Aston Martin is a hallmark British car manufacturer that was launched way back in 1913. With that being said, the firm only went public in 2018, with its much-anticipated IPO valuing the firm at £4.3 billion.
Since then, its stocks have been moving in the wrong direction – with Aston Martin now looking at a market capitalization of less than £1 billion.
Nevertheless, in this article – we show you how you can buy Aston Martin shares online in the UK. We also discuss the best UK stock brokers to do this with, alongside a brief discussion on where Aston Martin shares could be heading in the coming years.
Step 1: Find a UK Stock Broker
In order to buy Aston Martin shares, you will need to find a UK stock broker that meets your needs. Not only do you need to ensure that it gives you access to the London Stock Exchange – but you also need to look at fees, commissions, regulation, and payments. With hundreds of potential platforms meeting this criterion, finding a suitable broker can be time-consuming.
With this in mind, below we list a small selection of UK stock brokers that allow you to buy Aston Martin shares in a safe and cost-effective manner.
1. eToro – Buy Aston Martin Shares Commission-Free
If you’re a seasoned investor, then eToro needs no introduction. After all, the online broker has since attracted over 12 million traders to its platform. This is somewhat impressive when you consider that the broker only launched in 2007. One of the main attractions for investors is that eToro does not charge any share dealing fees.
This is the case across all the 800+ stocks and 17 exchanges that it supports – including that of Aston Martin shares. As a result, the only trading fee that you need to take into account is that of the spread. When trading during standard market hours, this rarely exceeds 0.5% on major FTSE shares. If you decide that you want to diversify into other investment classes, eToro also hosts indices, ETFs, cryptocurrencies, forex, and commodities.
eToro is also very popular with first-time buyers that have never traded stocks before. This is because the platform is super-easy to use, and it takes just minutes to open an account, deposit funds, and purchase your chosen shares. Similarly, the eToro CopyTrader feature is also widely used by newbies. This allows you to copy an experienced trader like-for-like. In other words, every time the investor buys or sells a stock – your portfolio will mirror the trade.
In terms of the fundamentals, eToro allows you to invest from just $50 into Aston Martin shares. You will need to meet a minimum deposit of $200 though, so you can use the remaining balance to invest in other assets. The broker supported a plethora of convenient payment methods – such as a debit/cred card, e-wallet, and banks account. Your investments are safe at the broker, with eToro holding a license from the FCA. FSCS protection is also in place.
75% of retail investor accounts lose money when trading CFDs with this provider.
2. IG – Trusted UK Share Dealing Platform With Competitive-Fees
IG is an established UK share dealing platform that also offers CFDs and spread betting facilities. Launched in the early 1970s, this makes IG one of the oldest and most trusted brokerage firms in the space. On top of listing Aston Martin shares, IG gives you access to over 10,000 equities. This includes companies listed on the AIM, London Stock Exchange, and dozens of international markets.
As such, you can diversify across heaps of other companies at the click of a button. Although IG isn’t a commission-free share dealing platform like eToro, its fees are still very competitive. This starts at just £3 per trade if you place 3 or more orders in a 30-day period. If not, you will pay an entry-level commission of £8 per trade. On top of equities, IG also covers ETFs, investment trusts, and mutual funds.
Additionally, IG is very strong in the short-term trading department. This is because you can buy and sell thousands of financial instruments from virtually every asset class imaginable. Unless you are trading stock CFDs, there are no commissions to pay. The trading platform also covers MT4, which is great for advanced analysis and automated systems. In terms of getting started, IG requires a minimum deposit of £250.
You can add funds with your debit/credit card or UK bank account, albeit, e-wallets are no longer supported. While debit cards and bank transfers are fee-free, credit card deposits are charged at 0.5% or 1% when using Mastercard/Visa, respectively. Finally, IG is a heavily regulated broker much like eToro. Not only does it hold several brokerages licenses (including the FCA), but its parent company is listed on the London Stock Exchange.
Although Aston Martin has been producing highly sought-after luxury cars for over a century, this isn’t to say that its shares resemble a viable investment. On the contrary, you need to perform some homework on the credentials of Aston Martin before making a purchase. In doing so, you can be 100% sure that the shares are right for your long-term investing goals.
