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  • Writer's pictureMJ

๐ŸŽ๏ธ Why Aston Martin is back at Pole Position of MJ_Lux Portfolio? ๐Ÿคตโ€โ™‚๏ธ

๐ŸŽ๏ธ ๐™’๐™ƒ๐™” ๐˜ผ๐™Ž๐™๐™Š๐™‰ ๐™ˆ๐˜ผ๐™๐™๐™„๐™‰ ๐™„๐™Ž ๐˜ฝ๐˜ผ๐˜พ๐™† ๐˜ผ๐™ ๐™‹๐™Š๐™‡๐™€ ๐™‹๐™Š๐™Ž๐™„๐™๐™„๐™Š๐™‰ ๐™Š๐™ ๐™ˆ๐™…_๐™‡๐™๐™“ ๐™‹๐™Š๐™๐™๐™๐™Š๐™‡๐™„๐™Š?๐Ÿคตโ€โ™‚๏ธ

I have written about Aston Martin and its brand value multiple times. Since I did, we made 150% on the stock and 750% with leverage X5. Check this post from 07.05.2020:

The brand value is still 2X bigger than the current market cap, all this while Aston Martin has been competing in Formula 1, launched its SUV that is selling like hot cakes (DBX) and is now back to being top of mind for nearly everyone around the world with James Bond new movie โ€“ No Time To Die. (Yes, it is time to go back to $CINE.L (Cineworld Group PLC) AMC etc!! )

The closest competitor is naturally $RACE (Ferrari NV) with market cap of 38.5B and Revenue of 4.8B compared to 2.23B and 1B for Aston Martin. To make simple arithmetic, Ferrari is maxing 4.8X the Revenue of Aston Martin (the latter will likely increase much faster) but is worth 17.3X. Put differently, if we divided 38.5 by 4.8X to arrive at estimated value of Aston Martin given Race metrics of Market Cap to Revenue, we would arrive at 8B, which is exactly where I think Aston should be right now. 4X more than it is trading today. That makes it one of the safest and most interesting investments for me out there.

Interestingly, Aston Martin is -7% YTD where a lot of UK stocks have been performing relatively well ($UK100 is c.10% up YTD). We have been consolidating between 1800 and 2200 for some time and I think it is time to attack 3000.

Some of you may point to Aston Martin debt and it is indeed perhaps the main concern. Debt to Capital at 63% is not too bad though and the DBX cash cow is helping lowering the debt every day. Revenue Projection is 1.5B in FY3 which is nearly 50% growth in 3 years. Gross margins are also looking pretty healthy, given the Aston Martin focus on Luxury segment, which again, is closer to Ferrari than $PAH3.DE (Porsche Automobil Holding SE)

Geographic Revenue Background is also important to emphasise. Aston is a truly global business with 30% of Revenue coming from EMEA, 26.5% from Americas, 26% from Asia Pacific and 17% from the UK. This is very important to consider! Many of you will say that UK is suffering badly (FTSE is trading at PE of 11, 50% cheaper than SPX500!), but you can clearly see that it is not even a 5th of $AML.L (Aston Martin Lagonda Global Holdings PLC) business. Naturally, they are HQed in Silverstone and recently invested ยฃ200M into new campus for Formula 1 success.

Aston Martin confirmed Stroll and Vettel for 2022 and have just appointed Former McLaren F1 team boss Martin Whitmarsh into a new senior management role. He will become the Group CEO of a newly-created Aston Martin Performance Technologies, which will include the F1 team. Whitmarsh, 63, worked at McLaren for 25 years and was principal from 2008 to 2014, with now-seven times world champion Lewis Hamilton winning his first title with the Woking-based team in 2008.

To sum up, Aston Martin is doing extremely well as a business. For me, the most important factor as an Investor is the new DBX which is often called the best SUV on the market. It is the biggest cash cow for $AML.L similarly to what Cayenne and Macan are for Porsche. Formula 1 is brining a lof of wealthy eye-balls and Lawrance Stroll has Championship ambitions, hence the appointment of Martin Whitmarsh. What is more, Aston is doing a fantastic job in PR and Marketing (assessing with expert eye) and the new Bond will only remind everyone of its powerful brand and amazing cars such as DB5. With all that, I say it is time to send the stock at least 50% up!

Who is with me?

J, ๐Ÿ…œ๐Ÿ…™

PS. All my investments and portfolio are public. To join eToro please follow the link:

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