FCAU - Fiat Chrysler Automobiles

[cameronfen]

Yes that doesnt change my argument.  I even assumed you were correct with the 10% margin because I could not find.  That still doesnt change what looks like a low roic which unlike margins ultimately is what counts.  I shouldnt be getting in like a flame war on this forum anyway.  We all are here to make money and help each other make money. 

[whatdadil9]

No flame throwing. Its just amusing how people try to use stock valuation to reverse engineer fundamental value. I try to go the other way.

 

 

[whatdadil9]

Can someone explain this price action?

 

Why does the auto industry have to be going to zero?

 

Look at FOXCONN and BOEING.

 

WAYMO will be using chryslers.

 

This is not redbox or blockbuster... This feels more like NFLX pre over the top but prob better.

 

HOW CAN ONE JUSTIFY THIS VALUATION?

 

im perplexd.

[Angelawang896]

https://sumzero.com/sp/MohnishPabraiInterview

 

Mohnish 6/27/18 interview w Sum Zero. He touched upon FCAU.

 

Basically based on 2018-2022 plan, EPS of $6.6 euro (avg of 5.9 and 7.3) x 1.16 exchange = $7.66. Then multiply by 1540M shares, that's $11.8B adj earnings. Current Mkt Cap $30B, back out Magneti of $5.25B (mid point of analyst est) so rest is $24.75B. That's appro. PE of 2.

 

He thinks FCAU will trade at more than PE 2 by 2022.

 

 

[whatdadil9]

Magnetti is worth more than 5.25bn.

 

EV is lower at year end. closer to 23 when you back out net cash...

 

This feels to be sentiment...what changes sentiment?

[Guest ajc]

 

 

Magnetti is worth more than 5.25bn.

 

EV is lower at year end. closer to 23 when you back out net cash...

 

This feels to be sentiment...what changes sentiment?

 

 

 

Certainty on tariffs, or at least more of it.

If the EU agrees to get a framework going for analyzing auto exports, I think that changes things.

Without that, the negative sentiment probably remains.

With it, it seems likely the market will have reasons to be even more bullish than they were on US auto's.

My 2 cents.

 

 

 

[whatdadil9]

so your saying certianty on tarrifs or trade wars abating will boost interest in OEMS higher than it was previously???

 

...

 

FCAU will blow thru old highs and we have marelli? 30? 35?u

[Guest ajc]

 

 

so your saying certianty on tarrifs or trade wars abating will boost interest in OEMS higher than it was previously???

...

FCAU will blow thru old highs and we have marelli? 30? 35?u

 

 

 

I think it'll be bullish for GM, F, and FCAU, since US auto companies get the worst tariff deals out of the major world economies. Therefore, if there was an agreement to equalize tariffs, they'd benefit the most. I'm not saying it'd be super bullish, but it should make their products more affordable globally, so it would help.

I also think auto stocks have been hit because of trade war fears, with that sector specifically being a major battleground (just look at their recent charts all trading down in unison). If those fears are resolved, that'd be a pretty big positive.

 

Looks like there might be some movement on that front at the moment (https://www.ft.com/content/87bf0aa0-7ed2-11e8-8e67-1e1a0846c475). Then yeah, Marelli would definitely be an additional catalyst. Those are generally my thoughts on current sentiment issues. Time will tell if they're accurate.

 

 

 

[Spekulatius]

 

 

so your saying certianty on tarrifs or trade wars abating will boost interest in OEMS higher than it was previously???

...

FCAU will blow thru old highs and we have marelli? 30? 35?u

 

 

 

I think it'll be bullish for GM, F, and FCAU, since US auto companies get the worst tariff deals out of the major world economies. Therefore, if there was an agreement to equalize tariffs, they'd benefit the most. I'm not saying it'd be super bullish, but it should make their products more affordable globally, so it would help.

I also think auto stocks have been hit because of trade war fears, with that sector specifically being a major battleground (just look at their recent charts all trading down in unison). If those fears are resolved, that'd be a pretty big positive.

 

Looks like there might be some movement on that front at the moment (https://www.ft.com/content/87bf0aa0-7ed2-11e8-8e67-1e1a0846c475). Then yeah, Marelli would definitely be an additional catalyst. Those are generally my thoughts on current sentiment issues. Time will tell if they're accurate.

 

This is incorrect, The US car industry  makes ther money with trucks and there are high tariffs on trucks. Besides that, tariffs or not, the US cars (or trucks) won’t take much market shares in Europe anyways,

 

I expect Ford and especially GM to get a major spanking in China due to the trade war, as the Chinese will retaliate against US companies in ways other than tariffs, and most of the business in China is conducted via GM Chinese ventures and you can guess who comes up ahead if there is a dispute. They have done this ahead with the Japanese and the Koreans.

 

in  addition, the tariffs, supply chain disruptions and the steel cost increases will also hurt their bottom line. I think for those  reasons , GM is a sell right now.

[RadMan24]

Japanese and Korean sales recovered once the issue was settled.

[walkie518]

I was reading an article on the security of transportation data where an "expert" claims that GM and Ford have decent controls in place but Fiat "has a lot of work to do."

 

https://www.telegraph.co.uk/news/worldnews/northamerica/usa/11754089/Hacker-remotely-crashes-Jeep-from-10-miles-away.html

 

I'm not sure that this changes one's investment thesis. 