As we briefly noted earlier, Aston Martin was one of the shock IPOs of recent years. This is because although the firm has been making cars since 1913 – it only went through the floatation process in 2018. Nevertheless, the subsequent IPO was held via the London Stock Exchange.
At the time of the launch, its shares were priced at £19 each. This gave the car manufacturer a market valuation of over £4.3 billion. This put it firmly in reach of becoming a FTSE 100 company pretty-much overnight. Unfortunately, Aston Martin shares have been moving southwards ever since.
At the time of writing in July 2020, its shares are priced at just £5.30. This represents a significant drop in value of over 72%. In simple terms, had you invested £10,000 into the Aston Martin IPO, you would now be left with approximately £28,000.
As we cover in more detail shortly, this does mean that you have the chance to buy Aston Martin shares at a huge discount in relation to its initial IPO valuation.
Aston Martin Dividend Information
As is to be expected from a company that only went public in late 2018, Aston Martin is yet to pay any dividends. In the current COVID-19-related economic climate, this will likely be the case some for time. As a result, the only way that you will be able to make money from your Aston Martin investment is via capital gains.
Whether or not you decide to buy Aston Martin shares should be dictated by your own in-depth research. With that said, if you are still undecided, below we list some of the reasons why an investment into the hallmark British car manufacturer could be worthwhile.
Huge Discount From IPO Valuation
As noted above, the result of the Aston Martin IPO was that the firm finished its fundraising campaign with a valuation of £4.3 billion. At the time of writing, this stands at less than £990 million. With that in mind, you stand the chance to buy the shares a huge discount.
It is worth remembering that investors all of shapes and sizes were happy to pay an initial share price of £19. Otherwise, the firm wouldn’t have raised as much capital as it did in 2018. As such, if you feel that the sharp drop is unwarranted in the long run, then you will be able to get your hands on the shares at over 70% less than its initial valuation.
In terms of short-to-medium term targets, the overarching objective has to be for Aston Martin to regain its initial IPO price. At £19 per share, this would require an increase of 258%. Unfortunately, there is no guarantee that the firm will ever be able to do this – so never assume that the stock will ‘eventually recover its losses’.
Shares More Than Doubled in June 2020
Much like the rest of the FTSE 100, Aston Martin shares were heavily impacted by the wider effects of the coronavirus pandemic. However, it should be noted that the stocks went on an incredibly positive run after bottoming-out in May.
Hitting lows of £2.70, Aston Martin shares hit £7.90 in the second week of June. This translates into an increase of over 111% in just one month. The shares have since retracted to £5.30, but this is a positive sign nonetheless.
Reasonable Cash Levels and Cost-Cutting
Management at Aston Martin is doing everything it can to shore up the company’s balance sheet. This includes its ongoing negotiations to cut 500 jobs, as well as efforts to make its production line more efficient.
Furthermore, and perhaps most importantly – Aston Martin has cash flow levels of around £500 million at present. This should, one would think, be enough to see the car manufacturer through the uncertainties of COVID-19.
We should also make reference to Lawrence Stroll – the CEO, Chairman and majority shareholder. Stroll is well experienced in this particular industry, and has a personal net worth that is reported to be in excess of $2.6 billion. As such, the firm potentially has the right man steering the Aston Martin recovery ship.
So now that we have discussed some of the positive reasons surrounding an Aston Martin investment, it is crucial for us to now consider the risks. After all, the shares are now worth just a fraction of their IPO valuation, so this should present an immediate red flag for you.
Major Decline in Revenues
First and foremost, we need to look at the firm’s recent struggles in the sales department. In its most recent publication, Aston Martin noted that its global sale levels are now down by nearly 60%.
Sure, much of this can be blamed on the wider impact of COVID-19, but a figure of this magnitude is fundamental nonetheless. In particular, Aston Martin saw revenues drop by almost 86% in one of its most lucrative markets – China.
Losses Increase by 587%
In terms of its operating profits and losses, things are looking extremely bleak for Aston Martin. Last year, the car manufacturer reported losses of “just” £17.3 million – before tax. And this year? The firm reported pre-tax losses of £118.9 million.
This represents a significant increase of 587%. We also need to make reference to the firm’s gross margin pressures. In last year’s publication, the firm reported a very healthy gross margin of 42.1%.
