It's fair to say that this is a limited sector, both in terms of choice and performance. Since listing in October, Aston Martin's (AML) share price has been stuck in reverse. Having floated at 1,900p on the London Stock Exchange last October, the car manufacturer then missed analysts' expectations on the release of maiden third-quarter numbers in November. The company has, to some extent, overrelied on the Chinese consumer – it's thought the new Vantage model has proved particularly popular there – although the relative price inelasticity enjoyed by luxury vehicles should help insulate it from softening demand in 2019.
The shares have also been shorted by the likes of George Soros, and the company remains heavily indebted. Fans of Aston Martin will look back fondly on its great heritage – iconic vehicles such as the DB5 have ferried about secret agents and emirs for decades. But no study of the company’s history is complete without taking in its numerous bankruptcies and its inability to produce consistent profit growth. With the company unlikely to turn things around in the near term and become a cash-generating, debt-light machine, there’s no imminent prospect of us upgrading our sell rating.
There could be healthier prospects at automotive fluid systems manufacturer TI Fluid Systems (TIFS), which came to market in October 2017. An underwhelming third-quarter trading update allowed it to fall victim to the widespread equity sell-off late last year, while investors have been skittish about the substantial stake held by Bain Capital. And, as car demand softens in key markets such as the UK and China, the rest of the automobile supply chain has also taken a hit. But a series of breakthrough electric vehicle contract wins in the latter half of the year could signal better things to come.
| Name | Price (p) | Market cap (£m) | 12-month change (%) | Trailing PE | Forward PE | Dividend Yield (%) | Last IC View |
| Aston Martin Lagonda Global | 1,260 | 2,872.83 | 52.1 | 25.3 | 0 | Sell, 1,446p, 19 Nov 2018 | |
| TI Fluid Systems | 165 | 857.84 | -34.78 | 6.5 | 5.5 | 2.35 | n/a |