 

Certainly, Fiat spends where it needs to spend and defers where it can defer.  That said, there will, at some point, be a need to invest more in the security of its systems. 

[Angelawang896]

My major questions re FCAU 2018-2022 plan.

 

1) Will the successor stick to the plan and deliver? Rumor has it that John Elkann and Marchionne have disagreement about the candidates

 

2) Sergio has been saying for a long time that electric cars/auto drive cars won't pan out cost wise and has been slow to put decent resources behind the initiatives. Now suddenly in the new 5 year plan he is going majority of E cars and hybrid and ride share. Was he wrong in the beginning? Can FCAU catch up?

 

3) oil price. FCAU is now all trucks/SUVs.

[Guest Own The Rails]

So nice to be back on CoBF after a work-mandated hiatus from investment forums.

 

Anyway, a fairly tangential but interesting development in Mondo Agnelli: http://www.espn.co.uk/football/soccer-transfers/story/3562307/cristiano-ronaldos-transfer-to-juventus-leads-fiat-workers-to-call-strike

[whatdadil9]

its great advertising. 75m twiter followers .jeep has 1mm. they will sign a great advertising deal with him for jeep and or ferrari. no one cares.

 

Tarrifs dont even really effect the financials of FCA. Europe will be a good outcome. they have idicated they want to got to zero tarrif and we import nothing to China already.

 

People are not even really doing the work here...numbers are irrelevant. and they should be.

[Spekulatius]

its great advertising. 75m twiter followers .jeep has 1mm. they will sign a great advertising deal with him for jeep and or ferrari. no one cares.

 

Tarrifs dont even really effect the financials of FCA. Europe will be a good outcome. they have idicated they want to got to zero tarrif and we import nothing to China already.

 

People are not even really doing the work here...numbers are irrelevant. and they should be.

 

I believe that Europe would agree to a zero percent import tax for cars, if the Us abolishes the 25% “ chicken tax” tariff on trucks.

[gokou3]

Marchionne exits Fiat Chrysler, Ferrari amid health crisis: sources

https://www.reuters.com/article/us-fiatchrysler-ceo/marchionne-exits-fiat-chrysler-ferrari-amid-health-crisis-sources-idUSKBN1KB08W

 

Fiat Chrysler Names Manley CEO; Marchionne's Condition Worsens

https://www.bloomberg.com/news/articles/2018-07-21/fiat-chrysler-names-manley-ceo-marchionne-s-condition-worsens

 

Gap down Monday?

[bathtime]

“During the course of this week unexpected complications arose while Mr. Marchionne was recovering from surgery and that these have worsened significantly in recent hours,” according to the statement. “As a consequence, Mr. Marchionne will be unable to return to work.”

 

Sending well wishes to Mr. Marchionne and his family for a healthy recovery.

[Guest ajc]

 

“During the course of this week unexpected complications arose while Mr. Marchionne was recovering from surgery and that these have worsened significantly in recent hours,” according to the statement. “As a consequence, Mr. Marchionne will be unable to return to work.”

 

Sending well wishes to Mr. Marchionne and his family for a healthy recovery.

 

 

 

Agreed, it's very sad. Hopefully he's able to enjoy a great, eventual retirement after all of this.

 

 

 

[Liberty]

Sad news indeed. Also wishing a good recovery.

[Parsad]

Sad news indeed. Also wishing a good recovery.

 

+1!  Well wishes and a speedy recovery! 

[sleepydragon]

smoking and alcohol are the top proven reducers of life expectancy.

 

he should quit smoking 20 years ago, and he should quit now when he recover. smoking do kill people!

I used to drink occationally.  now, I just completely quit drinking.

I also quit drinking teas because almost all the teas have pesticides.

I just drink coffee nowaday. and even some coke doesn't hurt as long as I exercise.

 

Just think about how much money you will make from your stock portfolio for each extra year you extend your life during the last 10 years of your life.. :) It's probably 10x more what the current portfolio are making per year now. that make me to want to exercise and live longer. It's the best value investing.

 

[fareastwarriors]

What are you guys doing with your stock with Marchionne out?

 

Any changes? Wait and see first?

[mwtorock]

smoking and alcohol are the top proven reducers of life expectancy.

 

he should quit smoking 20 years ago, and he should quit now when he recover. smoking do kill people!

I used to drink occationally.  now, I just completely quit drinking.

I also quit drinking teas because almost all the teas have pesticides.

I just drink coffee nowaday. and even some coke doesn't hurt as long as I exercise.

 

Just think about how much money you will make from your stock portfolio for each extra year you extend your life during the last 10 years of your life.. :) It's probably 10x more what the current portfolio are making per year now. that make me to want to exercise and live longer. It's the best value investing.

 

For tea, you can leave the leaves in boiled water for about a minute and dump the water out. People believe that should wash out the pesticides.

[walkie518]

What are you guys doing with your stock with Marchionne out?

 

Any changes? Wait and see first?

 

I wouldn't do anything here... not having Marchionne will impact the business for certain, but the bench is deep and the targets have already been set.  Maybe the next round of leaders don't have the same vision, but I don't think it changes the execution of the current plan? 

 

The Magneti Marelli spin is in process of digestion...

[DCG]

It’s interesting (for lack of a better word) is that they made what sounds like a permanent decision to replace him. It seems to imply that he’s not going to survive. Otherwise, I’m not sure why they wouldn’t have announced an interim CEO. They’re not being very transparent.

 

Either way, I hope he’s able to pull through.