Jurgis Posted May 23, 2016 Share Posted May 23, 2016 (the perception is that the Toyota cars of today are not as good as they were 15 years ago). "Rosy past" bias. ;) No, seriously. There's a lot of that going on. ----------------------------- The fact that people don't give crap about emissions sucks. Especially since we are not talking just CO2 here, but particulates and compounds that cause health damage. But, yeah, it is a fact: people still buy and drive the polluting VWs. Link to comment Share on other sites More sharing options...
Drake Posted May 23, 2016 Share Posted May 23, 2016 The whole emissions thing is a storm in a teacup. Even if Fiat were found to be rigging emissions, I think the impact on the brand would be negligible. I agree - but only as long as the allegations stay a European matter. Here in the EU, we don't have punitive damages and the penalties imposed for breaking the law are never so high that they might severely damage a company. But penalties in the USA are different. I read that for Volkswagen penalties of more than 40 $bn are being discussed - plus possible punitive damages (somewhat off-topic: Bank of America even paid about 60 $bn penalties). That's why I would be worried if there were similar allegations by US transport authorities... Link to comment Share on other sites More sharing options...
Drake Posted May 23, 2016 Share Posted May 23, 2016 But, yeah, it is a fact: people still buy and drive the polluting VWs. Maybe, because they believe that other car makers are not better? Here in Germany, we have known for years that the car makers' informations about petrol consumption have always been completely unreliable, because of the silly legal requirements for calculating them. I have seen several articles in magazines in the last 10 to 20 years about how ridiculous und unreliable car makers' information on petrol consumption (and hence about emissions) were and how unrealistic the legal requirements for the information were. The usual reaction to the US allegations against Volkswagen here in Germany is a shrug of the shoulders, the question "And what's new about that? We knew all the time, didn't we?", followed by a statement or examples on how all car makers have made up or measured unreliable figures for consumption and pollution information in the past. I share this view, nonetheless I think that Volkswagen's case is especially shameful because Volkswagen did a lot of advertising to promote their supposedly environment friendly cars... Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted June 1, 2016 Share Posted June 1, 2016 Fiat is holding up comparatively well relative to U.S. based competitors in May thanks to Jeep. From seeking alpha Fiat Chrysler Automobiles (NYSE:FCAU) unit sales +1% to 204,452 to top the Kelley Blue Book estimate for the month. Brand sales growth: Fiat -19% to 3,137; Chrysler -19% to 24,276; Jeep +14% to 90,545; Dodge -5% to 42,837; Ram flat at 43,613; Alfa Romeo 44. Ford (NYSE:F) unit sales -5.9% to 235,997 units to beat the Kelley Blue Book estimate for a 6.8% Y/Y decline, but fall short of the Edmunds.com forecast. Two fewer selling days this year was a factor in the comparison. YTD U.S. sales +4.2% to 1,112,939 units. General Motors (GM -3.8%) unit sales -18.0% to 240,540 units to miss the forecasts published by Kelley Blue Book, Edmunds, and other industry watchers that ranged from -12% to -16%. Two fewer selling days in May was a factor in the sharp drop in unit sales. Link to comment Share on other sites More sharing options...
fareastwarriors Posted June 1, 2016 Share Posted June 1, 2016 Concern? Discounts helped pave the way to the increase, according to TrueCar, which said Fiat Chrysler incentives rose 19.8% in May, compared to the same period a year ago. The industry average increase was 7.1%. http://www.usatoday.com/story/money/cars/2016/06/01/fiat-chrysler-may-2016-sales/85231498/ Link to comment Share on other sites More sharing options...
