Guest Dazel Posted November 3, 2015 Share Posted November 3, 2015 http://www.reuters.com/article/2015/07/17/us-magneti-marelli-fiat-m-a-idUSKCN0PR1YJ20150717 this is old news but with the market recovery I would expect it to be the next deal on the table... Link to comment Share on other sites More sharing options...
Sunrider Posted November 3, 2015 Share Posted November 3, 2015 Does anyone still need a call transcript? Yes please Link to comment Share on other sites More sharing options...
Phaceliacapital Posted November 3, 2015 Share Posted November 3, 2015 From last results? Link to comment Share on other sites More sharing options...
merkhet Posted November 3, 2015 Share Posted November 3, 2015 http://seekingalpha.com/article/3616616-fiat-chrysler-automobiles-nv-fcau-sergio-marchionne-on-q3-2015-results-earnings-call-transcript Link to comment Share on other sites More sharing options...
GregS Posted November 3, 2015 Share Posted November 3, 2015 The point being of course if you can zero out so many different "stories" where there is expected to be a lot of value, and yet the result would not be a disaster, then that's reassuring. Based on the work I've done so far I think a ~$10 downside, $25-30 base case are reasonable numbers and if you really believe in a flawless execution of the plan, the upside is on the order of what greenwood has put out, at ~$50. Which put it all together makes a $14-15 price look quite attractive. On the other hand, maybe one of the difficulties I see is that timing will matter here, because while the stock will surely go up if earnings surge as expected under the plan, it's harder to build in a near-term target for the market multiple going up substantially. While there is nothing wrong with holding an undervalued business for a long period of time, given the mediocre returns on capital associated with this industry (although if you had to pick a capital allocator in the industry Sergio would be the guy) , it is not clearly as attractive as a long-term buy and hold versus a play on the market getting the valuation wrong / company taking moves to realize the SOTP value. Ferrari was of course one lever, the parts side is probably the next, not clear after that. This is a really smart comment, philly value. I've owned FCAU for awhile and it's done well, and had become my largest position. I trimmed recently because of exactly what you said. This is a long term turnaround that is working, and a company currently cheaper than its SOTP with potential catalysts, but it is going to run up against both the industry cycle and poor industry economics sometime soon. As the catalysts fall away and additional value fails to be realized, the risk/reward becomes less compelling. Sergio realizes this, which is why he wants a merger before the cycle turns. He wants this to happen from a position of strength, not weakness. Unfortunately, his candor on industry economics probably hurt sentiment on this stock (as well as the rest of the industry, but FCA is below average on every metric). Of course, I don't blame him, because I'm not a long term shareholder and can't say he owes me anything. He is either looking for an exit or to build a stronger FCA for the next cycle, but if it's the latter I probably won't be around. Link to comment Share on other sites More sharing options...
GregS Posted November 3, 2015 Share Posted November 3, 2015 Re Maserati, I found this comment interesting. I think the Levante launch is really important for the brand. Alberto Villa - Intermonte SIM SpA Okay. Thanks. And the second question is on Maserati performance in the U.S., which was not so delightful, in the third quarter. I was wondering if there are specific reasons behind the drop in volumes? Sergio Marchionne - Chief Executive Officer & Executive Director No, I think, we need to – and look, this is reflective of what I think the brand should be doing. I think, we need to pace ourselves in these markets, the total volume ambitions for Maserati until 2018 of 75,000 cars, that's the number that I outlined for 2018, it's a number that should not be violated and we should not be rushing to try and get there. And what happened in the last 12 months is that I think we've accelerated the pace beyond what I consider to be the natural absorption rate in the markets. We need to slow it down, we need to take a deep breath and just work our way through the issues and effectively get ready for the Levante launch and manage that in a very tight way, as a premium brand out to managed distribution. And to be perfectly honest, I don't think that was done, we're in correction mode now, and I think we need to work our way through that issue, hopefully by 2016, the issue will be back on, especially with the Levante being in the market. Link to comment Share on other sites More sharing options...
Shooter MacGavin Posted November 3, 2015 Share Posted November 3, 2015 From last results? I'll take a investor day from 2014 if you have one to offer ;D. Feel like a scavenger but I haven't been able to locate this yet! I think I have third quarter 15 already however. thanks for the offer. Link to comment Share on other sites More sharing options...
