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Son_of_Swiss said;
'Exactly, so what happens is as a model gets older then they sell fewer, so they either refresh the model, or they renew it to sell more cars!!!'
That is certainly the normal sales pattern and the favoured refresh point being year 5, with replacement at year 7.
However, what happens if say AML had introduced replacements for their range of three 'ageing' core models, but then found they were selling fewer cars than previously?
Which, if their sales figures are studied closely, is unfortunately exactly what happened.
Good afternoon. Just trying to pass on information that might be helpful to some. I have no clue about whether AML will succeed, prosper, be acquired, etc.
When considering an investment in any business, it is obviously always prudent to study figures.
Care is sometimes needed, about misunderstanding various over enthusiastic statements by directors. In the case of AML,
I expect you all remember, - we definitely do not need any money. A few months later, they wanted about £650 million.
It is expected that the revised DB11, will be made public in May. Some seem to be expecting a new model, but considering the enormous cost involved to do that, a face lift model is far more likely. Most of the updates are anticipated to involve the interior.
Presumably Mercedes infotainment will still be used, but it is highly unlikely that it can be the very latest MBUX, because although that has recently been publicly announced, their first model to feature it, the new E Class, has not yet been unveiled.
The two articles referenced by Son_of_Swiss, emphasise the importance to Aston Martin of their Sports and GT core models. The company figures need to be studied for that, because during recent years, sales numbers have unfortunately not been good.
These are the totals (Sports/GT/Specials/Previous), reported by AML.
2007 (the record year) .... 7281
2019 ................................ 5862
2020 (pandemic) ............ 1878
2021................................. 3177
2022 ................................ 3193
Reinvesting dividends is often the best strategy technically, but many investors do like to receive regular cash dividends.
Let's see how effective the compounding of dividends has been, since the time when BAT sold their financial services business.
Examples - if purchased in 1999.
10,000 shares cost £52,850.
Value at end 2022 = £328,150
Dividends received during first five years = £14,640
Dividends received during past five years = £105,730
Current annual dividends = £23,090
Total dividends received = £278,030
1,000 shares costing £5,285.
Value at end 2022 = £32,815
Dividends received during first five years = £1,464
Dividends received during past five years = £10,573
Current annual dividends = £2,309
Total dividends received = £27,803
With hindsight, those shares could have been purchased at much lower cost one year later, but hindsight of course never helps investors.
Note - Obviously inflation skews those numbers, but the compounding is illustrated.
Can posts here be edited?
I have made a mistake.
'the 5 year period that you refer to, included 2019.'
Sorry, that should be 2018.
'Never selling shares is not a good idea.'
Really ?
My life has been changed beyond expectations, by never selling BAT.
Keep faith in good businesses.
I think you have reached your conclusion, simply because the 5 year period that you refer to, included 2019.
In May 2017, BAT shares were trading above £50 and as we often only realise afterwards, that was overvalued.
A severe decline then occurred during 2017 and 2018.
However, it is obviously a little easier to spot when shares are undervalued, so I hope you added to your BAT holdings in early 2019.
I have noticed a strong following by posters on internet forums for NASDAQ shares. Many of those 'wonder' businesses suffered big falls last year, so if you were holding BAT throughout 2022 , you can have a slight chuckle. The BAT share price increased 20.0% during 2022 and dividends were on top of that. The FTSE 100 change in 2022 was +0.91%. (total return +4.70%).
The fundamentals for BAT at present are fairly encouraging (PE = 9 and Yield = 7%) which might improve with the imminent results announcement. Last year the dividend increase was (historically) very modest, but it was accompanied by the huge share buy back, as the way of returning cash to shareholders.
As always, we never know what markets will do.
However we can always remember, when a business steadily increases its earnings, the share price will eventually follow.
Unfortunately of course, it works the other way round as well.
Many posters on LSE, study and talk about the intricacies of share price movements.
eg. prolonged dip, with three lows, each lower than the other. However, each has a divergence on the RSI, and there has been a contraction in volatility, suggesting a reversal.
I first bought BAT when In the £2s, (yes, a while back) and have been happy holding (let's say a reasonable quantity) ever since. It has been a remarkable ride, with the annual dividends received now, being greater than the original cost of the holding. Inflation flatters that comparison of course.
I concentrate on thinking about the fundamentals of businesses and ignore short-term share price movements. Obviously short-term trading (which is more like gambling, than investing) would probably be the opposite.
If the future profitability of a business increases, eventually the share price follows. The reverse is of course true, unfortunately.
Considering the business itself, what are your thoughts and opinions about BATs 5 year future prospects ?
What changes might either help, or hinder the company ?
Ghini,
You said - 'am I the only one still concerned about their spending rate, payables and overall debt?'
You have certainly highlighted an extremely important issue, that potential investors ought to consider with this company.
It is obviously simple, that the habitual cash-out spending, being more than the (lack of) profit coming in, makes it impossible to repay the debt.
AML have worked on the assumption that debt can be refinanced, each time repayment approaches. Last time, when some companies were issuing 30 year bonds at 4%, Aston Martin had to accept interest rates above 10% and also relatively short loan periods.
Base interest rates are now at a very different level from then, so we can only imagine that the next refinancing could be much more complicated.