bonkers Posted June 1, 2016 Share Posted June 1, 2016 I believe it is very hard to get reliable data on incentives. At least I cannot say which source would be better than some else. If anyone has a good source to propose, I'm happy to take a look. ::) Also the breakdown of incentives would be interesting: Incentives on Jeep must be pretty much as low as they can be over the cycle. However, there is no doubt more incentives now on cars, as these are simply currently not moving, there is overcapacity and possibly even overproduction, and inventory overhang. But I consider that to be a shift in customer preferencies, not a sign of weakness in overall demand (where FCA still increased total sales during a difficult month). Nevertheless, this is a slight negative as it prevents manufacturers to be as profitable at the moment as they would be with optimal product range and production capacity. FCA has addressed this, whereas I'm not sure about the situation with its competitors. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted June 1, 2016 Share Posted June 1, 2016 I believe it is very hard to get reliable data on incentives. At least I cannot say which source would be better than some else. If anyone has a good source to propose, I'm happy to take a look. ::) Also the breakdown of incentives would be interesting: Incentives on Jeep must be pretty much as low as they can be over the cycle. However, there is no doubt more incentives now on cars, as these are simply currently not moving, there is overcapacity and possibly even overproduction, and inventory overhang. But I consider that to be a shift in customer preferencies, not a sign of weakness in overall demand (where FCA still increased total sales during a difficult month). Nevertheless, this is a slight negative as it prevents manufacturers to be as profitable at the moment as they would be with optimal product range and production capacity. FCA has addressed this, whereas I'm not sure about the situation with its competitors. Right. And given their strategy to move away from cars, I wouldn't be surprised if those were what they're offering discounts on to move them off the lots to attempt to make room for more future trucks, jeeps, SUVs, etc. since those are what are doing well and we're heading to the new car season. If they're heavily discounting cars to move inventory and make room for higher profit margin items that have been selling strongly, I'm ok with that as a development. Link to comment Share on other sites More sharing options...
merkhet Posted June 8, 2016 Share Posted June 8, 2016 http://www.wsj.com/articles/italy-says-no-emissions-wrongdoing-in-fiat-vehicles-1465322468?mg=id-wsj Italy Says No Emissions Wrongdoing in Fiat Vehicles “I confirm what other (EU) member countries have found, that there aren’t illegal defeat devices on diesel models from any companies besides those already identified on Volkswagen cars,” Mr. Delrio said at a conference in Luxembourg. Link to comment Share on other sites More sharing options...
Agrippa07 Posted June 8, 2016 Share Posted June 8, 2016 Fiat Said in Talks With Uber as Marchionne Seeks Tech Deals: http://www.bloomberg.com/news/audio/2016-06-08/fiat-said-in-talks-with-uber-as-marchionne-seeks-tech-ventures I think it's the right approach to try to work together with different partners and that way gain more insight on the market and technology. Link to comment Share on other sites More sharing options...
SwimmingNaked Posted June 9, 2016 Share Posted June 9, 2016 what interview are you referring to? My concern is that the business will perform/rationalize but when SAAR dips to 16mm...stocks will be cut in half if not more... Momentum/direction/etc... I almost feel like you have to go thru a cycle for investors to see that breakevens are lower / attract a deal. It begs the question, why do you want to be a shareholder into all of that? How do you substantiate the market changing sentiment? The fact that it is completely immune to positive news developments is absurd. The stock doesnt go up on good news. Soros/Druckenmiller say thats when you sell. When stocks stop going up on good news. Why is this not a value trap? I am an owner. unfortunately. I see all the same things you see but...Absent a sale of the company/merger or a spinoff of parts, I struggle to see how we get revalued. Even if we get to a net cash position the buyback will be viewed as value decreting... buying back stock at peak earnings. Thats the view on GM. I think the market needs to see these guys being more rational with capital to re-rate these stocks... consolidation ala airlines... The irony is that people could say even with consolidation you are still buying into an intensely cyclical business with alot of operational leverage and you dont warrant a multiple anyways. I see 101 reasons not to be long but struggle to find reasons to be... If it was trading below cash or what not, I get it. But its not. Maybe ev/ebit/da is not the way to look at it. The business consumes working capital in the downturn and also runs the risk of losses. Thats what the shorts are saying... If it was trading at 1x EPS and they were dividending out all the earnings...maybe that would work.... Barring a sale to google or google taking a stake where you could say maybe this is like tesla and not succeptible to the "cycle" i dont see how this works... I want someone to tell me how it works. Market is looking for FCF from the company, so you are right that what fwd earnings or what EBIT multiple it is trading at has been kind of irrelevant and will continue to be irrelevant if the company is not generating FCF. If you look at just FCF, the company does not seem to be undervalued at all. We are at a pretty meaningful inflection point with the 5 year plan. Capex is coming down (much faster than expected) and company continues to make progress on margins from better pricing on newer models, continued efficiencies in operations, improving their mix and increased unit sales from Jeep entering new markets + European recovery. I think the stock will turn this coming quarter, when it becomes obvious that the plan is moving to a stage where it begins to harvest FCF from the all the wise investments that Sergio has made. Net debt should begin to come down sharply in a next couple of quarters. For the year, capex looks like it will be <8 billion and CFO >11 billion, and this should improve further in '17. FCF generation will be the catalyst that moves the stock and we are right at that point now... Link to comment Share on other sites More sharing options...
