Home' Forge : Vol 2 No 4 Contents wealth creator // 107
from a $1.50 issue price to $3.12.
PWR’s customised radiators
and intercooling systems
are used in Formula One,
NASCAR, V8 Supercars and rally
Another float, MotorCycle
Holdings, has rallied. After raising
$46 million in April 2016, the
motorcycle dealership’s issued
shares doubled to $4, before easing
to $3.31. MotorCycle Holdings
upgraded its prospect forecasts
in July – always a good sign for
a float. All too often, IPOs revise
their earnings lower within a
year of listing, and the share price
Gray Television, Inc. (GTN) is
another star IPO. The fast-growing
media company provides radio
and television traffic reports.
You’ve probably heard one of their
spokespersons give the traffic report
from a helicopter (brought to you
by a paying advertiser, of course),
but you may not realise that they
charge big dollars for traffic-report
sponsorships. GTN has soared
71 per cent since listing in June.
A 2014 float, Bapcor (previously
Burson Group) has been one
of the best IPOs in years. The
impressive parts distributor has
increased more than threefold
from its $1.82 issue price. Bapcor is
supplying parts to more mechanics,
and is growing quickly.
The doyen of car-related stocks
in recent years, Carsales.com, has
returned 27 per cent over a year.
Carsales’ share-price gains have
been a little flat over three years
by its standards, but it remains a
terrific long-term performer and is
superbly positioned in its market.
ARB Corporation, another well-
supported car stock among small-
cap fund managers, has returned 35
per cent over one year. The maker
and distributor of four-wheel drive
parts has returned an average 23
per cent annually over 10 years.
Few small-cap stocks in Australia
or overseas have delivered such
consistently high returns over a long
period. Take a bow, ARB.
Listed panelbeater AMA Group has
delivered a 21 per cent return over
12 months, and traded near its 52-
week high of $1.12 as this article was
prepared. AMA is consolidating the
fragmented panelbeating industry,
and benefiting as more cars on
the road inevitably lead to more
accidents and demands for repairs.
Car dealership stocks A.P. Eagers
and Automotive Holdings Group
have returned 17 per cent and eight
per cent respectively, after stronger
gains earlier this year. Automotive
Holdings, 19.8 per cent owned by
A.P. Eagers, has been long touted as
a takeover target.
Supercharger manufacturer Sprintex
leads the pack with a 317 per cent
return over one year. Gains are
off a low base, and Sprintex has
underperformed over five years.
But the micro-cap is getting much-
needed traction with sales growth,
and narrowing its losses.
The average gain in car-related
stocks would have been even
stronger had Forge included lithium
producers and explorers. Lithium
stocks boomed this year amid
expectations of soaring demand for
lithium-ion batteries made by Tesla,
and other car manufacturers that are
developing next-generation electric
cars with longer battery lives.
Orocobre looks to be the pick of the
lithium stocks. The South America–
focused miner is developing
the Olaroz lithium project as a
joint venture with Toyota Tsusho
Corporation and Jujuy Energia y
Mineria Sociedad del Estado. It has
returned 110 per cent over one year.
Galaxy Resources, General Mining
Corporation, Pilbara Minerals,
Neometals and Altura Mining were
other strong lithium performers.
Doubts persist about the longevity
of the lithium boom, and whether it
is yet another mining fad that will
bust. Several lithium stocks were
well off their share-price high as
Forge went to press. But the few in
production, such as Orocobre, have
reasonable long-term prospects as
more international lithium battery
megafactories come on stream in the
next few years.
Not all car-related stocks have
performed. Former market darling
Infomedia is slightly down over
one year. It distributes car-parts
catalogues through a global
network – an impressive service
offering, but one that has been
volatile in the past few years.
Another former star, iCar Asia, is
down 55 per cent over one year
(although it is still up on its 20-cent
issue price). iCar Asia, chaired by
Australian entrepreneur Patrick
Grove, wants to be the Carsales
of South-East Asia, and counts
Carsales as a key investor.
Investors loved iCar ’s prospects
in large South-East Asian markets,
but its conversion of rapid traffic
growth into earnings has been
slower than expected.
Long list of challenges and
opportunities for the car industry
Car-related stocks have plenty of
short-term obstacles: a difficult
economy, record-low wages growth
and consumer nervousness, to
name a few. Growth in car sales
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