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How to buy and short Aston Martin shares

Luxury sports car manufacturer Aston Martin is one of the most desirable brands in the world. Learn how to analyse Aston Martin’s business and buy, sell and short its shares with IG Bank.

Aston Martin Source: Bloomberg

How to buy in Aston Martin shares

You can speculate on share price movements with derivatives such as CFDs. Derivatives enable you to open a position without taking ownership of the underlying asset. If you think the share price will rise, you would ‘buy’ or ‘go long on’ the shares.

Learn more about the difference between share dealing and trading derivatives

Trading Aston Martin shares

If you want to trade Aston Martin shares, you can follow these steps:

  1. Create an IG Bank trading account or log in to your existing account
  2. Enter ‘Aston Martin’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ in the deal ticket
  5. Confirm the trade

Open a live account or a demo account today.

How to short Aston Martin shares

You can speculate on downward price movements using derivatives. This is known as ‘shorting’ or ‘short-selling’.

Shorting Aston Martin shares

Follow these steps below to short Aston Martin shares:

  1. Create an IG Bank trading account or log in to your existing account
  2. Type ‘Aston Martin’ in the search bar and select it
  3. Choose your position size
  4. Choose ‘sell’ in the deal ticket
  5. Confirm the trade

Derivatives trading is a popular choice for the following reasons:

  • You can speculate on rising or falling share prices without having to buy any assets
  • You can open a position with a small deposit (called margin) while still getting exposure to the full value of the trade. This can magnify profits and losses
  • CFDs are free from stamp duty
  • You can hold multiple positions at the same time in an attempt to offset any losses from one position with gains from the other. This is called hedging

Understanding Aston Martin: a brief history

Aston Martin was founded in 1913, by Robert Bamford and Lionel Martin. In 1914, production of the first car was delayed by the outbreak of World War I. After the war ended, Bamford left the company and it soon went bankrupt. This would be the first of seven bankruptcies.

Vehicle production was halted once again during World War II (1939 to 1945), as Aston Martin was manufacturing aircraft parts. After the war, David Brown Limited bought Aston Martin and began to build the DB series of cars.

In 1964, the brand received a reputational boost when an Aston Martin DB5 was chosen as James Bond’s car in the film Goldfinger. But soon after, the global recession took its toll and the business was sold once again. In the decades that followed, different owners attempted to keep the company afloat, until it eventually piqued the interest of Ford Europe. Ford took full control of Aston Martin in 1991, and the following year, the flagship DB7 model was announced.

Production was booming and by 2005, Aston Martin had produced 30,000 cars. With a growing brand, and numerous racetrack successes, sales in 2017 rose nearly 50%, and the company posted its first profit since 2010. By 2018, it reported a pre-tax profit of £87 million. The increased optimism around the future of the company led to the announcement of its IPO.

Aston Martin shares: the basics

Aston Martin shares listed on the London Stock Exchange (LSE) in 2018, under the ticker symbol AML. It also became a constituent of the FTSE 250.

The company was expecting to receive a valuation of £5 billion once it completed its premium listing, but it ended up setting an IPO price of £19 per share to give a valuation range of £4.3 billion – the bottom end of its target.

In the initial period after the IPO, Aston Martin shares did not fare well, recording the worst first-day performance of any newly-listed stock in 2018. Things did not go well from there on either, with AML shares reaching a record low of 371p in August 2019. The company blamed Brexit and US-China trade disputes for weaker-than-expected demand for its luxury cars.

Buy Aston Martin shares Source: IG charts
Buy Aston Martin shares Source: IG charts

Aston Martin key personnel: who manages the company?

The following people are on Aston Martin’s leadership team:

Andy Palmer President and chief executive officer
Marek Reichman Executive vice president and chief creative officer
David King Vice president and chief special operations officer
Max Szwaj Vice president and chief technical officer
Mark Wilson Executive vice president and chief financial officer
Keith Stanton Vice president and chief manufacturing operations officer
Michael Kerr Vice president and chief HR officer
Michael Marecki Vice president, general counsel and company secretary
Nick Lines Vice president and chief sales officer
Richard Humbert Vice president and chief quality officer
Simon Sproule Vice president and chief marketing officer
Nikki Rimmington Vice president and chief planning officer
Matt Becker Chief engineer

What is Aston Martin’s business model?

Aston Martin’s business model is built around the manufacturing and distribution of luxury vehicles. Its strategy is focused on business stabilisation (following seven bankruptcies in its first century), strengthening the core of the business and expansion of the product portfolio.

According to Aston Martin, ‘the plan targets a significant uplift in profitability and cash generation ensuring that long-term product development is funded from free cash flow and attractive returns are delivered’.

The company continues to expand, hinting at the future production of boats, aircrafts, bicycles and even submarines.

Aston Martin fundamental analysis: how to analyse the Aston Martin share price

If you want to analyse the Aston Martin share price, you can use both fundamental and technical analysis. While technical analysis can help you to identify previous market patterns, fundamental analysis is based on external events and influences, financial statements and industry trends.

You can find the company’s financial information on its registered website. Some of the fundamental analysis metrics you can use to determine the value of Aston Martin shares include earnings per share (EPS), price-to-earnings (P/E) and return on equity (ROE).

  • EPS measures Aston Martin’s profitability. To calculate earnings per share, divide Aston Martin’s profit by the number of outstanding shares
  • P/E measures how much you have to spend on Aston Martin shares to make $1 in profit. To calculate the price-to-earnings ratio, divide Aston Martin’s share price by its EPS
  • ROE defines how much income Aston Martin makes from its assets compared to shareholder investments. To calculate return on equity, divide Aston Martin’s net income by stakeholder equity

Read the beginners’ guide to fundamental analysis

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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