Ferrari (NYSE:RACE) This Company is Running

Ferrari (NYSE:RACE) This Company is Running

$RACE

The most you can lose on any stock is 100% of your money, more if you are playing on margin.

But when you pick a company that is really running, you can make a lot.

For example: Ferrari’s (NYSE:RACE) share price has risen 185% in the last 3 years. Nice, if you bought and held the stock on the Breakout in July 2016.

Ferrari was able to grow its EPS at 28% per year over 3 years, sending the share price higher. In comparison, the 42% per year gainer in the share price outpaces the EPS growth. Thus, suggesting that, as the business grew over the last few years, it gained the confidence of the mark.

The image below shows how EPS has tracked over time.

NYSE:RACE Past and Future Earnings, December 11th 2019
NYSE:RACE Past and Future Earnings, 11 December 2019

It’s probably worth noting that the CEO is paid less than the median at similar sized companies, but a more important Question is whether the company will grow earnings throughout the years.

As well as measuring the share price return, investors should also consider TSR (total shareholder return). As, he share price return only reflects the change in the share price, the TSR includes the value of reinvested dividends and the benefit of any discounted capital raising or spin-off.

It is fair to say that the TSR gives a more complete picture for stocks that pay a dividend.

In the case of Ferrari, it has a TSR of 192% for the last 3 years. That exceeds its share price return previously mentioned, its dividend payments largely explain the divergence!

Pleasingly, Ferrari’s total shareholder return last year was 58%. That’s including the dividend. That is better than the annualized TSR of 43% over the last 3 years. These improved returns hints at real business momentum, implying that now could be a great time to dive deeper.

Ferrari is the Aristocrat of the automotive sector.

Enzo Ferrari’s iconic Italian Supercar manufacturer claimed the title according to the latest Brand Finance Global 500 2019 report launched at the World Economic Forum in Davos.

HeffX-LTN overall technical outlook for RACE is Very Bullish, overhead resistance is 168.81, and Key support at 164.55, as all Key indicators are Bullish and the stock has established long term support ahead of this breakout.

Ferrari finished at 165.37, +0.53 Wednesday in NY.

Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I see it at 200+/share in that frame.

Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I see it at 200+/share in that frame.

Stay tuned…

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.