Is NOW the time for me to buy Aston Martin shares?

At Aston Martin Lagonda (LSE:AML) share price in Euro continues to grow. It rose after the release of encouraging full-year financials in mid-week business. And it has yielded even more on Thursday – the luxury carmaker is now 6% higher on the day.

At 220p per share, Aston Martin shares are trading at an eight-month high. But can James Bond’s favorite car maker continue its recent recovery? And should I buy a business for my investment portfolio today?

Finances are stronger

To recap, on Wednesday the company announced a 26% increase in profits in 2022. At £1.38bn, sales were boosted at the end of the year as fourth quarter turnover rose 46%.

On the negative side, pre-tax losses rose to £495m last year from £213.8m in 2021. This was attributed to higher-than-normal cost inflation and heavy investment in branding, marketing and product launches.

But in all this latest update has given investors beleaguered Aston Martin who is more than happy to take a hole in it. end of autumn fund.

Worries about Aston’s financial position have long plagued the company. So the news that net debt also fell, to £765.5m from £891.6m, provided another cause for celebration.

Sound strategy

No one has ever doubted the incredible power of the Aston Martin vehicle brand. What is happening underneath the premium motorcycle maker is what worries investors.

Wednesday’s update, then, raised hopes that the business would recover. Encouragingly, there are indications that management’s decision to target the ‘ultra-luxury’ market is also paying off.

The company says that 80% of its GT/Sport range has been sold by 2023. It sold 6,412 vehicles last year and expects wholesale volume to increase to 7,000 this year.

Spending among high-value consumers remains unaffected by the economy. In fact the appetite remains strong during this period even as the price of the preferred item rises. Aston Martin’s good gross profit last year (which rose 2 percentage points to 33% at the end of the good price) is proof of this.

Here’s what I’m doing right now

I like to play a good recovery. And I’ll keep an eye on Aston Martin. But for the time being I don’t like investing in car manufacturers.

Analyst Sophie Lund-Yates of Hargreaves Lansdowne has summed up my opinion of the car maker in a nutshell. He commented that “Aston Martin has a respectable product offering but there are plenty of financial plugs to fill. Until that happens, further capital increases cannot be ruled out, despite the £654m equity capital increase that took place last year..”

There have been several false dawns in business in recent years. However, share placement remains a headache for shareholders at the time. Significant cash burn remains a threat and businesses still have a lot of debt on their books.

Supply chain issues and high inflation remain a concern. And businesses have to compete hard in a crowded market to reach sales targets. On balance, I believe Aston Martin shares still carry too much investment risk.