The country's roads are awash with shiny new vehicles and driving this automotive spending spree is, perhaps surprisingly, mainland Europe. With demand for new cars weak on the continent, car manufacturers, faced with over supply, are showering UK consumers with cheap financing deals, as Britain's economy is healthier. The concomitant effect has been that stocks in this retail sub-sector have performed extremely well this year, and given the cyclical nature of the industry and rising consumer confidence, it appears 2014 will be a good year, too. It's not surprising then, that the sector has seen a significant re-rating. But one company, Cambria Automobiles (CAMB) has fallen under the radar - until now.
- Healthy UK new car market
- Consolidation strategy
- Strong balance sheet
- Cheap rating
- Market dependent on financing from manufacturers
- Consumer confidence risk
That's partly because Cambria's so much smaller and younger than its peers - it only floated on the Alternative Investment Market in 2010. But having just reported a bumper set of full-year results and with a clear growth strategy, an unusually strong balance sheet and superior returns on capital to top it all off, the cheaper rating has attracted attention from City analysts and the shares seem to be gearing up for acceleration.