If you want to visit a forum where the subject is discussed by some people with first hand knowledge, try the Pistonheads AM Stock Market Listing topic. You don't have to own an Aston Martin car (although that would help the Company). Early in that topic ariund the time of the IPO, you can see that several of us who had knowledge of the background, were very critical of the floatation value. The subsequent disastrous 95% share price fall, revealed that we did possess the knowledge to anticipate what was going to happen.
Having read RonR's posts, he gives the impression that he might be fairly new to shareholding. All of us have to start knowing nothing of course and it does take quite a while, to transition from watching share prices, to being serious business investors.
You mentioned Lawrence 'Stroll is in control now'. In the past, there have been many highly accomplished businessmen running AML. You will know what happened. Another very important aspect now, are the contracts for sponsorship and naming rights, but I expect you have read the details and how LS is involved with those.
RonR said, 'and the fact as a company, they are recession proof.'
Unfortunately not true Ron.
Some businesses selling 'luxury goods' may cope better with recessions, but it has certaunly not applied to Aston Martin in the past. Take a look at what happened to Aston Martin during 2008/2009. Cancelled orders, slump in sales and redundancies. You can find 4.3 Vantages for sale, first registered during the summer of 2009, but those cars were actually built one year earlier, then remained unsold for a whole year.
It is sensible for any investors considering holding AML long-term, to seriously study the financial history of the company. There is plenty of it, right back to 1913. Certain statements from directors have been, shall we politely say, sometimes a touch hopeful.
Someone called Peavey123, recently made a sensible comment on one of my Aston Martin forum topics;
'The whole point of investing is to make money. I do find it strange when people lose money then pretend it doesn't matter.
All the people who bought the rights issue are down almost 50% in 2 weeks, now the market cap returns to where it was before the rights issue.'
One tobacco stock has certainly met Peavey's investment requirement. Buy at 240 pence, in time becomes worth £30, the original purchase cost having been returned multiple times over through dividends and the current annual dividend being more than the original purchase cost. Continuous high percentage growth of EPS. The whole investment having been tax free.
As for morals of the business, that is a separate issue. Those who disapprove and don't wish to invest is fine, but they have missed a brilliant investment and have achieved nothing in ending the trade. Also remember, that the regular government publuc messages to stop smoking, are linked to the Treasury happily receiving billions of Pounds every year by taxing the tobacco industry.
We have an interesting dilema. Who can be right Peavey123, or c2645sg ? Two different opinions.
Ref. c2645sg
'Stroll will have to sell soon now. Otherwise he will never make his money back on the AML investment.'
Some might suggest, that he has already more than made his money back on his AML investment.
New sponsorship money flowing into his privately owned Formula One team, as a result of being associated with the Aston Martin brand (for which AML pays the team !).
Do AML shareholders who post on this chat forum, also have equity portfolios consisting of more conventional businesses, most of which steadily produce eps and dividend increases?
This puzzles me, because could the reason for holding AML, be all about the excitement of gambling?
Anyone with their own more conventional equity fund, would probably not even be looking for an AML type business.
The Public Investment Fund, a recent AML investor with an 18.67% holding in the Company, a now looking at a book loss of about £65 million.
If you want to know when AML will stop the habit of spending more than they earn, take a look at 109 years of their financial history.
Mercedes-Benz have not bought any shares in AML.
In conjunction with the technical agreements between the two companies, Aston Martin issued new shares and those have been allocated to M-B. It began years ago, initially for AML to buy M-B engines. The agreement was more recently extended, to include other components.
Originally the holding was I recall 5%. That was later diluted slightly, because M-B did not take part in a rights issue.
The latest agreement involved three tranches of shares, taking the total to 20%.
For the second agreement, one tranche of shares has been given so far (the second one has been delayed). Their holding is about 11% now.
There is a condition whereby AML have to pay a balance of cash, if at the time of a tranche issue, the share price is below (somewhere in the £12).
Many published reports say M-B have invested in AML, but not so. They are probably happy to sell some extra components, but in reality, it is peanuts to their revenue and profit.
I cannot see the post now, but someone asked this morning, 'Who would buy a loss making company'.
We obviously do not know about the future, but if you are interested to know who has previously bought the loss making Aston Martin business, here is the long list. Each saviour presumably thought they could turn around the Company. Wonderful enthusiasm and dedication, but most left financially much worse off.
The golden eras were Sir David Brown and Ford Motor Company. Beautiful cars were produced during those periods and motor racing successes, but no profits.
https://www.pistonheads.com/gassing/topic.asp?h=0&f=70&t=1857981
Hello username Joe21013. You posted some comments today.
I did notice a few misunderstandings in your posts, which could easily be clarified, but I do not want to post here.
Every day seems to frequently descent into fighting matches. Not worth me getting involved.
If you would like to have some explanations Joe, I would suggest that you put a post on the Aston Martin forum.
Use this link, then go to the latest page .
https://www.pistonheads.com/gassing/topic.asp?h=0&f=70&t=1719281&i=0
There is huge knowledge about the Company, history and current goings on, amongst the posters there.
Most own Aston Martin cars, so some take a great interest in the business side of the Company.
That topic began before the IPO, so now tells the story of everything since then, but it would take a long time to read 159 pages. The early months pages might be interesting to you though, because several posters could see what was going on during the run up to the IPO. Therefore what happened subsequently, was hardly a surprise to them.