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FCAU - Fiat Chrysler Automobiles

LC

By LC
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sleepydragon Newbie

sleepydragon

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some of the most successful business men had big goals that most other people thought impossible. many real examples. steve jobs and iPod, Elon musk and his rockets, intel and moore's law, microsoft and personal computer.

 

 

 

Each of these people had a new or different product, making cars /auto is a capital intensive low quality business and not quite the same

 

That said, I think getting to the IPO in october is a definite catalyst

 

I don't think it's so much different. When steve jobs came back to Apple, there were so many mp3 players out there few people thought apple can be successful in making another one. Michael Dell succeeded in the PC world. My point is profit is never at obvious places. The most successful people got rich not because they have done something that's obvious or agreeable by many people.

 

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karthikpm Newbie

karthikpm

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I don't think it's so much different. When steve jobs came back to Apple, there were so many mp3 players out there few people thought apple can be successful in making another one. Michael Dell succeeded in the PC world. My point is profit is never at obvious places. The most successful people got rich not because they have done something that's obvious or agreeable by many people.

 

 

Good points. I still think the projections are too optimistic/unrealistic. That is not to say there is no value in FIATY- the range of outcomes is broader than the rosy outlook presented.

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yadayada Newbie

yadayada

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I can't really figure out what fiat's earnings are now after the take over (not including synergy). It will be around 1.5-1.7 billion euro's right? That would be a PE of around 6. Given that there will be synergy's and higher utilization of factory's, that seems way too low? So even if they do not do amazing things, there is still the replacement cycle because the average age of cars and it is just cheap on an absolute basis right now.

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investor-man Newbie

investor-man

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Dumb question but does anyone know what will happen to the OTC traded shares when the company goes public on the NYSE? Will there just be transferred over?

 

A definitive answer is earlier in the thread. IIRC you get a 1-to-1 transfer into the NYSE shares and it's a non-taxable event.

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racemize Newbie

racemize

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What do you mean the presentation? Are you talking about the press release?

 

I just mean how the announcement of the buyback was presented.  It doesn't get more direct than that.

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fareastwarriors Newbie

fareastwarriors

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What do you mean the presentation? Are you talking about the press release?

 

I just mean how the announcement of the buyback was presented.  It doesn't get more direct than that.

 

Yes okay, I was overthinking it too much.

 

 

 

Anyways, nice to see the 2 guys stepping up and buying some shares.

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jay21 Newbie

jay21

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The negative view of FCA's product line up:

 

"Meanwhile, neither of the merged firms has any presence worth mentioning in China, the key global volume-driving market. For the moment, FCA is functionally little more than an Italian luxury car company (the Ferrari and Maserati brands) and an American truck and SUV company (Ram and Jeep) propping up a number of loss-making attempts at volume car brands. In some respects, the fact that Fiat and Chrysler even made it through their first five year plan is an impressive achievement, but the onus is on Marchionne to explain how his patchwork empire is worth more than the sum of a few of its parts."

 

"But with the U.S. subprime auto loan market showing signs of mounting risk, and gas price pressure growing, the U.S. truck and SUV sales boomlet on which the company's fortunes rely is looking decidedly fragile. Even if a gas price shock or credit crunch doesn't take out FCA's key profit centers, the inevitable cooling of U.S. auto loan expansion will cut heavily into its projected 48 percent sales growth in North America. If continued anticorruption campaigns in China further affect luxury car demand there, Maserati's four-fold projected increase in volume (another key profit contributor in FCA's plans) is in similar trouble."

 

"After all, FCA's mass market plans are only just taking shape. Having initially presented Chrysler as a pseudo-luxury brand in its 2009 plan, the latest presentation saw a rapid about-face, with Chrysler now being positioned as a mass-market volume brand, taking on Ford and Toyota with an expanded lineup. Yet the first new Chrysler models won't actually hit showrooms until 2016 at the earliest, and then the only new models are a re-badge of the lukewarm Dodge Dart compact and a a plug-in hybrid version of the Town & Country Minivan. New full-size and mid-size crossovers won't debut until 2017 and 2018 respectively, and there's no sign that Chrysler will compete at all in the fast-growing compact crossover segment. Having slashed R&D to the bone to keep the lights on for the last five years, FCA desperately has to fill a yawning abyss where its new product pipeline should be."

 

http://www.bloombergview.com/articles/2014-05-08/fiat-chrysler-s-five-year-road-to-ruin

 

 

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phil_Buffett Newbie

phil_Buffett

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another worthless article. the press and super high intellegient analysts (who are all billionares because the are every time right) nooo :D haha)

 

dont bother me. for me it is important

 

pro:

 

great brands

 

ferrari is one of the best brands in the world. piech from VW dreams every night about it, he would get multiple orgasm if he could buy it.

every Young peope dreams to buy and own a ferrari in the future. they say ferrari and not dream about a Bentley or so on.

 

maserati is also a very great brand. very high and premium. the People who buy this car dont care about Price. and the Goal from maserati to achieve 75k. sales is nothing in comparison to millions of car sales world wide.

