Monday, June 15, 2009

Auto Legend Penske Sees Value In Saturn

The news has been out for about a week now on Roger Penske buying Saturn Motors which has been a division of General Motors for the last 19 years. Who is Roger Penske? Well to most he is the team owner of Penske Racing, the most dominant racing team in American Open Wheel racing. However, if one takes a closer look at Mr. Penske he is one shrewd business man. I would even go so far to call Roger a Value Investor. To many that read this blog will say how does Roger Penske buying Saturn pertain to picking stocks. Remember folks investing whether it be buying shares in a company or the whole company is still investing. Value Investing is just digging a little deeper for the true deals. Why do I call him a value investor? This is due to him stepping in and buying Saturn when things look pretty dim in the auto industry as well as the overall economy.

Now I do not know whether Mr. Penske and Warren Buffet know each other, but it seems as though The Captain has taken some cue's from the Oracle of Omaha. Meaning that Penske is sticking to a business he knows very well, plus buying an established brand on the cheap. As most true value investors know that this is when you generally find some of the most attractive deals. Penske has made a career in the auto industry for nearly 50 years. I think he sees an established brand that has a loyal customer base that needs some tweaking. Its much easier to buy a existing auto manufacturer than start from scratch.

Here is what some others are saying:

Penske has a unique plan put into place where the production function of the automobiles will be outsourced Jeremy Rooney at The Examiner

Saturn dealers can collectively breathe a sigh of relief. Having Roger Penske as the boss will mean good things for Saturn Keith Crain at Automotive News

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