Chris BlumasFerrari N.V.RACEWAITOct 16, 2024

The high end is still spending on luxury goods. This stock is extremely volatile and very niche. Wealthy shoppers don't really slow down spending in a recession, and their income tends to be more consistent. But if the stock market rolls over, this name could see a couple of weak quarters. Not for her portfolios, but analysts still see upside.

Instead, she has exposure to more defensive consumer staples such as DOL and AMZN for her main positioning.

He never owns car companies, because their capex is well beyond their free cash flow. But Ferrari is best in class, because collectors will pay serious money for their custom cars. Ferrari have pricing power, not Mercedes, BMW, etc. RACE boasts 18% dividend growth. Start with a partial buy.

They report Tuesday. All luxury stocks have been hammered due to weakness in China, but it won't effect RACE, because it's more of an American stock.

The amazing thing is that people who buy one don't stop at just one. Resale values can be much higher than what they paid. Demand is insane, slower in China. Growth phase going forward is full-electric, planning to launch in Q4 2025.

One of the world's best companies with a huge backlog, lots of predictability, and slowly adding more cars over the long term. Deserves its premium valuation.

Still likes it, and would buy at this price, though of course he prefers pullbacks on some temporary issue. Buying for new clients. Sees it adding new cars and new lines each year. Adding customization and special incentives, growing margins. Valuation is not cheap, but if it were cheap it would be called Ford and you wouldn't want to own it.

Not a lot of exposure to China, so not seeing the same pullback as in other luxury names.

Fantastic stock since Day 1. Short term, looks a little soft. Stories about high-end real estate not moving and high-end consumer getting tapped out (but he thinks the wealthy always have money). Looking a bit top heavy. Would expect around $390 as a spot to park; if that doesn't hold will probably see $365 level. Ultimate pounding would be around $310, a 25% haircut.

RSI compared to S&P above the line and leading. You want names like this long term.

High quality company that consistently performs. High multiple on stock, but quality products. Doesn't own shares in company, but thinks highly of the company - follows closely. High demand for products with top price tag. High net worth individuals continue to buy products. Very high margins produce excellent cash flows. 

Still believes in this. This is no car company, but a work of art. Are great marketers. The next catalyst will be them launching their EV car in the coming year.

The only car company he owns, because "it's not a car company, it's a luxury goods company". Two-year waiting list. 

Over 33% of owners buy more than one. Can't get a new one till 2028. Hybrid model doing well. Plans for EV. Price rises every year. Customization is pure profit for the company. Not cheap. He plans to hold for a long time. More than a car company, it's a brand.

Bought it last week. A leading luxry brand with profits like a software company. Limited production fuels their pricing power and competitive advantage. Trades at 4x profitable of a carmaker and 2x the consumer discretionary sector.

Good long term investment.
Continues to own shares.
Happy with company fundamentals.
Expecting further growth going forward. 
Demand for product very strong.
Pricing power very strong - able to keep up with inflation. 
Expecting double digit earnings growth. 
Electric vehicle on the way. 

RACE operates in a niche market, has artificial scarcity in sales volume, and has excellent brand loyalty. Its 5-year sales and earnings CAGR of 9.3% and 12.1%, respectively, are impressive, and the company has a good buyback program in place. Forward sales and earnings growth are expected to be strong and it has strong profit margins. Its valuation has become somewhat extended, with a forward sales multiple of 8.9X and a forward P/E of 45.1X. Free cash flows are good, and it has a nice cash balance of $1.5B. Its balance sheet is somewhat weak, with a small equity position and a high debt balance. Overall it's a fundamentally strong name, however, there is room for its valuation to contract and we would not be surprised by a pullback in price over the intermediate term. Generally, your investment is backed up by solid numbers, not just hype.

Nothing wrong with the business. Number of cars sold and pricing increases each year. Launching an SUV and EVs. Stock's not cheap and it never will be. Quality persists. Adding for new clients.