RACE - Ensemble Capital - Ferrari: This Stock Has Been On A Tear

2024-04-20 09:00:00 ET

Summary

• “Build one less car than the market demand” is a quote attributed to founder Enzo Ferrari, yet where that line stands is more art than science.
• Ferrari was demonstrating economics more in line with digital and luxury businesses and deserving of a much higher valuation, more like a Hermes or Apple, rather than a typical auto company.
• We believe that management at Ferrari has built one of the strongest luxury brands and customer bases in the world with a complimentary robust business model that uniquely plays to these strengths.

The following segment was excerpted from this fund letter.

Ferrari ( RACE )

Ferrari has had a very successful run since we first bought shares in the company in 2017. It has been one of our most successful investments since, with shares rising over five times, and understandably so given how phenomenal this business is and how well it has been managed....

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