Latest news with #ColonialMotor
Yahoo
24-05-2025
- Business
- Yahoo
Colonial Motor (NZSE:CMO) Will Want To Turn Around Its Return Trends
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. However, after briefly looking over the numbers, we don't think Colonial Motor (NZSE:CMO) has the makings of a multi-bagger going forward, but let's have a look at why that may be. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for Colonial Motor, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.12 = NZ$41m ÷ (NZ$597m - NZ$254m) (Based on the trailing twelve months to December 2024). Therefore, Colonial Motor has an ROCE of 12%. In isolation, that's a pretty standard return but against the Specialty Retail industry average of 19%, it's not as good. View our latest analysis for Colonial Motor Historical performance is a great place to start when researching a stock so above you can see the gauge for Colonial Motor's ROCE against it's prior returns. If you'd like to look at how Colonial Motor has performed in the past in other metrics, you can view this free graph of Colonial Motor's past earnings, revenue and cash flow. When we looked at the ROCE trend at Colonial Motor, we didn't gain much confidence. To be more specific, ROCE has fallen from 15% over the last five years. Meanwhile, the business is utilizing more capital but this hasn't moved the needle much in terms of sales in the past 12 months, so this could reflect longer term investments. It may take some time before the company starts to see any change in earnings from these investments. On a separate but related note, it's important to know that Colonial Motor has a current liabilities to total assets ratio of 43%, which we'd consider pretty high. This effectively means that suppliers (or short-term creditors) are funding a large portion of the business, so just be aware that this can introduce some elements of risk. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower. In summary, Colonial Motor is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. And investors may be recognizing these trends since the stock has only returned a total of 37% to shareholders over the last five years. As a result, if you're hunting for a multi-bagger, we think you'd have more luck elsewhere. Colonial Motor does come with some risks though, we found 4 warning signs in our investment analysis, and 3 of those make us uncomfortable... For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
24-05-2025
- Business
- Yahoo
Colonial Motor (NZSE:CMO) Will Want To Turn Around Its Return Trends
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. However, after briefly looking over the numbers, we don't think Colonial Motor (NZSE:CMO) has the makings of a multi-bagger going forward, but let's have a look at why that may be. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for Colonial Motor, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.12 = NZ$41m ÷ (NZ$597m - NZ$254m) (Based on the trailing twelve months to December 2024). Therefore, Colonial Motor has an ROCE of 12%. In isolation, that's a pretty standard return but against the Specialty Retail industry average of 19%, it's not as good. View our latest analysis for Colonial Motor Historical performance is a great place to start when researching a stock so above you can see the gauge for Colonial Motor's ROCE against it's prior returns. If you'd like to look at how Colonial Motor has performed in the past in other metrics, you can view this free graph of Colonial Motor's past earnings, revenue and cash flow. When we looked at the ROCE trend at Colonial Motor, we didn't gain much confidence. To be more specific, ROCE has fallen from 15% over the last five years. Meanwhile, the business is utilizing more capital but this hasn't moved the needle much in terms of sales in the past 12 months, so this could reflect longer term investments. It may take some time before the company starts to see any change in earnings from these investments. On a separate but related note, it's important to know that Colonial Motor has a current liabilities to total assets ratio of 43%, which we'd consider pretty high. This effectively means that suppliers (or short-term creditors) are funding a large portion of the business, so just be aware that this can introduce some elements of risk. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower. In summary, Colonial Motor is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. And investors may be recognizing these trends since the stock has only returned a total of 37% to shareholders over the last five years. As a result, if you're hunting for a multi-bagger, we think you'd have more luck elsewhere. Colonial Motor does come with some risks though, we found 4 warning signs in our investment analysis, and 3 of those make us uncomfortable... For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
12-04-2025
- Automotive
- Yahoo
The Colonial Motor Company Limited (NZSE:CMO) boasts of bullish insider sentiment with 61% ownership and they have been buying lately
