I am totally perplexed by Lookers PLC Fundamentals v current share price (as of 3 apr 2020)

Float 390mil shares x £0.154/share = Market Cap £60million

Consider 2018 and 2019

After tax 2018 = £43.5mil or 43.5/390 = £0.11 EPS, hence P/E= 0.154/0.11 = 1.4

Balance 2018 = Net Assets £399mil hence P/BV = 60/399= 0.15 ie safety margin 85%

Of this £231mil intangible assets which I subtract to give £399-231= £168mil

Lookers owns £350 mil of property of which £210mil freehold and rest leasehold - hence liquid assets

After Tax 1st Half 2019

£25mil and expect at least £10mil 2nd half = 35/390 = £0.09 EPS, hence P/E= 0.154/0.09 = 1.7

Balance 2019 = Net Assets £399mil hence P/BV = 60/399= 0.15 ie safety margin 85%

Of this £231mil intangible assets which I subtract to give £399-231= £168mil

Lookers owns £350 mil of property of which £210mil freehold and rest leasehold - hence liquid assets

Worst Base case valuation

If Book value £60mil, and net assets £168mil then share price should be around 0.154*(168/60) =£0.43

Pre crash brokers recommended between £0.45/0.60 share price based on 2019 lower trading volumes.

Even if 2020 Profit After tax is just £20 million / this would give P/E of 60/20 =3 (well below automotive market average)

and EPS of 20/390 = £0.051

Lookers is expected to pay 1.48p/share interim dividend in 2020 = just under 10% -even if no final dividend

Strong support level at 15.4p.

THIS STOCK SHOULD BE SHOOTING UP BEING BOUGHT BY VALUE INVESTORS - BUT IT ISNT!

ITS ALSO A POTENTIAL TAKEOVER TARGET WITH BREAK-UP VALUE OF £168MIL V TODAYS MARKET PRICE OF £60MIL.

My analysis for this is as follows:

1. Little known and unpopular stock

2. Low daily traded share volume (average 1mil daily out of 390mil float) - leads to wide quoted bid/offer spread

3. Company lacks investor sex-appeal -being just a boring mundane Buffettian low tech company which sells new and used cars and car parts.

SOS - can some Stockopedia guru pls urgently vivisect this company´s fundamentals to come up with an accurate fundamental analysis and risk profile - in case I have missed something before this stock skyrockets.

My sources of information are :

https://www.londonstockexchange.com/

http://www.lookersplc.com/investors/results-centre/

https://www.hl.co.uk/shares/shares-search-results/l/lookers-plc-ordinary-5p-shares/financial-statements-and-reports

POSTED ON STOCKOPEDIA AT 22.00 GMT ON 3 APR 2020

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