Ferrari NV (RACE) Update: Floor It by Greenwood Investors
We’ve posted a new note in The Grove updating our research on Ferrari. Given disclosures made by the company over the last month, we’ve upgraded our near-term earnings profile of Ferrari. We now expect EBIT to double in the next 12 months, and surpass €1 billion by 2017, two years earlier than we had initially expected. By next year, Ferrari will have best-in-class EBIT margins, besting out LVMH, Prada, Richemont and Burberry. We’ve also included more information on the jet/helicopter interiors market, which Ferrari will be entering by 2017. We believe the company will be announcing a partnership with Finmeccanica’s AgustaWestland helicopter unit, which also happens to be our second largest position after Fiat-Ferrari. Shares are now trading below the IPO price, and represent a compelling recession-proof opportunity in the next 12 months.
We’ll be posting a publicly-available note for Fiat-Chrysler in the coming weeks. Backing out the value of the RACE shares we’ll receive on 1/4/16, FCA is trading at a 4% discount to distressed and beleaguered Volkswagen, even excluding the massive charges the company will be taking. We’ve also upgraded our earnings estimates for FCA in 2016 given stronger-than-expected results coming out of Latin America. All other regions exactly matched our estimates, which were significantly above an unintelligent consensus.
Gates Capital's ECF Value II fund was up 9.4% for the first quarter, compared to the HFRI Event-Driven Index's 8.2% gain, the Russell 2000's Value Total Return Index's 21.2% gain, and the S&P 500's 6.2% return. Q1 2021 hedge fund letters, conferences and more Gates Capital Management is an event-driven value . . . SORRY! Read More
Ferrari’s Updated EBIT Margin Progression