Guru Michael Dell (Trades, Portfolio)Â reduced his position in Asbury Automotive Group (ABG, Financial) on May 3.
Asbury Automotive Group is headquartered in Duluth, Georgia, and is one of the largest automotive retailers in the U.S. The company has approximately 82 retail auto stores, encompassing more than 100 franchises for the sale and servicing of 35 different brands of American, European and Asian automobile makes.
Asbury Automotive Group has a market cap of $1.24 billion, a P/E ratio of 8.82, an enterprise value of $3 billion and a P/B ratio of 5.75.
Below is a Peter Lynch Chart for Asbury Automotive Group.
According to GuruFocus Asbury Automotive Group has a financial strength rating of 6/10 with an equity to asset ratio of 0.10, ranking it lower than 95% of the 1,224 companies in the Global Auto & Truck Dealerships industry.
Dell is the founder, CEO and chairman of the board of directors for Dell computers, the company he originally founded in 1984 with $1,000 of capital. Dell has a market cap of $24.38 billion with over 100,000 employees.
In 1998, MSD Capital was founded as an investment firm to manage the capital of Dell and his family. The firm primarily focuses on publicly traded securities and traditional private equity activities as well as real estate.
Dell may have decided to reduce his position in Asbury because the company has been issuing new debt. Over the past three years, Asbury has issued $756.8 million of new debt. This is a severe warning sign because debt increases the variance of the company share price falling in the future.
This could potentially have an impact on future revenue and gross profit. The company also has significant reductions in its free cash flow growth, -61.90% and book value -29.60% during the previous 12 months.
Cheers to your investment success.
