tag:blogger.com,1999:blog-2080506270244832638.post7508017209123321182..comments2024-03-28T07:17:13.573-05:00Comments on Clark Street Value: LMP Automotive: Car Dealer Rollup Gone Bad, Pursuing a SaleMDChttp://www.blogger.com/profile/10679835609782815537noreply@blogger.comBlogger36125tag:blogger.com,1999:blog-2080506270244832638.post-71411181059731896842023-09-15T12:57:51.877-05:002023-09-15T12:57:51.877-05:00Now that we have $7.42 in total distributions afte...Now that we have $7.42 in total distributions after mgmt was quoted as saying $10.5-11.5(ish), can anyone shed light on how much stock mgmt owns, or has owned? Even if the remaining value is cut in half, it's a 5x bagger for those that can buy expert market. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-72469813224213664012023-02-05T09:41:12.390-06:002023-02-05T09:41:12.390-06:00I haven't been following it closely because it...I haven't been following it closely because it went dark. I can't buy dark stocks, I'm guessing that is at least part of driving the stock down, most investors can only sell and not buy.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-11670920723361577332023-02-05T08:22:39.035-06:002023-02-05T08:22:39.035-06:00Was curious to know how this is rolling out. I saw...Was curious to know how this is rolling out. I saw that they closed the deal for their FL dealerships in December, and should close another one for a couple of kia, WV and Subaru dealerships around March.<br /><br />Seems like distribution of proceeds hasn't started yet, but couldn't (wasn't able to) find what the timing of liquidation is supposed to look like. So I'm wondering what is driving the stock down since Sept and if I'm missing something here.<br /><br /><br /><br />Any update Spritediethttps://www.blogger.com/profile/10025960750352054628noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-41518190002009972912022-08-09T19:07:45.082-05:002022-08-09T19:07:45.082-05:00My guess is they will be current on their financia...My guess is they will be current on their financials prior to soliciting votes to liquidate, so we'll see everything prior.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-49649621214550312112022-08-09T17:28:34.204-05:002022-08-09T17:28:34.204-05:00Good call here, and thanks again for the write-up....Good call here, and thanks again for the write-up. Will be good learning to see what I got wrong. Dumb question. Do you know if they are obligated to release the delayed financials after they liquidate? Would love to know if they just timed this perfectly, benefited from paying a low purchase price, benefited from a rapid increase in RE value, or benefited something else that I missed. jakclallyhttps://www.blogger.com/profile/17221562776635618768noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-56153734646347136402022-08-08T09:46:56.427-05:002022-08-08T09:46:56.427-05:00https://seekingalpha.com/pr/18895132-lmp-automotiv...https://seekingalpha.com/pr/18895132-lmp-automotive-holdings-inc-and-affiliates-enters-all-cash-asset-sale-agreements-and-intends?source=content_type%3Aall%7Cfirst_level_url%3Aportfolio%7Csection%3Aportfolio_content_unit%7Csection_asset%3ApressReleases%7Cline%3A9<br /><br />Might have actually gotten one right. LMPX says the ultimate distribution should be $115-$126, which is $10.49-$11.49ish. I added back to my position first thing this morning.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-279491184472539552022-07-31T09:02:11.533-05:002022-07-31T09:02:11.533-05:00Thanks for the comments and the write-up. Came ac...Thanks for the comments and the write-up. Came across this blog and was happy to see someone else was looking at LMP. Have enjoyed reading some of the other posts as well. I'm sorry to hear about COVID and hope you feel better!jakclallyhttps://www.blogger.com/profile/17221562776635618768noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-51864181001774339642022-07-30T11:27:01.041-05:002022-07-30T11:27:01.041-05:00Thanks for the thoughtful comments, I have a bit o...Thanks for the thoughtful comments, I have a bit of post-covid brain so I haven't spent time to fully process your thoughts. But I agree that something is fishy here, but Tawfik keeps putting out these financial updates/statements on how cheap it is. I did cut my position back a bit, but continuing to hold. I'll probably come back with better thoughts at a later time.