Penske Auto Group - Investing?

[SmartBob]

Anyone thinking about it? Some of you must have shares already. Your feelings? Is it ok to post this here? Buehler......Buehler....anyone? Google Linkage

[Old smart]

Not doing all that well lately: http://www.advfn.com/p.php?pid=qkquo...rch=NYSE%3APAG

[SmartBob]

That's my point. If they are low now, don't you think it'll pick up in January? $20 +-/share now would be a good buy in. Back in the early computer chip days I had opportunity but no $$ to invest in AMD(computer processors) at $4 a share....they had a cheaper, hotter product than Intel at the time....within a year it was up $100/share or so. Now of course it's around 12 but the point is to stay informed and know why it's gonna be hot and why it's not. PAG at a low eb now would be at a good time to invest perhaps?

[Old smart]

D'rather just have the smart of my preference.

[jonnysan]

PAG right now would be somewhat speculative but it IS a good time to get it at 20. I had it for around 6 mos...bought at 22.50 and sold at it near all time high of 24 so made alittle on it but that same $$$$ invested in SLB, for example would have been a real winner now. 500 shares of PAG would be an alright speculative play but as with any speculative play, make sure it is money you can afford to lose if the bottom drops out and you don't have yourself protected with a stop/sell order no more than 8% below where you bought it. JMHO and really humble in today's market climate!

[a2jack]

PAG still has two huge bumps in the road ahead: Consumers Reports' write ups, and/or getting in trouble with that tricky trans.

I do play the market from time to time, but in this case I will just let this one go by. "You don't need to own the cow to drink the milk".

A2jack.

[SmartAmerica]

All are having hard times and it appears it will last awhile.

General Motors Corporation
Daimlerchrysler AG
Ford Motor Co.

If I had some extra cash I would be looking into alternative transportation companies?

Most stockbrokers are ready to back their judgment with your last dollar.

Do your research and remember, one of most dangerous animal on Wall Street is not a bull or a bear, but a bum steer.

[lhoboy]

Originally Posted by SmartAmerica

Do your research and remember, one of most dangerous animal on Wall Street is not a bull or a bear, but a bum steer.

Good One!!!

[SmartAmerica]

Speaking of profit, Smart has yet to turn a profit. Any idea what Penske Automotive will make on the sale of each Smart car through their (Penske Automotive) distribution agreement with their selected dealers per unit?

Many say $200 to $300 per unit?

Penske management said they will have $0.02 to $0.04 cents a share costs associated with the launch of the new Smart vehicles.

According to sources this will be about $2.0 million to almost $4.0 million in after tax expenses. With a 37% tax rate we're talking about $3.0 million to $6.0 million bucks in expenses associated with Smart.

They may have more expenses when they actually go live distributing to the 50 to 60 dealers.

With the above expenses, it tells us, at 40,000 units 2 times their allotment the company needs to make $75 to $150 per Smart to break even.
This piece of the puzzle still confuses me. Penske Automotive made about $2,993 in gross profits per new vehicle in 2006 and $2,427 per used.

[lhoboy]

Originally Posted by SmartAmerica

Speaking of profit, Smart has yet to turn a profit. Any idea what Penske Automotive will make on the sale of each Smart car through their (Penske Automotive) distribution agreement with their selected dealers per unit?

Many say $200 to $300 per unit?

I can't believe that Peske is going into this with only a 2% gross margin. It is possible they would contemplate launching the brand on a planned first year 2% net profit basis (after all sales & marketing and general administrative costs are pulled out).