Well attempted to post this over the weekend and completely fucked it up left the rules in then tried to fix it and still wasn’t right so I got pissed deleted it and moved on with my weekend.
AN I have seen mentioned a few times lately on the play to its downside. So I wanted to post to provide caution and I wanted to give the bullish side to this.
Vast direct knowledge of the retail auto industry obviously helps. AN is the powerhouse of a lucrative automotive industry. And nothing is different currently they have continued to add storefronts throughout the last year when retail automotive is at its highest valuations ever.
This is one of many acquisitions made by AN. Now to the not so bearish case on these guys.
The thing that differs for AN from the likes of CVNA or VRM is mainly a couple of things they are largely profitable and most notably in current times AN has new car store fronts. Over the last year the GPU (gross per unit) averages have been largely the same on used cars maybe a slight tick upward. However the GPU on new cars is up from prior to covid supply chain demand issues roughly 6x.
The demand for new or used cars hasn’t really dwindled new car stores have 6 months worth of sold orders in the order banks. That have all sold for MSRP or sometimes over.
Used car demand is still rampant as my current stores are still setting unprecented prior to 2021 profits and show no signs of slowing as June is off to a heater.
January and February are usually the worst retail months of the year and this year was no different however AN still posted sold Q1 results. March is usually one of the strongest months of the year and that stayed true again this year. April and May are also solid months typically again still true to form. So in summary to this point I’d expect overall units sold to be down for AN but their overall revenue to be up year over year. Slightly lesser units but drastically higher GPU means large profitability.
I’ve discussed this in other threads where we need to watch for downfall of Auto stocks is when we start to see a major influx of new car inventory which frankly drives the market. That’s not happening anytime remotely soon.
For the interest rate standpoint. Yes I am old and was im the automotive industry in 08 the last major dump. And what kept dealers going and the retail businesses was credit unions. And nothing has changed with that as large major banks rates tick up on mortgages and auto several points auto not quite as much most CUs are showing .25 or .50 upticks. This isn’t enough to directly affect the demand. With simply being so proficiently low. CUs don’t borrow money they primarily use members deposits etc to make the loans and pay dividend based on the amount of profit they record.
In summary of my long winded ness I’d expect AN to post solid Q2 numbers month. I don’t have any knowledge of their sales or history but I do know they are usually the behemoth of retail.