Fast forward to this year and this has since been squeezed right down to 5.2%. Much of this was put down to the firm’s high fixed costs, which of course – remains constant irrespective of whether or consumer demand is down.
The most worrying aspect of Aston Martin’s dwindling balance sheet is that of its ever-increasing debt levels. As per the company’s most recent figures, Aston Martin is currently looking at over £1 billion of net debt. To put that into perspective, this is more than the total market capitalization of all circulating Aston Martin shares as of July 2020.
Nevertheless, this subsequently forced Aston Martin to secure emergency funding from outside investors. With over £530 million being raised, £262 of this was secured from the Yew Tree consortium.
Then, you need to consider the firm’s uncanny net debt to earnings (EBITDA) ratio – which is now hovering above the 10 times-mark. To clarify, financiers often consider taking action when this figure surpasses three times.
Step 3: Open an Account and Deposit Funds
If you have gone through the process of performing independent research on Aston Martin and you wish to proceed with your investment, we are now going to show you what you need to do. Although you have several options at your disposal when it comes to choosing an online broker – we show you how to invest in stocks with eToro.
As we briefly noted earlier, this is because it takes just minutes to get set up with an account and deposit funds – and you can buy shares without paying any fees or commissions.
So, the first thing that’s you need to do is visit the eToro website and look out for the ‘Create Account’ button. Upon clicking it, you will then be asked to provide some personal information.
This is standard at all online brokerage sites, and will require the following:
- Full name
- Date of birth
- Home address
- National insurance number
- Contact details
- Username and password
Once you have opened an account, eToro will ask you for some verification documents. This ensures that it complies with the FCA. As such, you will need to upload the following:
- Passport or Driver’s License
- Recent Utility Bill or Bank Account Statement
If you don’t have the time to upload the documents now, you can proceed to deposit and invest up to £1,800.
In terms of funding your eToro account, you can choose from one of the following payment methods:
- Debit Card
- Credit Card
- UK Bank Transfer
Take note, you will need to deposit at least $200 – which is about £160. Moreover, all deposits at eToro come with a 0.5% currency conversion fee.
As soon as your account has been funded, enter ‘Aston Martin’ into the search box at the top of the screen. When the result loads up, click it,
After that, click on the ‘Trade’ button.
You will then be presented with an order box. Enter the amount of money that you wish to invest in Aston Martin. This needs to be in USD, and must be at a minimum of $50 (about £40). Finally, click on the ‘Open Trade’ button.
Note: Note: Outside of standing trading hours, you will need to press the ‘Set Order’ button. In doing so, your Aston Martin share purchase will be completed once the markets reopen – at the next available price.
Make no mistake about it – Aston Martin has had a torrid time on the London Stock Exchange since its 2018 IPO. In fact, those that bought shares during the floatation are now starring at huge losses of over 70%. Looking deeper at the firm’s financials – sales and margins are down, and debt levels are slowly but surely becoming dangerously high.
On the flip side, at a market price of £5-£6, many would argue that Aston Martin shares can be purchased at a significant discount. If you are feeling bullish on the shares yourself, eToro allows you to make an investment on a commission-free basis.
Simply click the link below to get started!
75% of retail investor accounts lose money when trading CFDs with this provider.
How much were Aston Martin shares when the firm first went public?
Aston Martin only went public in 2018 even though the company was first founded in 1913. Nevertheless, its IPO valued the stocks at £19 per share. At the time of writing in July 2018, the very same shares are worth just over £5.
What stock exchange is Aston Martin listed on?
Aston Martin is listed on the London Stock Exchange. This means that you can buy its shares from hundreds of different UK-based brokers.
Does Aston Martin pay dividends?
No, Aston Martin does not pay dividends. This is largely because the firm was only listed in 2018. Moreover, Aston Martin has been struggling financially over the past few years, so don't expect any dividend announcements for some time.
Who is the largest shareholder in Aston Martin?
The largest shareholder in Aston Martin is Lawrence Stroll. He is also the CEO and Chairman of Aston Martin.
Where can I buy Aston Martin shares?
Most UK stock brokers give you access to the London Stock Exchange, meaning that you can buy Aston Martin shares with ease. With that said, eToro is one of the few online brokers that allows you to buy Aston Martin shares on a commission-free basis.