Phaceliacapital Posted November 4, 2015 Share Posted November 4, 2015 Here is the presentation and the Q&A afterwards. There is no transcript from the other presentations that day.. I do remember that you could watch the video somewhere, is this been taken down?Investor_Day_Pres.pdfInvestor_Day.pdf Link to comment Share on other sites More sharing options...
phil_Buffett Posted November 4, 2015 Share Posted November 4, 2015 http://www.autonews.com/article/20151104/COPY01/311049944/alfa-romeo-will-delay-key-sedan-suv-launches-sources-say Link to comment Share on other sites More sharing options...
Guest neiljgsingh Posted November 4, 2015 Share Posted November 4, 2015 http://www.vcpost.com/articles/103398/20151104/fiat-chrysler-recalls-900-000-vehicles-over-world-airbag-deploying.htm Link to comment Share on other sites More sharing options...
gokou3 Posted November 5, 2015 Share Posted November 5, 2015 Here is the presentation and the Q&A afterwards. There is no transcript from the other presentations that day.. I do remember that you could watch the video somewhere, is this been taken down? There are a lot more 2014 Investor Day slides here: http://www.fcagroup.com/en-US/investor_relations/investors/Presentations/Pages/2014_investor_day_presentations.aspx Link to comment Share on other sites More sharing options...
Shooter MacGavin Posted November 5, 2015 Share Posted November 5, 2015 Here is the presentation and the Q&A afterwards. There is no transcript from the other presentations that day.. I do remember that you could watch the video somewhere, is this been taken down? thank you very much. Link to comment Share on other sites More sharing options...
fareastwarriors Posted November 6, 2015 Share Posted November 6, 2015 The Power Of Oratory Bernstein - The Power Of Oratory - 29102015Bernstein_-_The_Power_Of_Oratory_-__29102015.pdf Link to comment Share on other sites More sharing options...
JayGatsby Posted November 6, 2015 Share Posted November 6, 2015 The Power Of Oratory Bernstein - The Power Of Oratory - 29102015 I understand execution risks, but what am I missing on leverage? Is he not giving credit for the cash? While I'm asking that, why do they have so much cash? I assume it's a rainy day fund so that if the market turns on them again they can survive to buy the next Jeep? I was pretty sure I read somewhere that they expected to get cash back for the port explosion but were accruing anyway until it all gets sorted. New to this name as of a few days ago, so pretty basic questions. You all have been jumping up and down waving yor arms in the corner and for some reason I ignored it until then. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted November 13, 2015 Share Posted November 13, 2015 The price/performance relationship between FCAU and RACE makes no sense to me! After the IPO, RACE generally stayed richly valued even as FCAU declined in share price every day. Given RACE is about 40% of the value of the combined FCAU, each % decline that isn't reflected in RACE is actually a 1.6% decline in the Fiat stub. The figures were worse when you considered that RACE was up some of those days even as Fiat fell exacerbating the performance spread but making Fiat cheaper and cheaper. I pointed this out, suggested it was weird how much that Fait was hated, and suggested shorting shares of RACE to repurchase more Fiat since the spread in performance was widening and you were getting Fiat for cheaper and cheaper. Of course, that would have actually been a brilliant trade for a day like today, but I never initiated it myself. I am waiting for prices to get a little more rich for RACE or more cheap for FCAU before locking myself into that "conversion ratio." But then, you have a day like today where Fiat is up 0.5% while Ferrari is down 6% suggesting that the Fiat stub is suddenly 5-6% more today than it was yesterday because FCAU isn't reflecting RACE's weakness. It's just bizarre that FCAU and RACE don't trade more in tandem with one another resulting in these wild swings in value for the remaining Fiat stub. Link to comment Share on other sites More sharing options...
argonaut Posted November 13, 2015 Share Posted November 13, 2015 A question for those who are up to date on the fine print of the RACE spin off to be...is it only FCAU holders as of a certain past date or still open to new FCAU holders who would receive the RACE shares? I hold FCAU from a couple years ago...but have been thinking if it drops more I would add to the investment...as long as the shares are still applicable for the spin off... Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted November 13, 2015 Share Posted November 13, 2015 A question for those who are up to date on the fine print of the RACE spin off to be...is it only FCAU holders as of a certain past date or still open to new FCAU holders who would receive the RACE shares? I hold FCAU from a couple years ago...but have been thinking if it drops more I would add to the investment...as long as the shares are still applicable for the spin off... Shares will still receive the spin-off. It will trade around $8 once the right to receive the Ferrari shares is removed. Link to comment Share on other sites More sharing options...
