In September last year, I bought Aston Martin (LSE: AML) shares. That turned out to be my worst investment decision ever.
In my defence, I invested less than 1% of my Self-Invested Personal Pension (SIPP). I thought I’d have a flutter with a bit of spare cash sitting in my trading account. A bit of fun, or so I thought.
There’s nothing funny about what’s happened since. The share price has crashed 45% in the last year, including a 22% plunge in October alone.
Since its IPO in 2018, the luxury car maker has lost 96% of its value. It’s only still going because Canadian billionaire Lawrence Stroll keeps ploughing in more cash. He’s good for it, but even he must wonder why he does it.
FTSE 250 stock crash
There are plenty of reasons Aston Martin has been a disaster, many beyond its control. Costs have ballooned. Its expensive shift to electric is taking longer than expected. Sales in China have slowed as its economy falters. Donald Trump slapped a 25% tariff on imported cars, including from the UK.
The vehicles are stunning, the financials horrible. New CEO Adrian Hallmark, who impressed at Bentley, promises financial discipline, but it’s a big job. I admire Stroll for his commitment. These are tough times, especially for luxury stocks, but the outlook could brighten if China picks up next year, and interest rates fall.
2024 full-year results in February offered some encouragement, with the average selling price hitting a record £245k. Yet total revenue fell 3% to £1.58bn and net debt jumped to £1.16bn. Higher interest rates aren’t helping either. Hallmark called 2025 a “turning point” but Aston Martin keeps driving into the same ditch.
Another quarterly loss
On Wednesday (29 October), Aston Martin reported a third-quarter loss of £112m, up from £12.2m a year earlier. Wholesale volumes fell 13% to 1,430 vehicles, while revenue for the first nine months plunged 26% to £740m.
Management blamed tariffs, Chinese tax changes and supply-chain chaos following a cyber-attack at Jaguar Land Rover. Production of the £850,000 Valhalla hybrid supercar was meant to lift the second half, but only one has rolled out so far, with 150 due by year-end.
The plan is to build 999 Valhallas, but whether that will happen as promised is anyone’s guess.
Lessons from the crash
Should investors consider buying this stock today? They should approach with extreme caution. Yet I’m not selling either. There’s so little left it’s hardly worth it. I’ll leave it propping up the Gain/Loss column in my online SIPP, showing a 61.66% loss, as a reminder to do better research next time.
Also, Aston Martin is a cyclical stock. Sentiment is so negative that even a small piece of upbeat news could drive the share price higher.
Thankfully, most of the FTSE 100 and FTSE 250 stocks I’ve bought since setting up my SIPP in 2023 have been far kinder. Big early winners include insurer Just Group, up 170% after its takeover, and Costain Group, up 145%. Rolls-Royce, 3i Group and Lloyds Banking Group have more than doubled my money in short order.
I love buying individual stocks. It’s been hugely rewarding, but Aston Martin has been a harsh lesson. Throwing money at something isn’t fun. The real pleasure from investing is getting it right.
