Saturday, February 11, 2017

"With an all new Jeep design coming for 2018 and a new Dodge Challenger SRT Demon muscle car coming, things are looking quite glowing at Fiat Chrysler Automobiles N.V. . I must credit this idea to Mr. Bill Miller of Legg Mason fame."

Dow Jones Industrial Average 20,269.37 (Up) Week ending 02/10/2017
S & P 500 - 2316.10

I was watching an interview with Bill Miller of Legg Mason Value Trust fame and Chairman and CEO of LMM LLC Investment management services and they asked him about the stocks he was investing in now and he said he couldn't say because of confidentiality. But then the interviewer, (CNBC and Barrons), said which stocks can you talk about now and he said he liked and owned Fiat Chrysler Automobiles N.V. (Symbol FCAU), and he said he liked the execution of the company's "5 Year plan" which runs from 2013 to 2018.

I have to honestly say I had never thought much about this company or even the auto group other than the parts sellers, but I do know some people that are waiting for the new 2018 Jeep redesign.  Always in search of a good Value stock, I decided to investigate. 

FCAU earned $2.04 per share in 2016 and is projecting 2017 per share earnings of $2.41 per share. Bill Miller contends that the 2018 per share earnings may look as high as $4.50 per share!  The 2017 forward PE is 4.13. If Bill Miller is correct,  the 2018 forward PE could be 2.39.  The stock is trading right now at $10.75 per share. Now you have my attention! (Flashback of Subaru stock in olden days trading at $8 per share like forever and then shooting up to $90).

Then there is the Dodge Challenger SRT Demon. It boast the highest horsepower engine of all the current muscle car group, 707 HP. Being a former 67 GTO owner I am suitably impressed and car shows and auctions are all the rage right now. 

So what about the muscular stats for FCAU stock. The company is actually trading currently at 0.76 of book value. The stock YTD is up 17.87% and up 79.47 for one year. EPS for the next 5 years is supposed to go up 18% per year.

The target price of the stock is $15.28 but should move higher. The Current Ratio is 1.27. The Investors Business daily has them ranked as a 72 D and the 2nd highest ranked stock in this group. 

The analysts on the stock are 8 Buy, 1 Out perform and 10 hold. (Also 5 sells, they hate the autos!). FCAU in January introduced the concept of the Electric Mini-Van.

Oh , and did I mention that this U.K. manufacturer also owns 
Alfa-Romeo, Maserati and Ferrari.
Ferrari just doubled their Net Income in the fourth quarter.  With Trump in as President of the USA, everyone is going to be rich and buying these cars.

So we buy FCAU here at $10.75, and watch the 5 Year Plan roll out, and save up the money for your new Maserati.

Sounds like a good plan to me. Let the races begin!