RACE

Ferrari N.V.

Industrial/Transportation


Presented:01/21/2016
Price:$40.54
Cap:$7.66B
Current Price:$470.77
Cap:$84.62B

Presented

Date01/21/2016
Price$40.54
Market Cap$7.66B
Ent Value$8.10B
P/E Ratio22x
Book Value$14.30
Div Yield0%
Shares O/S188.92M
Ave Daily Vol949,884
Short Int2.63%

Current

Price$470.77
Market Cap$84.62B
Ferrari NV is a holding company which manufactures luxury sports cars. Ferrari's models include the F12Berlinetta, 488GTB, 488 Spider, 458 Speciale, California T, the LaFerrari Hybrid, LaFerrari and the FF four-wheel drive. The company participates in car racing such as Formula One. The company was founded by Enzo Ferrari in 1947 and is headquartered in Maranello, Italy.

Publicly traded companies mentioned herein: Ferrari NV (RACE), Fiat Chrysler Automobiles NV (FCAU), Ford Motor Company (F)

Highlights

The presenter briefly reviewed Ferrari’s (RACE) October 2015 IPO and explained that he began to research the company as a potential long because he thought the pricing power (due to inelastic demand for products), “capital-light” business model story was interesting. However, what he found with Ferrari made him question whether or not RACE should trade at 3x the multiple of its peers. Chairman Sergio Marchionne is “a great promoter” who has created value over time (i.e., spinning off both Fiat’s industrial business, & now Ferrari); but there is very little left at Fiat besides Jeep and Maserati (with the latter “a mess”). In his opinion, RACE is trading at a multiple that is likely going to be difficult to maintain given increasing competition, Ferrari’s model mix and normalized pricing “power,” and the need for future R&D expenditures. Overall, the presenter said he really doesn’t understand why investors believe in the RACE story at present levels (~$41) - even after a selloff from the $50s post-IPO.

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