I wasn't too keen on Geely Automobile (OTCPK:GELYY) back in December of 2013,
and the performance since then hasn't exactly made me regret that call.
A stale lineup and poor dealership channel have both contributed to an
ugly trend in unit volume, sending the shares down 30% at their worst
point since December and down 17% even after a recent rally.
If
management were simply fiddling while the business burned, I'd scratch
it off my list and pay no further attention to it. Management is
addressing many of the company's problems, though, and I'm cautiously
optimistic on what these changes could mean for the future. I realize
that forecasts of high single-digit revenue growth and low double-digit
FCF growth don't exactly echo "cautious optimism", but I think the
company's closer collaboration with Volvo, rebranding strategy,
and dealership improvements can lead to meaningful improvements. "Can"
and "could" are still the operative words here, though, and this is an
idea only really suitable for the risk-tolerant investors in the crowd.
Read more here:
Geely Automobile Back On The Right Road?
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