Monday, August 18, 2014

Seeking Alpha: Geely Automobile Back On The Right Road?

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.

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Geely Automobile Back On The Right Road?

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