whatdadil9 Posted June 9, 2016 Share Posted June 9, 2016 Gm makes free cash and it doesn help them. and they pay a div and buyback stock.. Link to comment Share on other sites More sharing options...
SwimmingNaked Posted June 9, 2016 Share Posted June 9, 2016 Gm makes free cash and it doesn help them. and they pay a div and buyback stock.. Is GM really that undervalued looking at last year's FCF? I don't follow it that closely so I'm probably not making all the proper adjustments to arrive at "true FCF" but a quick look at '15 shows they have CFO of 12 billion and Capex of 8 billion. Automotive free cash flow was 2.2 billion according to them. Mkt cap is 44 billion. Doesn't strike me as irrationally underpriced based on those numbers. If Fiat does 3+ billion in FCF this year, it will not trade at a <10 billion valuation. Fiat does not appear undervalued currently on a trailing FCF basis (it generated <1 billion FCF last year), but it is undervalued if you believe (as most of us longs do) that it will generate substantial FCF in the coming quarters/years (this is something it has not done for several years). Link to comment Share on other sites More sharing options...
whatdadil9 Posted June 13, 2016 Share Posted June 13, 2016 Looks like this is trading on MACRO... Look at EWI ---> All Cap Italian index. Fiat is a large constituent. 8th largest...Well maybe thats before Ferrari spin. Bottom line this is not trading on fundamentals. What is the difference between 3x 2017 EPS and 1.5x 2017 EPS. 50 pct in market cap but zero in the eyes of an investor who thinks earnings are going down or will turn negative. Perhaps once people see that when SAAR goes to 14/15 we are still profitable things may change. Within this paradigm how does it change? Look on Bloomberg: Wace, AQR, DE Shaw, all the big quant funds are short. They must have an auto/saar thesis and view Fiat as weakest link. We need fundamental buyers to come in and put in a floor. Where are they? Maybe they come in after a downturn. Please tell me why they come in before? Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted June 13, 2016 Share Posted June 13, 2016 Look on Bloomberg: Wace, AQR, DE Shaw, all the big quant funds are short. They must have an auto/saar thesis and view Fiat as weakest link. We need fundamental buyers to come in and put in a floor. Where are they? Maybe they come in after a downturn. Please tell me why they come in before? Meh - let me know when you have an answer. I'll be buying until then. Was fortunate to have sold 25% of position at $14 per-Ferrari spin. Repurchasing that, plus more, at a combined value of $10 doesn't really bother me one bit. While I'm generally bearish on the economy, the value here combined with the management makes up for that. Even in a recession, I'd imagine the floor for auto sales should be higher than previous downturns given the average age of the fleet and the de-levering of the U.S. consumer. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted June 16, 2016 Share Posted June 16, 2016 Received my shares of the spin-off of RCS MediaGroup SpA. I haven't looked at financial statements or anything on the company because I was actually expecting to receive cash given that I'm a U.S. based investor through Scottrade. I will evaluate the company on its own merits to determine if I should hold or sell or buy more - but it's a such a paltry amount that I'd hate to pay the commission. Any of you have any experience getting rid of small amounts of stock from spin-offs etc. while avoiding commissions that are an outsized portion of the amount received? Link to comment Share on other sites More sharing options...
