Ferrari against a juicy discount
How you can invest in Ferrari with a discount through a holding
In every country on the planet, only one family can be the wealthiest. In Italy, the Agnelli family ranks high on the list. Their interests are represented by the company Exor, which the family founded under another name in 1927. In that year, Giovanni Agnelli founded Istituto Finanziario Industriale (IFI).
The family managed a broad group of industrial Italian companies. By far the most important business was FIAT. Back then, a company that not only produced cars, but also trains, airplanes and ships. The Italian economy heavily depended on the success of this industrial conglomerate. The remains of this, once mighty powerhouse, are still visible within the Exor Group, as we will talk about later.
In 1969, the Agnelli family joined forces with another family: the Ferraris. Fiat supported the company with industrial and manufacturing expertise, while Ferrari had built a great brand. To this day, Exor holds a significant position in Ferrari RACE 0.00%↑ of around 20% (with 32% of voting rights).
Ferrari’s strength
Let’s be honest, we can write a 100-page-long investment thesis about Ferrari. (And we might when the time is right.) But sometimes we should not make things harder than they are. Ferrari is one of the world’s most renowned brands. Many people dream of owning a Ferrari, but only a few are able to in their lifetime.
You see, Ferrari probably doesn’t create the best cars. They also do not produce the fastest cars. The brand Ferrari is embedded in the human brain, which associates it with luxury, elegance, exclusivity, and coolness. At an early stage, Ferrari recognized that its only way to survive was to create ‘selective limitation.’ In other words, the company decided to limit production capacity and to grow slower.
There is this famous quote from Enzo Ferrari that goes like this:
“Always sell one car fewer than the market demands.”
The order books of Ferrari are oversubscribed. Some customers have to wait 3-5 years before being able to buy a Ferrari. If you go to your local Porsche dealer, you might be able to get yourself a stock model in just a few weeks.
Ferrari is the perfect example of a so-called ‘Veblen good’: if the price increases, demand surges. Even in economically difficult times, the company has proven to maintain its growth pace.
You pay up for quality
For some companies it’s hard to assess quality. For Ferrari, it isn’t. Both institutional and retail investors know the value that the brand of Ferrari brings. As a result, you pay a high premium for the company on the stock market. Currently, you pay around 35 times earnings for Ferrari, or 32 times earnings for 2026. For a business that doesn’t have much optionality and grows revenue in high-single-digit percentages per year, that is definitely not cheap.
But what if we tell you that you can get it cheaper…
Exor’s stake in Ferrari is worth around €11 billion. At the same time, Exor’s total market capitalization equals €15 billion. If Ferrari were the only investment of Exor, you would heavily overpay by buying Exor. But you feel the catch; it isn’t.
That’s what brings us back to Exor’s origin: Fiat. The company went through many mergers and acquisitions over the years, eventually ending up as ‘Stellantis,’ a car manufacturer that is home to 14 car brands, such as Peugeot, Chrysler, Maserati, Jeep, Alfa Romeo, and, of course, Fiat. Exor still owns 15.5% of that business, which equals €4.5 billion.
So, for the quick calculators, the combined value of Ferrari and Stellantis within Exor’s portfolio exceeds their total market cap already. Now, there is another company that stems from the ‘old’ Fiat era: CNH 0.00%↑ . Besides, Exor has a big investment in healthcare technology business Philips and many investments in private companies, both directly and through their investment company Lingotto.
The investments clearly paid out in the past decades…
Family-owned businesses
The outperformance is no surprise. According to McKinsey, family-owned businesses do outperform non-family-owned businesses over the long run.
For young companies, growth in percentage points is significant. But also for companies that are over 26 years old, the outperformance is clear. Although 1.1 basis points do not seem like that much, that percentage difference compounds over the long run.
With Exor, you are buying a family-run business, Ferrari, with a discount, and lots of other companies for free. The margin of safety seems to be evident, and the chance of losing money is low in our conviction.
If you want to know more about this fantastic company, we have a deep dive ready for our premium members at The Dutch Investors.