After a 96% plunge, is buying more Aston Martin shares throwing good money after bad?

Just two weeks after buying Aston Martin shares Harvey Jones found himself nursing a painful loss. Yet after recent news he’s tempted to give it a second shot.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Aston Martin

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

If Aston Martin (LSE: AML) shares were a car you’d have to be crazy to get behind the wheel. All they seem to do is crash.

The ultra-luxury car maker has gone bankrupt seven times since hitting the road in 1913, and still keeps veering off-course. After all the hype and hoo-ha of its flotation in October 2018, the shares fell on day one. And they’ve been falling ever since.

The Aston Martin share price has plummeted by 96.17% over the last five years. Over 12 months, it’s down 41.65%.

Should you invest £1,000 in The Prs Reit Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if The Prs Reit Plc made the list?

See the 6 stocks

Created with Highcharts 11.4.3Aston Martin Lagonda Global Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

On 16 September, I decided this mighty brand had to turn the corner, so I bought it. Within a fortnight I found myself down 35% after the board warned it would make 1,000 fewer cars due to supply chain disruption and weak demand in China.

This FTSE 250 stock can’t stop stalling

It was a bumpy start for CEO Adrian Hallmark, recruited from Bentley, and a bumpy start for this investor too. Still, others have had it worse.

I always knew Aston Martin was a gamble, which I funded using the scrapings of my self-invested personal pension (SIPP). I won’t be selling now. Supply chain disruptions are hardly terminal while its V12-engined Aston Martin Vanquish has earned rave reviews. With a retail price of £330,000, I hope it doesn’t depreciate as rapidly as Aston Martin shares are wont to do.

In the last week, Aston Martin shares have done a strange thing. They’ve crept up 6.8%, shrinking my paper loss to just 27.71%. Honestly, it feels like a win.

On 31 October, the board cheered investors by reporting that Q3 adjusted pre-tax losses had narrowed from £123.5m to just £10.3m year-on-year. That’s a huge difference from the anticipated loss of £92m.

Aston Martin still lost £26.7m in the quarter but that was roughly half the expected £53m loss. Revenues rose 8% to £391.6m. Now I’m wondering whether to throw more cash at this stock before it recovers further.

Reasons to be optimistic

Supply chain disruptions are being “proactively managed” while Q3 volumes rose 14% as the order book continues to expand. This should strengthen as its new range of models go on sale in all markets. It’s now on track to meet revised full-year 2024 guidance, although the key word here’s “revised”.

China remains a worry, as it does for many a luxury goods maker. I’m not sure what’s going to turn around that economy. Beijing’s run out of ideas. The Americas is a big market for Aston Martin, with 1,112 sales out of 3,639 so far in 2024, but the US economy could go either way from here.

The 11 analysts offering one-year price forecasts for Aston Martin have set a median target of 167.5p. That’s up a hefty 41.31% from here and would be great if it happened.

There are positive signs but Aston Martin remains a risky gamble, especially as it’s yet to crack the transition to electric. I may be throwing good money after bad but there are positives and I’m going to scrape together some more cash to top up my stake.

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Harvey Jones has positions in Aston Martin. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Here’s the dividend forecast for Rolls-Royce shares as Trump rocks the markets

Rolls-Royce shares have joined in the volatility over the past week. However, with the direction being largely downwards, the dividend…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

Dividend yields of up to 11%! Here are 3 UK passive income stocks to consider

Searching for ways to supercharge your passive income with UK dividend stocks? Here are three that have grabbed our writer's…

Read more »

Young Caucasian woman at the street withdrawing money at the ATM
Investing Articles

£10,000 invested in NatWest shares at the start of 2025 is now worth…

NatWest shares surged into 2025, but things have become a little more complicated in recent weeks. Dr James Fox explores.

Read more »

Investing For Beginners

Why the FTSE 250 could outperform the FTSE 100 for the rest of the year

Jon Smith explains why the FTSE 250 could do better than its big brother when factoring in domestic exposure and…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Tariff fears send the Lloyds share price tumbling, but the dividend yield is climbing

Just when the Lloyds Banking Group share price had been rising steadily, along comes a global upheaval to knock it…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

Here’s how a stock market crash could help an investor retire years early

A stock market crash can be alarming -- but for the well-prepared investor, it can also be an exceptional opportunity…

Read more »

Investing Articles

1 key fact to remember in this stock market correction

This writer takes a look at a FTSE 100 investment trust that is catching his eye after the recent massive…

Read more »

Investing Articles

I was wrong about the Tesla stock price!

Tesla stock's been affected more than most by ‘Liberation Day’. But our writer has other concerns about Elon Musk’s company.

Read more »