UPDATE: PEUGEOT

Tavares steering in the right direction for us

Tavares steering in the right direction for us…

 

  • UG was hit hard on what the market perceived to be unambitious mid-term targets announced under Tavares’s “Back in the Race” plan on Monday
  • The stock is still 5% lower than pre-announcement, which we believe is an over exaggeration hindered further by a poor market backdrop
  • We believe the plan is clearly thought out; streamlining operations and targeting positive op free cash flow by 2016 at the latest. The plan is similar to those which helped Renault rebound from 2009
  • Natixis said following their recent road show “targets have been set conservatively” as Tavares wants to give the plan credibility. The targets set by Tavares will in our opinion be met well before the “Back in the Race” plan and could even see them return to profit this year
  • UG is the most leveraged to Europe where recent auto sales data have all outperformed expectations and the fleet is the oldest it has ever been
  • UG is a great medium-term European equity restructuring play. This pull back is an opportunity to get back in to the name at an interesting level
  • We are still bulls on Europe for 2014 and France in particular
  • One of our top picks for 2014. Don’t doubt Tavares

 

 Tue, 18 Mar 2014 10:38

 

  • Success of the new Peugeot 308 with 60,000 orders already booked
  • Launch of the Peugeot 308 SW in April
  • Company announced introduction of a night shift starting on 2 June 2014 -600 jobs created and 450 temporary employees recruited (Link)
  • Doesn’t sound like a company struggling
  • Still one of the most shorted stocks out there
  • RNO vs UG still a lot of catch up

 

 

  • The announcements this morning have done the job..details of the numbers look good,alot less cash burn than estimated. So far so good now over to Tavares..
  • Short interest up at ~26% and the borrow is maxed out…Lets see what Tavares says later but hopefully this is the start of the journey

 

 Tue, 18 Feb 2014 16:06

PEUGEOT….The three Lions….Time to Roar

 

  • Family/French state/Dongfeng
  • Numbers and most likely details of the rights issue tomorrow and the future direction with the three lions in charge making the Peugeot investment case compelling
  • Tomorrow should put to bed any cash flow issues
  • They’ve had a cap increase before and it didn’t go well. This time however the Chinese are there for the lot
  • Peugeot is attempting to cut its cash burn of €3bn last year by half in 2013
  • The case is becoming compelling post the rights..
  • Europe car fleet is oldest it has been. Peugeot has around half its sales in Europe so is the most exposed
  • Dongfeng will open up massive new markets to them
  • Faurecia stake worth EUR 1.8/9bn may well be +ve news around the Faurecia and Banque PSA stake tomorrow
  • With Carlos Tavares the new man from RNO in charge they have a man with the pedigree and a reputation as a go-getter to keep the plan on track
  • Clarity on the rights tomorrow and remember after the event the state will not sell, nor will the Chinese and certainly not the family
  • We prefer to own the new rather than the old. There will be some chin scratching from funds but in the end there will be only one conclusion, you have to have them.
  • Whatever happens when the rights issue is announced it will happen fast and could be the last liquidity event in this name…Be ready to act