The luxury car industry is one of the most badly hit by the coronavirus pandemic, and despite the £536 million bailout early last year, Aston Martin initially struggled with the pandemic-induced financial crisis. However, the stock weathered the crisis and came out stronger. So, we created this page as a guide for prospective investors interested in buying Aston Martin stock.
Table of Contents
Learn How to Buy Aston Martin Stocks in 3 Easy Steps
Find a broker
Your broker is the link between you and the shares you want to own. The important thing is to choose a broker that suits your trading style and objectives.
Analyze the Aston Martin stock price chart
Charts allow you to view the historical price trend of a stock. It clarifies the "behavior" of the stock, possibly indicating the best time to take a position or exit the market. So, it is important to analyze the Aston Martin stock charts before taking a position in it.
If satisfied with your technical analysis, you can start taking positions in the stock. Depending on your preferred entry strategy, you can buy at market price or set a price limit. Never trade with more than 2% of your portfolio on a single stock.
Aston Martin company overview
Aston Martin Lagonda Limited designs and manufactures automobiles. The Company offers sports, racing, roadsters, and commuter cars. The British auto company was founded in 1913 by Lionel Martin and Robert Bamford. The company presently has 10 production bases scattered around the UK.
Aston Martin became associated with class and glamour during the 1950s and 1960s, and it was used in a 1964 James Bond movie, Goldfinger. Aston Martin sports cars are regarded as a British cultural icon. Since 1982, the company has held the Royal Warrant as a purveyor of motorcars to the Prince of Wales.
Aston Martin got listed on the London Stock Exchange on 3 October 2018 and is a constituent of the FTSE 250 Index. The company has a market capitalization of $2.2bn. Despite its status as a symbol of luxury, wealth, and class, Aston Martin has gone bankrupt seven times in its history.
Aston Martin business model and revenue streams
Aston Martin makes its revenue through four segments: sales of vehicles, sales of parts, servicing of vehicles, and branding and motorsport segments. With its core business (vehicle sales) lagging, Aston Martin embarked on a transformation program called the 'Second Century Plan,' which focused on three key areas: business stabilization, core strengthening, and expansion of the product portfolio. This plan enabled Aston Martin to diversify into new vehicle categories and increase overall production volume to boost earnings without compromising the company’s reputation for exclusivity, style, and engineering.
The company’s highest revenue earner is no doubt its vehicle sales. This segment accounts for more than 50% of the company’s revenue. This is followed by its branding and motorsport segment due to its reputation of style and exclusivity. Aston Martin released a high-quality clothing line with Hackett London. It also has a partnership with other luxury manufacturers such as TAG Heuer to produce watches. Aston Martin has also had a long involvement in motorsport and Formula 1, particularly when it has racing teams. The company's least revenue generator is the servicing segment, which accounts for about 11% of the total revenue.
The firm’s annual revenue dropped to £611.8 million from £980.5 million the year before, with Aston recording an annual operating loss of £323 million. This was the pandemic including which reduced dealer stock levels due to supply chain disruptions. To shore up revenues, Aston Martin plans to produce 6,000 vehicles this year with its fastest-selling car, the DBX model accounting for much of that output.
History of Aston Martin
Aston Martin was founded in 1913 by Lionel Martin and Robert Bamford, who joined forces as Bamford & Martin to sell cars made by Singer. Martin was a car racer who featured on specials at Aston Hill near Aston Clinton. The pair decided to make their own racing vehicles. The first racing car, named Aston Martin, was created by Martin by fitting a four-cylinder Coventry-Simplex engine to a 1908 Isotta Fraschini. In 1922, Bamford & Martin began producing cars to compete in the French Grand Prix. The car went on to set world speed and endurance records at Brooklands.
However, the pair went bankrupt in 1924, which led to the company being acquired by Lady Charnwood, who put her son, John Benson, on the board. This did not save the automaker from running into financial difficulty a year later, which forced Martin to sell the company (Bamford had already left). Later that year, Bill Renwick, Augustus Bertelli, and investors including Lady Charnwood took control of the business. They renamed it Aston Martin Motors. The company suffered yet another financial setback in 1932 and was rescued by Lance Prideaux Brune.
In 1947, Aston Martin was acquired by gear and machine tools manufacturer, David Brown Limited, for its 2.6-liter W. O. Bentley-designed engine. In 1972, David Brown paid off all the company's debts to the tune of £5 million before handing it over to Company Developments, a Birmingham-based investment bank consortium. In 1982, Aston Martin was granted a Royal Warrant of Appointment by the Prince of Wales. However, the company faced financial difficulties again, which resulted in Ford taking a shareholding in September 1987
Ford placed Aston Martin in its Premier Automotive Group, invested in manufacturing infrastructure, and ramped up production. In 1994, Ford opened a new factory to manufacture the DB7.
