 14:18

I have been picking these up at the 40p level as I think good value on continued car sales due to low interest rates and the use of PCP to buy them. Cambria are my number one holding but Vertu second in the sector.

Amazing that they are half the price they were just six months ago.

[mortimer7] 08/7/2016 10:17

Found this in Motor Trader which I guess is an extract from the piece eluded to above:

[mortimer7] 08/7/2016 10:14

Therein the answer to who was one of the large buyers yesterday:

[seball] 07/7/2016 15:54

Have you a link for the broker note? Thanks

[daddy2010] 07/7/2016 15:45

Cracking and very detailed 40 page sector review note out from Zeus capital this morning outlining the value. Vertu and cambria are their top picks.Also confirmed my numbers are spot on ;-)A must read for all investors and potential investors here.D

[seball] 07/7/2016 15:31

Yes seller now cleared. We have a buyer also. I expect this to trade over 40p tommorow. Drop in share price overdone. Expect this to trade around 50p level shortly.

[my retirement fund] 07/7/2016 15:27

I meant to add good post Daddt2010, thanks.

[my retirement fund] 07/7/2016 15:25

Hmm seller done then ?

[seball] 07/7/2016 15:22

seller cleared? expect to rise to 42p quickly. Then a steady ride to 50p imo

[mortimer7] 07/7/2016 15:17

12 miilion traded today now, over 3% of the total shares. Around £4.5million.

[seball] 07/7/2016 15:06

AGM also this month so will get a positive update on trading imo.

[seball] 07/7/2016 15:04

Yes I agree Ed. I'm happy to buy more at this price as recent placing was at 62p. Vertu is undervalued and has a good dividend yield imo

[ed 123] 07/7/2016 14:50

Seball.

Your spring is still coiled. ;-)

11 million traded now. That's more than 3% of the shares issued. Guess there are two institutions active, one selling and one buying. They seem to be more or less agreed on price, so maybe there will be a big volume closing auction?

Took a gamble and bought some today. Have to say, I'm not a fan but it does look cheap atm. The question is, 'How long and deep will any downturn run?' Anyway, I'm hoping the balance sheet and resilience in earnings from after sales will see it through.

[seball] 07/7/2016 10:00

This is like a coiled spring.

[ed 123] 07/7/2016 09:50

Brief blip up but then the 38p seller returned.

Volume of 2 million shares traded by 10:45am.

AGM on 20 July 2016. Anyone going?

[daddy2010] 06/7/2016 20:21

Obviously he has not. Absolutely no chance of a cash flow crisis as they still have approximately £10m cash left on the balance sheet and that's after the Gordon Lamb purchase and £50m Capex pencilled in for for 2017 and 2018. Add in the headroom on the overdraft and other banking facilities (nearly £80m) and prudent approach to valuing assets on the balance sheet (particularly property and stock - unlike others in the sector) and Vertu are well placed to whether and take advantage of the anticipated slowdown across the sector.

The market has already priced in a 30%+ decline, whereas 10-15% may be closer to the mark if your bearish. Although we saw a small downward tick in new car sales for June (not surprising given previous record levels) competitors cambria and lookers both reported strong trading updates this morning.

Buy when there's blood on the forecourts as these will be much higher once sentiment improves, placing indigestion subsides and willing buyers return to the market.

The Agm statement later this month could also help turn sentiment here.

With a pe of only 6x, book value of 0.4x, roce of 12%+ and a positive free cash flow profile, there is an awful lot of bad news already priced into this efficient and we'll run business imho

D

[ddz6006] 06/7/2016 19:35

Have you read the numbers???

[my retirement fund] 06/7/2016 09:33

This is a company thats gleefully galavanted round the shop buying up dealership after dealership right at the top of the market out of money it doesn't have and has ponced of shareholders instead. Now we are entering a inflation driven full blown recession and unemployment is set to return not only does this look overpriced, it could even find its unable to manage its portfolio during this down turn run into a cash flow crises and go BUST !

[mortimer7] 06/7/2016 09:04

SMMT figures for June 2016 have been issued this morning showing 255,766 new cars were registered for June, completing the highest ever first 6 months total in 2016 of 1,420,636.
In isolation, June is only 0.8% down on June 2015. Chief Exec of SMMT commented
"It is far too soon to determine whether the referendum result has had an impact on the new car market. The first six months saw strong demand at record levels but the market undoubtedly cooled over the second quarter. It’s important government takes every measure to restore business and economic confidence to avoid the market contracting in the coming months."

IMO, it's fairly obvious the new car numbers will begin to recede at least in the short term, but there is a massive bank of aftersales business built up to sustain dealers. And even though Junes numbers of 255,766 are slightly down on 2015, to put in context, June 2014 was 228,291.

[spooky] 06/7/2016 08:46

But we ARE going into one IMO.

[seball] 06/7/2016 08:39

Agree. We also have the prospect of another interest rate cut putting more money in consumers pockets. This is trading like we are in a recession? We are NOT.

[red_shed2000] 06/7/2016 08:32

Well it's an argument but I'm not sure I buy it....

The pound euro exchange rate was at the level it is today during 2010, 2011, some of 2012, 2013 and part of 2014 and throughout all of those years new car sales continued growth yoy. Now I appreciate it was from a low baseline due to the financial crises but still, this is what happened.

Car manufacturers aren't going to want to see sales drop so I would also expect lower prices to compensate if they see that as a threat.

AIMHO

Good luck all.