Is Asbury Automotive (ABG) a Great Long-Term Buy?

Voss Funds, an financial investment management company, printed its fourth-quarter 2021 investor letter – a duplicate of which can be downloaded below. In Q4 2021, the Voss Benefit Fund, LP and the Voss Benefit Offshore Fund, Ltd., returned +13.6% and +14.3% to traders web of charges and fees, respectively, in contrast to +2.1% complete return for the Russell 2000, +3.9% rate return for the Russell 2000 Price, and +11.% overall return for the S&P 500. Spare some time to verify the fund’s major 5 holdings to have a clue about their best bets for 2022.

Voss Capital, in its Q4 2021 trader letter, stated Asbury Automotive Group, Inc. (NYSE:ABG) and talked about its stance on the business. Founded in 1995, Asbury Automotive Team, Inc. (NYSE:ABG) is a Duluth, Ga-based mostly automotive retail business with a $4.3 billion marketplace capitalization, and is at this time spearheaded by its CEO, David W. Hult. Asbury Automotive Team, Inc. (NYSE:ABG) sent an 8.15% return considering the fact that the starting of the calendar year, although its 12-month returns are up by 2.99%. The inventory shut at $186.80 per share on March 22, 2022.

Right here is what Voss Capital has to say about Asbury Automotive Group, Inc. (NYSE:ABG) in its Q4 2021 investor letter:

Asbury Automotive is an car vendor that we procured not long ago at ~5x earnings and free of charge hard cash flow. We believe the stock’s benefit has been partly obscured by their new acquisitions alongside with auto dealers possessing derated drastically about the previous several months thanks to perceived fears of “more than earning” in 2021 and 2022, as typical profit for every motor vehicle has shot up owing to offer constraints. We have manufactured a framework of “normalized earnings” for 2023 and concluded that ABG trades at ~7x earnings as opposed to a historic assortment of 7-15x, or close to 11x on regular. We as a result believe that the inventory can rerate to 11x normalized earnings, or all-around 40-50% increased from our invest in cost of ~$160. Draw back really should be minimal presented the company’s pretty frustrated multiples, although we will be viewing for an acceleration of rates elevating which could whack what is at the moment pent-up demand from customers for motor vehicles.”

Car, Automotive, Oil

Auto, Automotive, Oil


Our calculations clearly show that Asbury Automotive Group, Inc. (NYSE:ABG) unsuccessful to obtain a mark on our listing of the 30 Most Preferred Stocks Between Hedge Money. Asbury Automotive Group, Inc. (NYSE:ABG) was in 32 hedge fund portfolios at the stop of the fourth quarter of 2021, when compared to 22 cash in the earlier quarter. Asbury Automotive Team, Inc. (NYSE:ABG) shipped a 14.17% return in the previous 3 months.

In March 2022, we also shared yet another hedge fund’s views on Asbury Automotive Team, Inc. (NYSE:ABG) in a different short article. You can locate other letters from hedge cash and outstanding traders on our hedge fund trader letters 2021 Q4 webpage.

Disclosure: None. This short article is originally printed at Insider Monkey.

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