Aston Martin shares

le_loup

Oh dear - I did realise what had caused the exclamations.
……… and was being a bit rude into the bargain.
Never mind - I'm wasted here.

dividendhero

Just done a quick calculation which backs up my view to avoid Aston Martin like the plague..

A £5bn valuation on a company which'll make 10,000 cars in 2020 - would you invest £500,000 in a car plant that made one car a year?

bowlhead99

dividendhero wrote: »

Just done a quick calculation which backs up my view to avoid Aston Martin like the plague..

A £5bn valuation on a company which'll make 10,000 cars in 2020 - would you invest £500,000 in a car plant that made one car a year?

If it was a luxury car and sold to generate revenue of £100k with a 25% profit margin, the £500k value of the "one car plant" is 20x annual earnings. Since profitable businesses with decent brands might be valued in the region of 10-30x earnings (higher end if profit growth expected), the valuation might not be insane.

Clearly a 1 car plant is not a valid investment but with more than one car you get economies of scale and if that one car has a production issue resulting in it coming back under warranty, that's not your whole revenue lost

I haven't looked into what the revenues or profits (or losses) are at AM. Just saying that yes you can pay 2-5x revenue for a business if it's going to grow revenues or profits or both. Per the media, the current owners are not cashing out 100%, only 25% at this time - not sure if prospectus is available by now.

dividendhero

Anyone here go for Aston Martin shares?

If so, commiserations - they've gone from £17 at launch to a fiver. I don't think their even worth that much

iglad

Aston Martin, are another Lloyds TSB, however I'd take £5 if Lloyds were at that price. I have transferred my paper certs into my online platform account as I wanted to sell and the price has headed south. They are still not fully transferred and I''l be glad to be shot of them.

Thrugelmir

Lloyds TSB are reasonable value at current levels.

worried_jim

Thrugelmir wrote: »

Lloyds TSB are reasonable value at current levels.

At 52.8p I could cry. I'm still in profit as bought @ 44p but really affecting my plans in the next few years.....unless the unicorn of Brexit delivers.

50Twuncle

dividendhero wrote: »

Just done a quick calculation which backs up my view to avoid Aston Martin like the plague..

A £5bn valuation on a company which'll make 10,000 cars in 2020 - would you invest £500,000 in a car plant that made one car a year?

Thanks - that's a good way to think about it !

dividendhero

50Twuncle wrote: »

Thanks - that's a good way to think about it !

Think I'm in the wrong job, I could have been another Neil Woodford..oh hang on a minute

Thrugelmir

worried_jim wrote: »

At 52.8p I could cry. I'm still in profit as bought @ 44p but really affecting my plans in the next few years.....unless the unicorn of Brexit delivers.

Sizable cost savings to be realised yet.