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-51643364352342007012022-07-29T16:52:06.027-05:002022-07-29T16:52:06.027-05:00Sorry, I feel like the above was poorly written. ...Sorry, I feel like the above was poorly written. Long story short, I don't think that these dealerships generate anywhere near $45 million in EBITDA on a normalized basis. <br /><br />Two of the acquisitions were essentially asset sales - (Beckley Buick / GMC / Chevy / Kia) and Bachman. The backup for this is in the "Net Assets Acquired" section of the 3Q '21 10-Q. You could argue that the two deals were negotiated and sold on a TTM basis that included an abysmal 2Q 2020. I still do not think an owner would sell these dealerships for no "blue sky value" if they were generating cash in a normal environment. <br /><br />The Fuccillo dealerships are quality assets that generate real earnings based on a conversation with another Kia dealer in FL. He believes they were making "$1M a month" in 2021, but take that with a grain of salt. If it's true, that's $12 million of earnings. <br /><br />That leaves Beckley Subaru and the CDJR dealerships, neither of which I believe are generating much cash. <br /><br />I want to believe in that $45 million EBITDA number, but a few things just don't make sense. <br />The 10-Q numbers. <br />The $38 million of Goodwill and Franchise rights on the BS that somehow bought $45 million of earnings. <br />The greater than 2x P/B multiple that you would have to put on this company to get a return that matches the risk. Best in class ABG trades at 1.5xjakclallyhttps://www.blogger.com/profile/17221562776635618768noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-26928642588161052392022-07-27T17:26:22.561-05:002022-07-27T17:26:22.561-05:00Has anyone else looked at the Q3 '21 10-Q and ...Has anyone else looked at the Q3 '21 10-Q and not been able to make heads or tails of the numbers representing the "unaudited pro forma summary in the three and nine month periods ended September 30, 2021 and 2020, respectively, presents consolidated information as if the acquisition had occurred on January 1, 2020"? https://www.bamsec.com/filing/121390021060055?cik=1731727<br /><br />See page 19 on the Fuccillo Acquisition. If I were Tawfik, I'd annualize Q3 '21 as well if that quarter alone were better than the full nine months in 2021. Keep in mind that dealers were beyond the COVID slump by the beginning of 2021. They were riding a large tailwind rather than headwind. What happened in Q1-Q2? All of the dealerships except Fucillo lost money on a pro forma basis for the 9 months ended 9/30/21. <br /><br />A quick sanity check is that most of the high quality public dealership trade at 1.25x -1.5x book. Exception is KMX which is a different model (used). Realize there is plenty of nuance that could distort the multiple related to owned real estate, acquisition model, partial ownership, etc. However, a materially higher share price - which I think you need given all the well outlined risks in your write-up - would mean a P/B of ~3x. 3x would be a major premium for a broken, subscale, geographically desperate dealership group. jakclallynoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-74528412181198964512022-07-25T11:43:14.246-05:002022-07-25T11:43:14.246-05:00*CFO was terminated, not resigned.*CFO was terminated, not resigned.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-19248484773340182542022-07-25T11:41:18.660-05:002022-07-25T11:41:18.660-05:00I haven't spoken with him. But it does make m...I haven't spoken with him. But it does make me nervous, another ick factor is the CFO just resigned and Tawfik is now also the interim CFO along with Chairman/CEO, with what appears to be a very weak board of directors, no strong shareholder, etc.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-8134059605764067552022-07-18T00:31:55.668-05:002022-07-18T00:31:55.668-05:00I initially read that sentence as 104M in aggregat...I initially read that sentence as 104M in aggregate between dealerships and land, had to go back to do the math.<br /><br />"The following are preliminary estimates of our overall dealership portfolio performance for the quarter ending June 30, 2022:<br /><br />Revenue of approximately $164 million, a 10% increase compared to the first quarter of this year (an estimated $149 million)."<br /><br />164M rev. Q1 *4 qtrs/yr * .16 multiple of revenue = 104.96 in value attributed to the dealership franchises excluding real estate. Not that you didn't already figure this out, but maybe it helps another reader. <br /><br />Start with that 104.96, slap on the 36M of cash, back out the 78M of debt, add on 50M for the real estate, and you have a purported NAV of ~112M vs a market cap of ~60M. <br /><br />Theoretically, these dealerships are cash flow positive in aggregate while awaiting sale, so you still have significant upside at current prices, but man these managers are trying their best to make me avoid going within 100 miles of this with the late filings and restatements, not to mention their sales of shares... Sometimes the "ick factor" is how you make money, but it is never easy to pinch my nose.<br /><br />Did anyone here get to speak with Mr. Tawfik? Do we think he's an honest man?<br /><br /><br />Alex Taussignoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-20095605848892363862022-07-16T08:59:52.090-05:002022-07-16T08:59:52.090-05:00https://seekingalpha.com/pr/18868192-lmp-automotiv...https://seekingalpha.com/pr/18868192-lmp-automotive-holdings-inc-provides-financial-update-and-signs-15_8-million-all-cash?source=content_type%3Aall%7Cfirst_level_url%3Aportfolio%7Csection%3Aportfolio_content_unit%7Csection_asset%3ApressReleases%7Cline%3A1<br /><br />Another financial update including selling one of their dealerships.