SG Fleet - 500 Beiträge pro Seite

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...mobility operator aus OZ

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Antwort auf Beitrag Nr.: 60.949.939 von R-BgO am 03.07.19 21:36:56

Surprising quality at an attractive price
https://foragerfunds.com/news/two-stocks-for-a-low-interest-…

The investment proposition at fleet management company SG Fleet (SGF) is not dissimilar. SG Fleet manages fleets of vehicles on behalf of government and corporate clients. For a large client that can mean thousands of cars. Fleet management systems need to integrate with procurement, finance and compliance. Drivers need to be in the loop too.

Five main players account for about two thirds of the industry. There doesn’t seem to be dramatic differences between the product offerings and competition for new clients is fierce.



Once again, though, large industry participants earn very healthy returns on shareholders’ capital. There are efficiency benefits to size. And, once a customer has chosen their fleet management provider and integrated the service into their operations, moving to a competitor can be costly, time consuming and risky.

This means for a new competitor, simply replicating SG Fleet’s assets is not nearly enough to assure a return on investment. There has been no new competition of scale in the past four decades. All of the five largest fleet managers have been around since the 1980s.

The average customer life for SG Fleet’s largest clients was 11 years according to the company’s 2014 prospectus.

A recession in Australia wouldn’t be helpful. Corporate clients might reduce demand for new vehicles but even if growth slows, the total fleet size should be stable given the mostly non-cyclical customer base. And about one third of SG Fleet’s business is with retail leasing clients, where demand is already diminished. The balance sheet is strong and the long-term structural tailwinds to fleet outsourcing are helpful. There is also the possibility of further accretive acquisitions.

South African fleet management business Super Group owns 59% of the company and the capital allocation track record under its watch has been sound. Robbie Blau, the CEO, personally owns $20m in shares.

The business is attractively priced at an 11 times price-to-earnings ratio and pays a 6% fully-franked dividend yield. At the very least, we think that is sustainable.

Both SG Fleet and Smartgroup have been added to the Forager Australian Shares Fund portfolio in recent months. Healthy yields, robust businesses and strong shareholder alignment are just what the doctor ordered in a world of zero interest rates.

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