In 1995, Aston Martin produced a record 700 cars. In 1998, the 2,000th DB7 was built, and in 2002, the 6,000th. This exceeded the production of all of the previous DB series models. The DB7 range was revamped by the addition of more powerful V12 Vantage models in 1999 and 2001,
In 2006, following an internal audit, Ford decided to divest its position in the company, which was purchased by a consortium led by Prodrive chairman David Richards for £475 million (US$848 million) the following year. Ford, however, retained a stake in Aston Martin valued at £40 million (US$70 million)
In 2013, Aston Martin sold a 5% stake to Daimler AG in a deal that would see the German company supplying the next generation of Aston Martin cars with Mercedes-AMG engines and electrical systems.
This technical partnership was intended to support Aston Martin's launch of a new generation of models that would incorporate new technology and engines. Mercedes later increased its holding from 5% to 20%.
After reversing its trend of perennial losses, Aston Martin went public in 2018, and the following year, the company opened its new 36-hectare (90-acre) factory in St Athan to produce its first-ever SUV, the DBX.
On 31 January 2020, Canadian billionaire and investor Lawrence Stroll led a consortium of investors who paid £182 million in return for a 25% stake in the company.
Brokers that offer Aston Martin shares
There are a lot of brokers that offer shares of Aston Martin. We have compiled a list of the best brokers offering this stock in the table below.
Should I invest in Aston Martin stock?
Investing in Aston Martin is a good move. However, investors should wait a little while before purchasing the stock. The economy is yet to recover fully, and with unemployment rates still high, elastic goods like Aston Martin would be last in the consumer's list given the fact it is a luxury hood. As such, investing now would be too early as the trading volume would still be low. Investors can wait till Mid Q2 2021.
Aston Martin stock investment potential
Investing in Aston Martin implies holding the stock for the long term, given its diversification strategy and the expansion of its ecosystem to appeal to more luxury customers, as well as its plans to make 90% of its cars electric by 2030. The brand is also increasingly being used, mostly through licensing, in other products, including submarine, real estate development, and aircraft. This implies that it is actively trying to increase its revenue streams through other means.
What kinds of investors should include Aston Martin stock in their portfolios?
Aston Martin stock appeals to both short-term and long-term investors. In the short term, swing traders can ride the next upswing since the stock has been in a pullback since February. Over the long term, the diversification drive of the company shows that it has potential for growth in the future.
How much should I invest in Aston Martin?
How much you are willing to invest in Aston Martin stock depends on how much you're willing to lose. Though no trader plans to lose his capital, stock trading comes with the risk of losing your capital. To avoid losing your shirt, invest only what you can afford to lose. This amount, however, depends on your economic status, investing experience, and familiarity with the stock.
How to buy shares in Aston Martin stock?
Step 1: Choose a trading platform
Many trading platforms offer shares of Aston Martin. You can choose anyone based on your predetermined preferences.
Step 2: Open a brokerage account
You can open a brokerage account after you have decided on your choice of a trading platform. The general requirements for opening a brokerage account are an ID, bank details, and national insurance number, contact details, among other things.
Step 3: Research Aston Martin shares
Even though you have made up your mind to buy Aston Martin shares, you still have to research. This enables you to determine when to take a position in the stock, and how long to hold the stock.
Step 4: Fund your account
You can fund your brokerage account in several ways, such as local transfers, international wire transfers, credit/debit cards, or online wallets. The method you choose depends on what the broker allows and what you find convenient. Be sure to confirm with your broker about payment options from your country of residence.
Step 5: Start trading.
With your account funded, you can start buying shares in Aston Martins. Be sure to have a strategy and a plan before placing trades.
Buy Aston Martin shares using a broker
You can buy Aston Martin shares from a variety of brokers, but the process is somewhat the same. Log into your trading account, search for Aston Martin using the appropriate ticker (AML.L). Click on the stock, and its financial information would be displayed on your screen — including current price, company profile, price chart, balance sheet, among other things. If you prefer buying at market price, you can click buy and enter the number of units you want to purchase. If you prefer using a price limit, you can set your limit target and enter your preferred price range. Once the market price hits the range, your order would be executed. Once your trade has been registered, you would see the appropriate amount of units you purchase displayed on your screen dashboard.
Buy Aston Martin shares with a direct stock purchase plan (DSPP)
Unfortunately, shares of Aston Martin cannot be purchased through a direct stock purchase plan.
Frequently Asked Questions
As the economy reopens and jobs begin to pop up, people would have more disposable income. Stocks like Aston Martin would benefit from the growing consumer purchasing power that comes with a growing economy.
It’s difficult to say, given the company’s history of bankruptcies. However, the company is diversifying its revenue sources.
Yes, you can make money trading Aston Martin stock
There is no best platform. Your choice of platform depends on your investing and trading preferences.
Aston Martin is traded between 8 am and 4 pm London Time when the London Stock exchange is open.
London Stock Exchange