 

then we have Jeep, ram and dodge. i love Jeep. i see here in Germany a lot of Jeeps. everytime i feel good when i see one. great car. the Wrangler and the Grand.  the pent up demand in North america is still there. so much old cars. so this will stay for the next few years.

 

europe Auto market bottoms actually. will someday in the future also rise again.

 

you have great leadership with Sergio and the elkann´s (exor) the understand what value means. i saw in exor presentation all lot about ben graham. i like this very much. i dont see all lot of companies who knows ben graham.

 

the risks are a sudden Crash in Japan or China and a new recession. the high debt load of fiat Group and the potential alfa flop, if it does not work the Revival of alfa.

 

but in the end i have a Company today that is trading significant less then the intrinsic value of it. so this here is Minimum 14€ fair value. at least

 

so i dont care about media, analysts or something else. even if fiat only rise to 14€ in the next 3 years if have more than 30% yield per year. perfect!!

 

what will be in 2018? i dont care.

 

 

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wbr Newbie

wbr

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Ofc the turnaround can go wrong or the goals can only be partially achieved. Ofc any recession in a key market can impair the progress, but even then there is tremendous value from all the existing assets. That's what value investing in it's core is about: Buying a company where you win big when things go right, still win when some things go wrong and don't lose a lot when everthing goes wrong.

 

I think that's is the important take-away here and I rarely see an analyst who get's this (I guess that's why they are analysts and not fund managers...). They just see the problems and what possibly could go wrong (or the exact opposite when a company is overhyped). But the question to ask is how much do I pay for this "set of future results" represented by a particular company?

 

In the case of Fiat Chrysler at 7.50 Euros the answer is imo: Not much.

 

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investor-man Newbie

investor-man

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another worthless article. the press and super high intellegient analysts (who are all billionares because the are every time right) nooo :D haha)

 

dont bother me. for me it is important

 

pro:

 

great brands

 

ferrari is one of the best brands in the world. piech from VW dreams every night about it, he would get multiple orgasm if he could buy it.

every Young peope dreams to buy and own a ferrari in the future. they say ferrari and not dream about a Bentley or so on.

 

maserati is also a very great brand. very high and premium. the People who buy this car dont care about Price. and the Goal from maserati to achieve 75k. sales is nothing in comparison to millions of car sales world wide.

 

then we have Jeep, ram and dodge. i love Jeep. i see here in Germany a lot of Jeeps. everytime i feel good when i see one. great car. the Wrangler and the Grand.  the pent up demand in North america is still there. so much old cars. so this will stay for the next few years.

 

europe Auto market bottoms actually. will someday in the future also rise again.

 

you have great leadership with Sergio and the elkann´s (exor) the understand what value means. i saw in exor presentation all lot about ben graham. i like this very much. i dont see all lot of companies who knows ben graham.

 

the risks are a sudden Crash in Japan or China and a new recession. the high debt load of fiat Group and the potential alfa flop, if it does not work the Revival of alfa.

 

but in the end i have a Company today that is trading significant less then the intrinsic value of it. so this here is Minimum 14€ fair value. at least

 

so i dont care about media, analysts or something else. even if fiat only rise to 14€ in the next 3 years if have more than 30% yield per year. perfect!!

 

what will be in 2018? i dont care.

 

+1

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txlaw Newbie

txlaw

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I think the best thing to ask ourselves is: what is the worst case scenario for Fiat? 

 

Major dilution, probably.  Well, what's the downside risk if there is major dilution?  I'm thinking it's pretty low.  It reminds me of BAC at sub $8.  OK, dilution is on the table.  So what.  Low downside risk, potentially high upside return is the name of the game.

 

How many of you would participate in a rights offering that occurs as FCA lists on the US markets?  I would.

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Kiltacular Newbie

Kiltacular

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I think the best thing to ask ourselves is: what is the worst case scenario for Fiat? 

 

Major dilution, probably.  Well, what's the downside risk if there is major dilution?  I'm thinking it's pretty low.  It reminds me of BAC at sub $8.  OK, dilution is on the table.  So what.  Low downside risk, potentially high upside return is the name of the game.

 

How many of you would participate in a rights offering that occurs as FCA lists on the US markets?  I would.

 

This is exactly how I'm looking at this -- the market responded as if they will be forced to raise equity.  I think you're right that it is now priced in. 

 

This remains a bet on Marchionne and his support from Elkann.  I am impressed with them so far.  I think they have a lot more leverage over the Italian unions after the Chrysler deal.  The only thing I'm not sure I understand, at this point, is how much flexibility they retain to adjust the plan they've just proposed -- that is, is implementing the "plan" necessary for survival? 

 

Or, is it "aspirational"?

 

As an auto executive, Marchionne so far seems to be a man among boys and given he's signed on for the next 5 years, as long as he retains Elkann's and the family's support, I think Marchionne's proven he's got a lot of rabbits in his hat.

 

 

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Palantir Newbie

Palantir

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Anyone know how Alfa can fit into the lineup? I see that Maserati is going to be the main luxury brand, which I like, but where does Alfa fit in? Super high end is Ferrari land and midway is Chrysler land, and below that is Dodge.

 

 

What I'd prefer they do is relaunch Alfa as an electric brand, that would be truly revolutionary.

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