My answer here is based on heuristics & it could be the case that STLA is cheap enough here to make it worth it. I have not looked at STLA besides a quick look in tikr.com
And the heuristic is: car OEMs because they are "bad businesses" and I just avoid them.
Distributors on the other hand should be less cyclical, less capital intensive/better cash conversion & have higher returns (ROE/ROCE...). More robust in a downturn.
I like Inchcape now because of the pending sale of UK retail business and the transformation into more and more of a pure play distribution business. This could be an inflection point for the stock.
That said, Inchcape still got hit in 2020. Historical results haven't been amazing, but seems like FCF was always there. STLA on the other hand has been on quite a tear lately.
An investment in Inchcape here is more about the next 2-3 years showing growing earnings and an improved business.
Why would you buy Inchcape, and not Stellantis, they're correlated, and Stellantis is way cheaper?
My answer here is based on heuristics & it could be the case that STLA is cheap enough here to make it worth it. I have not looked at STLA besides a quick look in tikr.com
And the heuristic is: car OEMs because they are "bad businesses" and I just avoid them.
Distributors on the other hand should be less cyclical, less capital intensive/better cash conversion & have higher returns (ROE/ROCE...). More robust in a downturn.
I like Inchcape now because of the pending sale of UK retail business and the transformation into more and more of a pure play distribution business. This could be an inflection point for the stock.
That said, Inchcape still got hit in 2020. Historical results haven't been amazing, but seems like FCF was always there. STLA on the other hand has been on quite a tear lately.
An investment in Inchcape here is more about the next 2-3 years showing growing earnings and an improved business.
Do you own/ like STLA?