merkhet Posted November 13, 2015 Share Posted November 13, 2015 The price/performance relationship between FCAU and RACE makes no sense to me! After the IPO, RACE generally stayed richly valued even as FCAU declined in share price every day. Given RACE is about 40% of the value of the combined FCAU, each % decline that isn't reflected in RACE is actually a 1.6% decline in the Fiat stub. The figures were worse when you considered that RACE was up some of those days even as Fiat fell exacerbating the performance spread but making Fiat cheaper and cheaper. I pointed this out, suggested it was weird how much that Fait was hated, and suggested shorting shares of RACE to repurchase more Fiat since the spread in performance was widening and you were getting Fiat for cheaper and cheaper. Of course, that would have actually been a brilliant trade for a day like today, but I never initiated it myself. I am waiting for prices to get a little more rich for RACE or more cheap for FCAU before locking myself into that "conversion ratio." But then, you have a day like today where Fiat is up 0.5% while Ferrari is down 6% suggesting that the Fiat stub is suddenly 5-6% more today than it was yesterday because FCAU isn't reflecting RACE's weakness. It's just bizarre that FCAU and RACE don't trade more in tandem with one another resulting in these wild swings in value for the remaining Fiat stub. I'm surprised at the sell down in RACE. Its expensive but not terribly so. Plus, the cheaper the FCAU stub, the happier I am. :) Link to comment Share on other sites More sharing options...
argonaut Posted November 13, 2015 Share Posted November 13, 2015 Thanks for the info. And two follow-ups...have they written in print anywhere the spin-off ratio? And is the $8 per share you estimate or somewhere else? Link to comment Share on other sites More sharing options...
Picasso Posted November 13, 2015 Share Posted November 13, 2015 Anyone who felt the SoftBank pain (me) knows all too well the danger of being long a SOTP stock where half the value is being driven by a hyped up stock. The market really cares about NAV, not the percentage stub on the stock. In these situations you have almost none of the upside from RACE but all the downside by owning FCAU. You need the core FCAU to do well, RACE is irrelevant at this point. Link to comment Share on other sites More sharing options...
merkhet Posted November 13, 2015 Share Posted November 13, 2015 Thanks for the info. And two follow-ups...have they written in print anywhere the spin-off ratio? And is the $8 per share you estimate or somewhere else? FCAU owners still own 80% of FerrariCo, so take the market value of FerrariCo, multiply it by 80% and then divide that by the 1.5 billion diluted shares. That's about $5.35 of FerrariCo for every share of FCAU. Link to comment Share on other sites More sharing options...
gokou3 Posted November 13, 2015 Share Posted November 13, 2015 Anyone who felt the SoftBank pain (me) knows all too well the danger of being long a SOTP stock where half the value is being driven by a hyped up stock. The market really cares about NAV, not the percentage stub on the stock. In these situations you have almost none of the upside from RACE but all the downside by owning FCAU. You need the core FCAU to do well, RACE is irrelevant at this point. We can take solace though that the RACE shares will be spun out in early January which hopefully will correct the situation. Link to comment Share on other sites More sharing options...
kranthi_vic Posted November 13, 2015 Share Posted November 13, 2015 Newbie question: Somebody mentioned FCAU will trade at $8 once the Ferrari shares are spun out. Does this mean we can short the FCAU share? Or will the stub trade under a different name after the spinoff? Link to comment Share on other sites More sharing options...
greatimes Posted November 13, 2015 Share Posted November 13, 2015 Great question Kranthi! I have also been wondering about that. Maybe that is why FCAU has been on a steady downtrend since the IPO and the short interest building. Link to comment Share on other sites More sharing options...
JayGatsby Posted November 13, 2015 Share Posted November 13, 2015 Newbie question: Somebody mentioned FCAU will trade at $8 once the Ferrari shares are spun out. Does this mean we can short the FCAU share? Or will the stub trade under a different name after the spinoff? I think after the spinoff you'd end up short both pieces. So if you short FCAU for $15, post-spin you'd be short FCAU at $10 and RACE at $5 to use rough number. I guess you can't short RACE yet? Would be nice to be long FCAU and short race. This would hedge the risk and could see RACE selling off post spin when people like us dump it. Link to comment Share on other sites More sharing options...
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