In my opinion what truly can make the investment an homerun (or not) is:
1-The evolution of the portuguese economy in the form of car sales (more specifically Toyota an Lexus car sales) and, to a lesser extent, real estate market (because the company as both directly and indirectly a significant real estate position)
2-Toyota Motor Corporation long term resiliency (basically, if they stopped manufacturing cars or if their cars lost interest this investment would have little if any upside)
So, I must monitor these factors closely. Factor number two is both unlikely and very long term, meaning that monitoring has little use. The portuguese real estate market is less meaningful for the company and less objective to monitor. However car sales are easy to monitor.
And April (provisory) car sales are out:
-In April 2014, total national car sales were up 54.2% year over year, totaling a January to April increase of 46.4% yoy.
-In April, Toyota light vehicles sales increased 68.5% yoy totaling a 49.9% yoy 4 month increase.
-In April, Lexus light vehicles sales increased 475% yoy (only 4 units sold in April 2013) totaling a 107.3% yoy 4 month increase.
-In April, Toyota heavy commercial vehicles sales increased 500% yoy (only 2 units in April 2013) totaling a 83.3% yoy 4 month increase.
These data seem great but are less meaningful than they seem at first sight. The truth is that the first 4-5 months last year were very weak and April was one of the worst months (if we adjust for seasonality). Since the economy slowly improved throughout 2013 yoy growth should also decrease through 2014. However, it is likely that the pace continues for some months and, since car sales are still very low in comparison to historical levels, that could mean that this increase might be on the worst case a new normal but likely still below normal.
More importantly, what do current numbers mean in comparison to company projections?
disclosure: read previous posts disclosures and the introduction post. I own Toyota Caetano shares