The Aston Martin share price has recently doubled. I’m stunned!

The most attractive thing is fast Aston Martin (LSE: AML) for the past few years has been an independent car. Aston Martin’s share price has fallen sharply, falling 59% in the past year.

But in a shorter time, things have looked better. In fact, the automaker’s stock has doubled since early November. I did not expect to rise so quickly. So, was I wrong not to buy into the company earlier – and maybe I should invest now?

Why am I already bearish

I have been consistently downbeat about the prospects for Aston Martin. That is mainly because of their business model.

Considering the debt, it is now necessary to pay a huge amount of interest charges as well as having to pay off the debt at some future date. The risk of eating too much to profit. It also raises the risk that the company will try to raise funds by diluting shareholders, which it did last year.

On top of that, the basic economics of today’s business are not attractive to me even when setting aside the thumping pile of debt. In the first half of last year, for example, the operating loss was £90m. Interest charges on top of that.

Reasons to be bullish

But have I been too pessimistic in my analysis of the company’s prospects? After all, Aston Martin’s declining share price suggests that some investors thought it was undervalued a few months ago.

The business certainly has some things in place that can help its commercial performance in the future. The brand is good and has a loyal and well-liked fan base. Businesses have changed their product mix and pricing, which can increase profits. In the most recent quarter, for example, profits rose 33% year-over-year even though wholesale volumes rose only 3%.

The company has attracted money from investors who are experts in the car arena, including Mercedes-Benz. While it may be a strategic investment rather than purely financially motivated, I still see it as confidence in Aston Martin’s prospects.

Margin of safety

One of the concepts Warren Buffett uses when investing is always having a margin of safety when evaluating a company’s prospects.

I managed to double my money invested in Aston Martin in the last few months. But I’m not convinced about the company’s commercial prospects in November – and to be honest, nothing has happened since then to change my mind.

With increasing momentum and investor enthusiasm, it is likely that Aston Martin’s share price will continue to rise rapidly.

But I’m not sure about that possibility. In fact, I think the stock could pull back. Aston Martin has eroded shareholder value in recent years despite recent price jumps.

The stock price has fallen 96% since the company’s 2018 listing on the stock market. Past performance is no guide to what will happen in the future, but companies continue to bleed money and make huge losses. I don’t see a margin of safety for me in such a situation. I will not invest.