Aston Martin (AML): Keep Buying The Car Not The Shares

On September 23, days before shares of Aston Martin hit the stock market I came up with the sarcastic title “A £5bn IPO: £4bn Overpriced.” For some reason even though there was a subtle haircut on the float price – clearly one or two people in the City read the article, The Charge of the Light Brigade still went ahead.

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What stood out to me was the way that in the exhaustive research via Google for the article there was not one piece anywhere questioning the valuation?

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It was either simple reporting, or the gushing James Bond’s car profile. Of course, since then there has been wailing and moaning, with apparently employees of the Great British carmaker nursing losses on the stock they were given.

Unfortunately, as we live in a world where debate and argument appears to have died with free speech, this was and is a car crash waiting to happen. It was also a situation where someone proclaiming the Emperor’s New Clothes cannot avert misfortune.

In fact, looking at the hourly chart of Aston Martin it would appear that while below the 1,450p zone, the stock could still fall to 1,200p. This is perhaps not the £4bn overprice that I suggested last month, but at least a billion or two. But then again, if you are rich enough to afford an Aston Martin, such numbers are probably rather trivial anyway.

Author: Zak Mir

Financial commentator, interviewer, technical analyst

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