February 3, 2023

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Is Asbury Automotive (ABG) a Great Long-Term Buy?

Voss Funds, an expenditure administration firm, printed its fourth-quarter 2021 trader letter – a copy of which can be downloaded in this article. In Q4 2021, the Voss Price Fund, LP and the Voss Price Offshore Fund, Ltd., returned +13.6% and +14.3% to buyers web of expenses and fees, respectively, compared to +2.1% complete return for the Russell 2000, +3.9% price return for the Russell 2000 Worth, and +11.% total return for the S&P 500. Spare some time to verify the fund’s top rated 5 holdings to have a clue about their prime bets for 2022.

Voss Cash, in its Q4 2021 investor letter, mentioned Asbury Automotive Group, Inc. (NYSE:ABG) and talked about its stance on the business. Founded in 1995, Asbury Automotive Team, Inc. (NYSE:ABG) is a Duluth, Ga-dependent automotive retail firm with a $4.3 billion current market capitalization, and is at this time spearheaded by its CEO, David W. Hult. Asbury Automotive Team, Inc. (NYSE:ABG) delivered an 8.15% return because the commencing of the yr, whilst its 12-month returns are up by 2.99%. The inventory shut at $186.80 for each share on March 22, 2022.

Below is what Voss Cash has to say about Asbury Automotive Group, Inc. (NYSE:ABG) in its Q4 2021 trader letter:

Asbury Automotive is an car supplier that we acquired a short while ago at ~5x earnings and absolutely free money stream. We consider the stock’s value has been partly obscured by their new acquisitions along with car dealers acquiring derated noticeably around the previous couple months thanks to perceived fears of “over earning” in 2021 and 2022, as normal income per car has shot up thanks to supply constraints. We have built a framework of “normalized earnings” for 2023 and concluded that ABG trades at ~7x earnings compared to a historic variety of 7-15x, or all around 11x on common. We therefore believe that the inventory can rerate to 11x normalized earnings, or close to 40-50% increased from our acquire price of ~$160. Draw back should really be minimal offered the firm’s really frustrated multiples, although we will be looking at for an acceleration of premiums increasing which could whack what is at present pent-up need for cars.”

Car, Automotive, Oil

Car or truck, Automotive, Oil

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Our calculations display that Asbury Automotive Team, Inc. (NYSE:ABG) failed to get hold of a mark on our listing of the 30 Most Well-liked Shares Among the Hedge Cash. Asbury Automotive Team, Inc. (NYSE:ABG) was in 32 hedge fund portfolios at the close of the fourth quarter of 2021, in comparison to 22 funds in the former quarter. Asbury Automotive Team, Inc. (NYSE:ABG) delivered a 14.17% return in the earlier 3 months.

In March 2022, we also shared one more hedge fund’s views on Asbury Automotive Group, Inc. (NYSE:ABG) in a further write-up. You can obtain other letters from hedge funds and prominent buyers on our hedge fund investor letters 2021 Q4 webpage.

Disclosure: None. This short article is originally published at Insider Monkey.