STLA - Stellantis

Great company......portuguese genius as top manager ...

 

Chrysler was on the verge of bankruptcy for decades. Not all that long ago, either. These days, Stellantis seems to be the best run of the big 3 American car companies.

I'm not confident any of the big 3 will survive the next decade but Stellantis currently looks to have the best chance and a real shot.

 

https://www.theverge.com/2023/12/7/...-ev-battery-swap-deal-fiat-500e-spain#content



Stellantis struck a deal with California-based EV battery swapping company Ample to power a fleet of shared Fiat 500e vehicles in Spain. But the company says the deal could eventually expand to include personally owned EVs in Europe and the US as well.

By becoming one of the first Western automakers to embrace battery swapping technology, Stellantis is betting that EV charging infrastructure in Europe and the US will remain a barrier to adoption in the near future, necessitating other solutions. Battery swapping could theoretically help EV owners power up and get moving without having to wait for long stretches at a charging station.

 

Battery swapping something new I heard about.

 

I'm not big on battery swapping, for a variety of reasons, but it does solve a lot of problems.

A pack that has been charged at 1/2C is going to lost significantly longer than that same pack charged at 4C.

Also, ultra fast charging stations are nearly impossible with nearly any grid connection. Imagine a 4 position Tesla charging station with a peak charge rate of 350KW. If there are any losses at all, and there are, that is 1.5MW for 4 positions. Imagine calling a power company and asking for a 1.5MW grid connection? lol!

When you get down to 20KW, you can charge from a home service. Of course, you remain constrained on the total number of packs you can charge by the ingress power. This is where solar charging can make a lot of sense.

I'm impressed with Stellantis and I'm certainly cheering for them.

 

I told you ...a local genious!

 

A long term buy order would likely make that happen but you might be forced to wait a few weeks. Perhaps that is unacceptable for a trader but that's nothing for an investor.

 

Can someone help me understand Stellantis decision to adopt the NACS plug but not join the SuperCharger network?

Are they building out their own network?

 

I'm not sure that STLA will ever reach $21 again, it's certainly worth a hell of a lot more than that.

I did actually sell my STLA position though recently to buy something that I deem to be even more undervalued.

 

"The best investments are not in stocks that everyone praises, but in stocks that everyone underappreciates. That in one sentence sums up our investment in Stellantis. This company is itself very young, but its individual components have very long and interesting histories. I will just briefly describe how the company came to be. In 2009, the American carmaker Chrysler went through bankruptcy and the Italian automaker Fiat became one of the main shareholders – at that time with a 20% stake. Under the leadership of its CEO Sergio Marchionne, Fiat gradually increased its holding until in 2014 it came to own 100% of the shares. The newly formed company, called Fiat Chrysler, began trading on the stock exchange. It was clearly underappreciated by the market (including us) even then, but the stock has done very well since – and especially when you add in the performance of Ferrari, which was spun off from Fiat Chrysler in 2016. Two years later, Sergio Marchionne died and John Elkann, the grandson of Gianni Agnelli (Fiat) and CEO of Exor, the main shareholder of Fiat Chrysler, became the prime mover of events. In 2021, John Elkann initiated the merger of Fiat Chrysler with the French carmaker Peugeot, thereby creating Stellantis, the fourth-largest car company in the world. Ownership control is held by the Agnelli (via Exor) and Peugeot families. The company’s CEO is the highly respected automotive veteran Carlos Tavares.


We think we are once again in a situation where the market is deeply undervaluing the Stellantis stock. Consider for yourself: Stellantis is a solid business. It has some of the highest, if not the highest, margins in the industry, and that is before savings from the integration of Peugeot and Fiat Chrysler are fully realised. Management plans to move from the current level of EUR 180 billion in sales to EUR 300 billion by 2030. So, it is a decently profitable and growing business. We can also find net cash (cash minus debt) of EUR 23 billion on its balance sheet. The individual Stellantis brands (Alfa Romeo, Chrysler, Citroen, Dodge, Fiat, Jeep, Maserati, Ram, Opel, Lancia, Vauxhall, Peugeot and others) cover different market segments – from the very low end to luxury – as well as different regions. Peugeot is strong, for example, in France, Germany and Britain, but also in Argentina. Fiat, for instance, in Italy, but also in Brazil. We consider the management to be excellent and the controlling shareholders to be very responsible. In the capital allocation story, dividends and shares buyback play big roles. That all looks good. So, what is the market telling us through the share price? The stock is trading at three times annual earnings. If you subtract net cash, which is close to half the market capitalisation, you get to 1.5 times annual earnings. That valuation is, in a word, crazy. Add to that a dividend yield of 8.5%, plus share buybacks, and the stock would still be cheap even at twice the price. All in all, after 15 years of watching developments, we have run out of excuses not to buy the stock. It would be a shame not to take advantage of this opportunity."

- Vltava fund Q2 2023 letter

 

I wish I had seen this excellent post 6 months ago. Unfortunately, I was traveling Asia at the time and missed quite a few post. Thank you for this, ValueNZ.

Gather around. I have a story.

Not all that long ago, I worked at the worst managed organization of my career. Executives were savages. They told their largest client, also the owner with the largest stake, "Go F yourselves", in a meeting. It was brutal. They only had a handful of clients and they treated each one like dirt.

Clients would ask for simple things and comically out-priced quotes would be provided. "We don't want this business."

Clients left. Partners sold off their stake. When it came down to two clients left, the company was outsourced and shut down by it's owners. I left a few years before this happened.

The point is, during my few years of working there, they would point to record profit and the best business model in the industry, along with a sure-fire strategy that would bring global domination. They always had an amazing PowerPoint deck that proved their superiority. We received record bonuses each year, despite broad based scoldings and arbitrary reprimands at every general meeting.

One day, they just quietly went out of business a few months after an all staff meeting in which they presented their victory over the entire sector and record bonuses, all around.

That is the second time I've seen that, although it was far more extreme than the first production of that same script. It ended badly, both times.

I view that company as a terrible company, although I had very high earnings for the duration of my stay. Perhaps I have no business looking down on them, but I do. In my view, they could both still be in business if they did a reasonably decent job and worked with their clients in a civil manner.

These days, when someone tells me they are making record profit and earning record bonuses thanks to the best management in the industry, I smile and say, "That's great." These characteristics are hardly an indicator of long term success, to say the least. I'm looking at you, Stellantis.

 

Carlos Tavares out. Now what?

I would think Stellantis is going to lose a lot of brands to the Chinese, best case. What is the likely case? Can they be saved?

At the risk of revealing my nihilism, I haven't seen a really decent North American CEO since Elon Musk.

How amazing would it be if Stellantis could lure Lisa Su out of AMD? I love AMD so I hope that doesn't happen but I estimate she could manage Stellantis to dominance.

 

"...iconic and award-winning brands such as Jeep®, Chrysler, Dodge, Ram, Alfa Romeo and Fiat..."

Ughh, please God let Lisa stay at AMD and let the crap above rot in vehicle Hell.