Cambria Automobiles: UK Auto Dealer Run by Capable Owner-Operator

Alex Bossert of Bossert Capital presented his in-depth investment thesis on Cambria Automobiles (London: CAMB) at Best Ideas 2018.

Cambria Automobiles is a UK-based auto dealership group founded by CEO Mark Lavery in 2006 to pursue a dealership roll-up strategy. Lavery owns 40% of the outstanding shares and from a starting capital base of only £11 million has built Cambria into a business with a market cap of £64 million, with operating earnings of £12 million in 2017. This impressive performance over the past eleven years has been achieved during a period that has included two recessions in the UK. Auto dealers are good businesses, and Cambria has averaged ROE in the high-teens over time. In 2017, Cambria earned ROE of 20%. Cambria shares recently traded at just 6.9x LTM earnings. This despite two temporary factors negatively affecting earnings in 2017. The construction at the Barnet dealership has had a significant impact on profitability at this dealership. Additionally, a fire that took place in October 2016 at the Jaguar and Aston Martin dealership in Welwyn significantly hurt the profitability of that site. The Barnet project was finished in July 2017 and the Welwyn site was back in operation in June 2017.

Read Alex Bossert’s write-up on Cambria.

About the instructor:

Alex started Bossert Capital in February of 2017 to invest money on behalf of a select group of long term oriented, business minded, wealthy families and individuals. He began investing his own money at 10 years old. Alex has studied and modeled his investing strategy after investors such as Warren Buffett, Charlie Munger, Benjamin Graham, Joel Greenblatt, Seth Klarman, Mohnish Pabrai and Guy Spier among others. Prior to starting Bossert Capital, Alex held analyst roles at multiple investment firms. From 2010 – 2013 he was an analyst at Milestone Capital, a value focused investment firm based in Minneapolis, Minnesota. And from 2014 – 2016, he was an analyst at Granite House Capital Management in Boston Massachusetts. In 2014, he was accepted as a member of the Value Investors Club. He is also the youngest ever admitted member of the SumZero buyside network and was one of 14 buyside analysts in the nation to be named to the 2012 SumZero Buyside Analyst Honors which was published in the Wall Street Journal and CNBC. Over 8,000 analysts were considered. He is also featured in a chapter in the biography of investor Warren Buffett called “Of Permanent Value: The Story Of Warren Buffett.” He maintains a blog “Alex Bossert‘s Thoughts On Value Investing” with over 450 subscribers and over 250,000 site views.

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