ander Posted July 23, 2019 Share Posted July 23, 2019 https://www.bizjournals.com/southflorida/news/2019/07/22/autonation-names-new-ceo.html?ana=yahoo&yptr=yahoo CEO change again and abrupt! Not sure what happened especially since numbers were ok for last report. Maybe conflict with Mike Jackson? Link to comment Share on other sites More sharing options...
kab60 Posted July 23, 2019 Author Share Posted July 23, 2019 Strong set of results, interesting that Autonation USA has reached breakdown. Don't like all the exec turnover but like Cheryl taking over (and Mike owning up to his mistake in hiring Carl). Link to comment Share on other sites More sharing options...
vince Posted July 23, 2019 Share Posted July 23, 2019 Happy to see AN is working out nicely for you guys. Although still early to draw firm conclusions, It's hard not to get good results with reasonably good businesses, with defensive positions, trading at single digit multiples, with mgmt buying in lots of stock at those multiples. When they inevitably grow, more or less with GDP type numbers. the market wakes up and bids them back up to double digit multiples. And you also can expect, occasionally, 15 plus type multiples, that combined with some growth and those buybacks really deliver outstanding returns. Totally mispriced at 7-8 times imo Link to comment Share on other sites More sharing options...
vince Posted July 23, 2019 Share Posted July 23, 2019 Sounds like more bad news is coming. Chopping so many execs ( or do they want to leave?) is rarely a good sign. It's a pretty simple and boring business, so I don't expect any big surprises. I suppose Mike might setup the company for a new CEO, and if they've gotten too fat at HQ and some positions aren't worth the cost I'm all for it. Hard to read too much into. Generally I just don't like too much exec rotation and I think it looks bad in him that they don't have an internal candidate ready to take over. I am betting that most positions will be replaced. There is going to be a head of HR and a CTO in the future and probably someone overseeing real estate (the latter could be replaced lower level executive), so these departures are only a small part of the $50M in savings. Besides that $50M hardly move the needle for a company with $21B in revenue and $3.3B in gross profits. It’s more likely that there is some change in direction or some issues and I am guessing we will find out soon. Disclosure: no position I don't know if comparing the 50 million in savings to revenues or gross profits is the right way to measure it. If the savings are realized, they increase earnings by over 10%. I consider that a significant amount and a needle mover, especially when you were paying single digit multiples for the earnings stream Link to comment Share on other sites More sharing options...
kab60 Posted July 24, 2019 Author Share Posted July 24, 2019 Happy to see AN is working out nicely for you guys. Although still early to draw firm conclusions, It's hard not to get good results with reasonably good businesses, with defensive positions, trading at single digit multiples, with mgmt buying in lots of stock at those multiples. When they inevitably grow, more or less with GDP type numbers. the market wakes up and bids them back up to double digit multiples. And you also can expect, occasionally, 15 plus type multiples, that combined with some growth and those buybacks really deliver outstanding returns. Totally mispriced at 7-8 times imo Thanks. That's pretty much my view as well. Negative is they haven't bought back aggressively in a long time, but it seems they wanted to reduce leverage. It's just an option for now, but I had pretty much written Autonation USA off. Now it seems that was a bit premature, and I like how they tweak and toy around to get the concept right instead of just throwing more capital at it. Link to comment Share on other sites More sharing options...
vince Posted July 24, 2019 Share Posted July 24, 2019 I think I remember them buying 9 percent in 1 qtr, maybe 18 months ago? That is a very nice amount in a short period, plus they have proven themselves buying back lots more over time, usually when multiple is on the low side. Link to comment Share on other sites More sharing options...
kab60 Posted July 24, 2019 Author Share Posted July 24, 2019 Yep, their track record is really good and probably better than most. Bought around 40 which is why one could hope they'd step up to the plate when it was recenty at low 30. But they're investing in brand extension and obviously know better than me where ROIC is highest. Link to comment Share on other sites More sharing options...
vince Posted July 24, 2019 Share Posted July 24, 2019 Yep, their track record is really good and probably better than most. Bought around 40 which is why one could hope they'd step up to the plate when it was recenty at low 30. But they're investing in brand extension and obviously know better than me where ROIC is highest. Agreed, surprised they didnt load up at 30 Link to comment Share on other sites More sharing options...
ander Posted July 24, 2019 Share Posted July 24, 2019 Yep, their track record is really good and probably better than most. Bought around 40 which is why one could hope they'd step up to the plate when it was recenty at low 30. But they're investing in brand extension and obviously know better than me where ROIC is highest. Agreed, surprised they didnt load up at 30 Agreed. I viewed that to be negative along with Cascade board member resigning and selling shares after years. Link to comment Share on other sites More sharing options...
LongTermView Posted April 25, 2020 Share Posted April 25, 2020 https://www.dailymail.co.uk/news/article-8255251/AutoNation-Fortune-500-auto-retailer-worth-3billion-received-nearly-95million-PPP-funds.html Link to comment Share on other sites More sharing options...
kab60 Posted July 8, 2020 Author Share Posted July 8, 2020 Ashbury announcement yesterday was really impressive. They had record earnings in June... I swapped from AN to Ashbury some time ago but either way it shows how resilent the best dealerships are and bodes well for AN. They should brand their parts division as Mechanics as a Service and get a multiple uplift. After the modified Park acquisition, Ashbury should get more than 50 pct of GP from parts and service. And with positive earnings even with plummeting sales and lockdowns I don't see why this should trade with a large discount to the market. Link to comment Share on other sites More sharing options...
kab60 Posted October 21, 2020 Author Share Posted October 21, 2020 AN results absolutely crushing it. Ashbury with a positive update the other day as well. They're printing money on used car sales. Will be interesting to see how the next quarters play out, but I still think their business models - which has been transformed since the GFC - are underappreciated by investors. Link to comment Share on other sites More sharing options...
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