BENCHMARKS
Used AP Eagers, AHG and Penske, Lithia and Auto Nation in US.
PROFITABILITY
EBIT TO SALES for Autosports 3% versus others in range 3 to 5%.Autosports at low end of range.
ASSET MANAGEMENT
ROA for Autosports at 15% versus others in range 9 to 11%. Autosports a good performer.
Sales to inventory for Autosports at 6.8 times versus others in range 5.3 to 6.8 times. Autosports a good performer.
OTHER ISSUES
Autosports significantly smaller than all other players.
Autosports operating a very asset light business with Sales to Operating Assets at 4.7 times versus others in range 2.4 to 3.2 times. I believe this is important. In short, a clean business with little historical baggage.
PRICING
Again, reasonable to good businesses being sold at outrageous prices. What's new.
At proposed market cap for Autosports you are paying 58% goodwill versus rest in range 36 to 50% . Autosports vendors are wanting a lot of blue sky in their price.
SUMMARY
Using average USA pricing then Autosports worth $2.20.
Using average Australian pricing then Autosports worth $2.50
Current range for IPO is $2.10 to $2.40.
CONCLUSION
It's a small IPO so cannot imagine that overseas instos will buy.
At low end of range there is money to be made and at high end will be risky.
Probably worth a small punt.