Insiders appear to have a vested interest in Colonial Motor's growth, as seen by their sizeable ownership 51% of the business is held by the top 14 shareholders Recent purchases by insiders AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. If you want to know who really controls The Colonial Motor Company Limited (NZSE:CMO), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 61% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn). And looking at our data, we can see that insiders have bought shares recently. This could signal that stock prices could go up and insiders are here for it. In the chart below, we zoom in on the different ownership groups of Colonial Motor. View our latest analysis for Colonial Motor Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index. Institutions have a very small stake in Colonial Motor. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too. We note that hedge funds don't have a meaningful investment in Colonial Motor. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Colonial Motor's case, its Senior Key Executive, Graeme Gibbons, is the largest shareholder, holding 10% of shares outstanding. With 6.4% and 5.7% of the shares outstanding respectively, James Gibbons and Ad Gibbons Trust are the second and third largest shareholders. A closer look at our ownership figures suggests that the top 14 shareholders have a combined ownership of 51% implying that no single shareholder has a majority. While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar. The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves. Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances. It seems that insiders own more than half the The Colonial Motor Company Limited stock. This gives them a lot of power. Given it has a market cap of NZ$219m, that means they have NZ$133m worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling. With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Colonial Motor. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. It seems that Private Companies own 13%, of the Colonial Motor stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research. It's always worth thinking about the different groups who own shares in a company. But to understand Colonial Motor better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Colonial Motor you should be aware of, and 3 of them make us uncomfortable. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
15-02-2025
- Automotive
- Yahoo
Calculating The Intrinsic Value Of The Colonial Motor Company Limited (NZSE:CMO)
Using the Dividend Discount Model, Colonial Motor fair value estimate is NZ$6.86 Colonial Motor's NZ$6.50 share price indicates it is trading at similar levels as its fair value estimate Colonial Motor's peers are currently trading at a premium of 842% on average Today we will run through one way of estimating the intrinsic value of The Colonial Motor Company Limited (NZSE:CMO) by projecting its future cash flows and then discounting them to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. Check out our latest analysis for Colonial Motor We have to calculate the value of Colonial Motor slightly differently to other stocks because it is a specialty retail company. Instead of using free cash flows, which are hard to estimate and often not reported by analysts in this industry, dividends per share (DPS) payments are used. This often underestimates the value of a stock, but it can still be good as a comparison to competitors. We use the Gordon Growth Model, which assumes dividend will grow into perpetuity at a rate that can be sustained. For a number of reasons a very conservative growth rate is used that cannot exceed that of a company's Gross Domestic Product (GDP). In this case we used the 5-year average of the 10-year government bond yield (3.2%). The expected dividend per share is then discounted to today's value at a cost of equity of 8.2%. Compared to the current share price of NZ$6.5, the company appears about fair value at a 5.3% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. Value Per Share = Expected Dividend Per Share / (Discount Rate - Perpetual Growth Rate) = NZ$0.3 / (8.2% – 3.2%) = NZ$6.9 We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Colonial Motor as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.2%, which is based on a levered beta of 1.177. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Strength Debt is well covered by . Weakness Earnings declined over the past year. Interest payments on debt are not well covered. Dividend is low compared to the top 25% of dividend payers in the Specialty Retail market. Opportunity Current share price is below our estimate of fair value. Lack of analyst coverage makes it difficult to determine CMO's earnings prospects. Threat Debt is not well covered by operating cash flow. Dividends are not covered by earnings. Valuation is only one side of the coin in terms of building your investment thesis, and it is only one of many factors that you need to assess for a company. It's not possible to obtain a foolproof valuation with a DCF model. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Colonial Motor, we've compiled three fundamental elements you should further research: Risks: For instance, we've identified 4 warning signs for Colonial Motor (3 are a bit unpleasant) you should be aware of. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! Other Environmentally-Friendly Companies: Concerned about the environment and think consumers will buy eco-friendly products more and more? Browse through our interactive list of companies that are thinking about a greener future to discover some stocks you may not have thought of! PS. Simply Wall St updates its DCF calculation for every New Zealander stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
