Author Topic: FCAU - Fiat Chrysler Automobiles  (Read 778479 times)

LC

  • Hero Member
  • *****
  • Posts: 2315
« Last Edit: September 03, 2015, 09:56:43 AM by LC »
"Lethargy bordering on sloth remains the cornerstone of our investment style."
----------------------------------------------------------------------------------------
brk.b | cash


DCG

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1550
    • Venture Blend
Re: FIATY - Fiat S.p.A.
« Reply #1 on: September 13, 2012, 02:46:34 PM »
Posted this in my 'Auto Manufacturers' thread as well, but I opened a position in FIATY yesterday. It looks super cheap to me.

jmaes

  • Newbie
  • *
  • Posts: 15
Re: FIATY - Fiat S.p.A.
« Reply #2 on: September 13, 2012, 03:00:37 PM »
You also might want to consider Exor (www.exor.com). They hold 30% of Fiat and 30% of Fiat industrial + some other investments. The Mackenzie Cundill funds own it, and Bestinver also owns it.

Sportgamma

  • Sr. Member
  • ****
  • Posts: 389
    • Fundamental Finance Playbook
Re: FIATY - Fiat S.p.A.
« Reply #3 on: September 13, 2012, 05:51:20 PM »
You also might want to consider Exor (www.exor.com). They hold 30% of Fiat and 30% of Fiat industrial + some other investments. The Mackenzie Cundill funds own it, and Bestinver also owns it.

I myself am long exor. They seem to actively manage value, f.e. by separating Industrial from Fiat group and the Chrysler deal seems to have been on very good terms.

Because they hold other assets and are levered on the liability side of the balance sheet as well, any upwards movement by Fiat will translate into similar nav gains as holding fiat directly. Also, the exor stock is trading at significant discount to nav (historically they trade with a conglomerate discount, just not that severe), so you get and undervalued stock within an undervalued holding company.



There is a heap of reports on the borsa italia website: http://www.borsaitaliana.it

Exor
- http://www.borsaitaliana.it/mediasource/star/db/pdf/87267.pdf

- http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=149&sender=null&docDate=&day=&month=&year=&numDoc=

Fiat
http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=125&sender=null&docDate=&day=&month=&year=&numDoc=

Fiat Industrial
- http://www.borsaitaliana.it/borsa/azioni/documenti/societa-quotate/studi-e-ricerche.html?search=Y&lang=en&tipology=null&company=1188&sender=null&docDate=&day=&month=&year=&numDoc=
« Last Edit: September 13, 2012, 06:01:30 PM by Sportgamma »

jmaes

  • Newbie
  • *
  • Posts: 15
Re: FIATY - Fiat S.p.A.
« Reply #4 on: September 14, 2012, 01:55:11 AM »
There is a heap of reports on the borsa italia website: http://www.borsaitaliana.it

Exor
- http://www.borsaitaliana.it/mediasource/star/db/pdf/87267.pdf


From the link above p.19 it seems like the preferred and savings shares are more interesting than the ordinary.  The only difference is that they are non-voting shares, have a higher dividend, and lower liquidity. As a result they often trade at a lower price than the ordinary shares.

Sportgamma

  • Sr. Member
  • ****
  • Posts: 389
    • Fundamental Finance Playbook
Re: FIATY - Fiat S.p.A.
« Reply #5 on: September 14, 2012, 04:51:49 AM »
There is a heap of reports on the borsa italia website: http://www.borsaitaliana.it

Exor
- http://www.borsaitaliana.it/mediasource/star/db/pdf/87267.pdf


From the link above p.19 it seems like the preferred and savings shares are more interesting than the ordinary.  The only difference is that they are non-voting shares, have a higher dividend, and lower liquidity. As a result they often trade at a lower price than the ordinary shares.

I think youŽre mistaken. From what I remember the preferred and saving shares will be converted into common the same way they did with Fiat. IŽll try to find the document later today.

Sportgamma

  • Sr. Member
  • ****
  • Posts: 389
    • Fundamental Finance Playbook
Re: FIATY - Fiat S.p.A.
« Reply #6 on: September 14, 2012, 09:34:00 AM »
I was mistaken. Exor has not announced anything about converting preferred and saving shares into ordinary. What I read was a passage in a report from Cheuvreux:
"In our view, the simplification of the holding structure would be the best
way for Exor to shrink the holding discount. The planned cancellation of
FIAT/FIAT Industrial non-voting shares could be the first step in this
direction. We believe a similar deal for Exor would have a beneficial
impact on the cost of capital, reducing dividend commitments."

However, if a mandatory conversion were to happen, it will most likely not be on a 1:1 basis. In the case of Fiat Industrial the conversion was as stated:
"...at the Extraordinary General Meeting held 5 April 2012, Fiat Industrial shareholders approved a resolution
for the mandatory conversion of preference and savings shares into ordinary shares at a conversion ratio of
0.700 ordinary shares per preference share and 0.725 ordinary shares per savings share;"
http://www.fiatindustrial.com/en-US/investor_relations/advices/FiatDocuments/Annuncio%20La%20Stampa_Fiat%20Industrial_135x420_ENG.pdf

In the case of Fiat the conversion rate was higher:
"preference shares will be converted into newly issued ordinary shares according to a conversion ratio of 0.850
ordinary shares for each preference share;
n savings shares will be converted into newly issued ordinary shares according to a conversion ratio of 0.875
ordinary shares for each savings share."
http://www.fiatspa.com/en-US/investor_relations/shareholders/FiatDocuments/Punto5_AssemblAzion_UK.pdf


jmaes

  • Newbie
  • *
  • Posts: 15
Re: FIATY - Fiat S.p.A.
« Reply #7 on: September 14, 2012, 02:20:03 PM »
Thanks for the update,

I found indeed those conversion rates for Fiat, but couldn't find anything for Exor.

DCG

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1550
    • Venture Blend
Re: FIATY - Fiat S.p.A.
« Reply #8 on: October 03, 2012, 01:53:03 PM »
Chrysler September sales up 12% from last year while Ford and GM sales were flat:

http://www.usatoday.com/story/driveon/2012/10/02/chrysler-general-motors-gm-ford-us-september-sales/1607997/

jch548

  • Jr. Member
  • **
  • Posts: 97
Re: FIATY - Fiat S.p.A.
« Reply #9 on: October 03, 2012, 07:09:13 PM »
I'm pretty bullish on Fiat also. There are a number of catalyst that could move the shares substantially higher. Just hitting Marchionne's profit margins for Chrysler could double the shares. Still, Fiat needs to gain 80% control of Chrysler before they can go after their cash flows. I'm wondering if Fiat will need to ask for government assistance in Italy if they bleed for another year.