ASX Watch: Has Autosports Turned the Tide?

41

How does a 45% gain on your investment in just eight months sound?

That’s exactly what’s happened for investors of Autosports Group Limited [ASX:ASG].

But here’s where it gets really interesting. In the last two days alone, the share price has risen just under 20%

If you’re wondering why, stick around to find out…

Who is Autosports?

Autosports is a dealer company selling prestige and luxury cars, both new and secondhand. It also offers services like financing and insurance.

The company has been in operation since 2006. Today, it operates 18 new-car dealerships and two used-car dealerships.

These dealerships are based out of Sydney, Melbourne and Brisbane. The company also operates two collision repair workshops.

It’s worth noting that Autosports represents car brands like Audi, Bentley, Alfa Romeo and Maserati, to name a few.

It listed on the ASX in November 2016. Today, it has a market cap of $251 million.

This is a relatively small company specialising in a specific niche.

So, why did the share price jump nearly 20% in the last two days?

Autosports’ latest results

On 29 August, Autosports released its full-year statutory accounts.

On face value, the results were very mixed.

The company generated a net profit after tax (NPAT) of $22 million.

This result is in spite of the fact that luxury cars on the east coast declined by 11.6% in 2019.

Australia's Next Great Boom

If Callum Newman’s analysis is right, Australian resources are at the beginning of a comeback. This report explains Callum’s ‘case for commodities’ for this year and next. Plus, get a free subscription to Australia’s newest, most forward-looking daily investment email, Profit Watch. Enter your email address below and click ‘Send Me My FREE Report’.

We will collect and handle your personal information in accordance with our Privacy Policy. You can cancel your subscription at any time. Read our FAQ

Autosports was able to weather this decline thanks to its parts and service department, along with its collision repair workshops. This part of the business contributed 48% of ASG’s total revenue in 2019.

If you have been looking into Autosports, here are some points to keep in mind.

The company has $67.7 million in debt. This is not unusual for a small company, although we do want to see ASG pay this down over time.

What’s next for Autosports?

The latest financial results from Autosports are generally positive, given the overall market conditions. Consequently, investors were excited about it.

If ASG’s share price move over the last two days is the beginning of the next run, then this company deserves a place on your watch list.

This is not a recommendation to buy or sell ASG. It is an update only. I hope you found it useful.

Until next time,

Jonathan Evans,

Analyst, Profit Watch

Australia's Next Great Boom

Why we could be on the cusp of the biggest bull market of all time. This report explains Callum’s ‘case for commodities’ for this year and next. Plus, get a free subscription to Australia’s newest, most forward-looking daily investment email, Profit Watch. Enter your email address below and click ‘Send Me My FREE Report’.

We will collect and handle your personal information in accordance with our Privacy Policy. You can cancel your subscription at any time. Read our FAQ