Adesa, Inc. (KAR)

[Phaedrus]

Woof, Fish, anybody, want to have a look at this and tell me what you think?

Adesa, Inc.

Charts

Used car market is very strong and has good prospects. Adesa is basically the go-to company for the b2b end of the used car market, and is the largest publicly-traded auto auction company in the country.

P/E is almost 18 which is a little high for a buy-and-hold but the income to sales ratio has been improving solidly for a while now, with income growth consistently over sales growth, which is to me a sign of solid management.

Whatcha think?

Edited to point out that this is a buy-and-hold kind of thing for me, 12-24 months minimum, not 60 days to riches.

Phaedrus

 

[Dawoofdaddy]

Read the company profile and it seems like an interesting niche business.

However, I would have to know what these intangibles consist of that they are claiming on the balance sheet prior to considering buying this stock.

Its nearly 30% of their total assets.

If you buy it, I hope it works well for you.

 

[BASEHEAD]

I think you could buy it cheaper in a month or so.

Riding the top of the band for a while.Looks like its on its way down a bit.

 

[Phaedrus]

Thanks for the feedback guys. Woof, where do you see a 30% intangibles ratio? Their balance sheet shows $ 42 million out of $ 1.9+ billion in total assets. They have a huge chunk of "goodwill" at over $500 million, which presumably is where the 30% figure is coming from, but that's not quite as vague as "intangible" (although not as nice as "current spot value of gold in our vault" )


Phaedrus

 

[Dawoofdaddy]

From their balance sheet 50% of non current and 30% of total assets

<table id="financial-statements" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td height="20">Total Current Assets</td> <td align="right">724.10</td> <td align="right">730.80</td> <td align="right">490.87</td> </tr> <tr height="1"> <td colspan="4" class="tb03">

</td> </tr> <tr> <td height="20"> Gross Fixed Assets (Plant, Prop. & Equip.)</td> <td align="right">751.10</td> <td align="right">705.70</td> <td align="right">672.84</td> </tr> <tr height="1"> <td colspan="4" class="tb03">

</td> </tr> <tr> <td height="20"> Accumulated Depreciation & Depletion</td> <td align="right">155.20</td> <td align="right">129.10</td> <td align="right">102.92</td> </tr> <tr height="1"> <td colspan="4" class="tb03">

</td> </tr> <tr> <td height="20"> Net Fixed Assets</td> <td align="right">595.90</td> <td align="right">576.60</td> <td align="right">569.92</td> </tr> <tr height="1"> <td colspan="4" class="tb03">

</td> </tr> <tr> <td height="20"> Intangibles</td> <td align="right">574.60</td> <td align="right">546.10</td> <td align="right">544.32</td> </tr> <tr height="1"> <td colspan="4" class="tb03">

</td> </tr> <tr> <td height="20"> Cost in Excess</td> <td align="right">0.00</td> <td align="right">0.00</td> <td align="right">0.00</td> </tr> <tr height="1"> <td colspan="4" class="tb03">

</td> </tr> <tr> <td height="20"> Non-Current Deferred Income Taxes</td> <td align="right">0.00</td> <td align="right">0.00</td> <td align="right">0.00</td> </tr> <tr height="1"> <td colspan="4" class="tb03">

</td> </tr> <tr> <td height="20"> Other Non-Current Assets</td> <td align="right">50.90</td> <td align="right">60.00</td> <td align="right">50.25</td> </tr> <tr height="1"> <td colspan="4" class="tb03">

</td> </tr> <tr> <td height="20"> Total Non Current Assets</td> <td align="right">1,221.40</td> <td align="right">1,182.70</td> <td align="right">
1,164.48


</td></tr></tbody></table>

 

[Phaedrus]

Yeah, that's definitely the intangibles+goodwill. Weird that we got two different sets there. Hey, maybe I should short it then report the "discrepancy" to the SECX >


Phaedrus

 

[wiesman02]

if you take a look at the 2 year chart for KAR, it looks like it has formed a double bottom. Usually, double bottoms result in an upward trend. Unfortunately, this stock is showing decreased volume at the high of 26.8 in Nov '06 than in April '06. That tells me that this stock is in a bearish pattern. Only thing that will change my mind about this stock is if it penetrates resistance at 27. Other than that, this stock is not a buy yet.

 

[Phaedrus]

Well, it smacked through 27 yesterday on very high volume, actually hitting a 52-week high. Still on the watch list -- shame I didn't go for some quick bucks on it when I first noticed.


Phaedrus