LC Posted June 16, 2016 Author Share Posted June 16, 2016 Any of you have any experience getting rid of small amounts of stock from spin-offs etc. while avoiding commissions that are an outsized portion of the amount received? Hold it till it goes to 0 (no commisions needed) or the stock price increases to a point where the commission is a small % of the final sale! Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted June 16, 2016 Share Posted June 16, 2016 Any of you have any experience getting rid of small amounts of stock from spin-offs etc. while avoiding commissions that are an outsized portion of the amount received? Hold it till it goes to 0 (no commisions needed) or the stock price increases to a point where the commission is a small % of the final sale! Those are the alternatives I had thought of myself, but was hoping there was another way to be able to settle for cash in situations like this. Maybe I can just wait until I finally transfer the account to IB and pay only $1 instead of $7.... Link to comment Share on other sites More sharing options...
karthikpm Posted June 16, 2016 Share Posted June 16, 2016 What's the ticker symbol for RCS Mediagroup ? I will have to call wellsfargo ( just like I did for Ferrari spin off) to make sure they post the transaction Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted June 16, 2016 Share Posted June 16, 2016 What's the ticker symbol for RCS Mediagroup ? I will have to call wellsfargo ( just like I did for Ferrari spin off) to make sure they post the transaction RZSMF It was something like 0.06 shares of RZSMF per share of FCAU, and the shares trade for about $0.80...so you'd need to own several thousand shares of FCAU to end up with anything appreciable. Link to comment Share on other sites More sharing options...
SwimmingNaked Posted June 16, 2016 Share Posted June 16, 2016 Kind of shows spinoff psychology at work, especially when the spun-off company is so tiny as % of parent. There is almost nothing that can motivate me to look at this thing. RCS mediagroup can go to hell for all I care, this is not what I invested in! Link to comment Share on other sites More sharing options...
EliG Posted June 16, 2016 Share Posted June 16, 2016 Any of you have any experience getting rid of small amounts of stock from spin-offs etc. while avoiding commissions that are an outsized portion of the amount received? Yes. My broker (TD Canada) is happy to help in these situations. All I have to do is call and ask nicely. They sell the position at the market price and waive the commission. Link to comment Share on other sites More sharing options...
merkhet Posted June 16, 2016 Share Posted June 16, 2016 http://www.prnewswire.com/news-releases/may-2016-fiat-chrysler-automobiles-sales-in-europe-583222141.html Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted June 16, 2016 Share Posted June 16, 2016 Any of you have any experience getting rid of small amounts of stock from spin-offs etc. while avoiding commissions that are an outsized portion of the amount received? Yes. My broker (TD Canada) is happy to help in these situations. All I have to do is call and ask nicely. They sell the position at the market price and waive the commission. Thanks - I had wondered about doing that, but wasn't convinced it would work. Thanks for your input. Link to comment Share on other sites More sharing options...
rohitc99 Posted June 16, 2016 Share Posted June 16, 2016 http://www.prnewswire.com/news-releases/may-2016-fiat-chrysler-automobiles-sales-in-europe-583222141.html This is what makes the whole thing even more perplexing. the price action alone would someone think that company is going to be out of biz soon. its as if almost all of the worst fears have come true - US in great recession, China in hard landing and btw, driverless cars already impacting sales. The closest i have seen something similar is when Noika or motorola got hit by iphone and atleast the numbers reflected that. Link to comment Share on other sites More sharing options...
whatdadil9 Posted June 16, 2016 Share Posted June 16, 2016 quants and macros r shorting based on brexit and saar peak story. value managers need to come in and they have not yet... i almost think that if SAAR goes down and profitability holds we would be better off... Link to comment Share on other sites More sharing options...
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