<br /><br />"We believe that our remaining real estate portfolio, which was appraised at approximately $50 million, plus our dealerships, including the Chrysler Jeep Dodge Ram dealership in White Plains, New York that we have contracted to sell, can be worth approximately $104 million based on a modest 0.16 multiple of quarterly annualized revenue."<br /><br />It is worded a little strangely but I think they mean that the dealerships separate from the real estate is worth $104MM. If that's right, this really could be worth significantly more than it is trading. Just hard to have confidence in it. I did sell a little a ~week ago into little run up it had, but still have a position.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-20783026232686790812022-05-19T20:47:47.398-05:002022-05-19T20:47:47.398-05:00Eh, 3 months isn't that long if they were star...Eh, 3 months isn't that long if they were starting from scratch on the strategic process. I'm generally in the camp that things take longer in the real world than investors expect.<br /><br />The news that they have to restate earnings is more of a red flag to me than the delayed filings. I don't trust this management team, but they do keep reiterating how well the business is performing, so I'll continue to hold.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-39778895091649708932022-05-19T20:10:50.364-05:002022-05-19T20:10:50.364-05:00What do you think of the delayed filings? I'm...What do you think of the delayed filings? I'm surprised we haven't seen a strategic announcement. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-41381448637045307802022-05-06T16:36:51.209-05:002022-05-06T16:36:51.209-05:00Good point, maybe they have to do it piecemeal. B...Good point, maybe they have to do it piecemeal. But there have to be a lot of buyers out there? I keep thinking to myself that dealerships trade all the time, maybe not to dis-similar to a warehouse or apartment building.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-71047679363263241782022-05-06T15:41:01.562-05:002022-05-06T15:41:01.562-05:00Their model of buying only 70% of each operating d...Their model of buying only 70% of each operating dealership JV while leaving original owners in operational control (+ buying 100% of the real estate), might be hard to re-sell without a discount. One upshot of the 10b5 sales is a take-under doesn't look like the current intention. If I recall part of the stated logic of the Cambria dealerships take-under in the UK recently was so they could experiment with leasing models.<br /><br />LMP has an "interview" posted on youtube when pursuing the leasing model ("LMP Automotive: Disrupting the Multi-Billion-Dollar Auto Industry 2,633 viewsOct 26, 2020").Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-35478911325299273752022-05-02T09:28:29.427-05:002022-05-02T09:28:29.427-05:00Maybe WHG buys them?Maybe WHG buys them?MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-48202778584617879902022-05-02T09:28:14.497-05:002022-05-02T09:28:14.497-05:00I liked this idea, but then heard management on th...I liked this idea, but then heard management on the call mention they were looking to acquire others versus being acquired. Didn't realize WHG was the Wedgewood that lends their name to the Teton funds, which I saw was also pursuing strategic alternatives, but that one is extremely illiquid.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-60341150017069105582022-04-15T12:17:21.714-05:002022-04-15T12:17:21.714-05:00https://seekingalpha.com/pr/18751711-lmp-automotiv...https://seekingalpha.com/pr/18751711-lmp-automotive-holdings-inc-provides-corporate-update-and-announces-will-delay-2021-financial<br /><br />LMPX has $30MM of cash as of 3/31 and $85MM of debt, so an EV somewhere around ~$110MM. Seems very cheap despite all the red flags.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-80687892494512179762022-04-14T08:28:36.624-05:002022-04-14T08:28:36.624-05:00THANK YOUTHANK YOUAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-85914382618259255242022-04-13T13:22:04.729-05:002022-04-13T13:22:04.729-05:00thank youthank youAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-5957850130273524482022-04-05T21:16:00.795-05:002022-04-05T21:16:00.795-05:00I didn't, not directly, I'd bucket it in t...I didn't, not directly, I'd bucket it in the back of the envelope fudge factor valuation.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-90093141088035484112022-04-05T18:25:39.578-05:002022-04-05T18:25:39.578-05:00Did you include the proceeds from the sale of the ...Did you include the proceeds from the sale of the plane? Apparently sale was concluded today for $6.7 mn. Anonymoushttps://www.blogger.com/profile/18071616905818294984noreply@blogger.com