Hi,
For subscribers not familiar with PWR it’s a $429mn NSW retailer of new & used vehicles. The company has only been listed since 2021 but over that time it has paid a strong dividend and is currently estimated to yield more than 9% over the coming year. However, the stock has fallen over -35% in this time while the broader market has pushed to new all-time highs.
Eagers Automotive (APE) is obviously the biggest in this space and after a fantastic bump during 2020/21, the momentum in that business has eased. Without knowing PWR as intimately, we would suspect they listed after a strong period of growth, and the numbers have not been replicated since IPO causing some disappointment and thus pressure on the stock.
- We are neutral the stock taking the above into account although ~$2.50 the underlying metrics do look solid.
- One to add to the radar for our Emerging Companies Portfolio.