I decided to have a bit of fun with ChatGPT and asked what it thought of the worst-performing UK stock in my portfolio.
The company is FTSE 250-listed luxury car maker Aston Martin (LSE: AML). Yes, yes, I know, only an idiot would buy that. But last September, I decided its shares had fallen so far there was surely a chance of making money.
Instead, I’m staring at a 35% paper loss — but I suppose it could be worse. Over 12 months, the Aston Martin share price has plunged 45%. Over five years, it’s collapsed 96%.
So I asked my AI chatbot buddy for its view on what is thankfully my worst share purchase (although Ocado Group might have something to say about that).
The Aston Martin share price is a car crash
My question was: Exactly how stupid was I? Happily, my boon robot companion was programmed to be polite and replied: “You weren’t necessarily stupid to invest in Aston Martin, but you did take on significant risk in a company with a volatile history“.
Personally, I think stupidity does come into it. At least I only invested the scrapings of my cash account, rather than a larger sum.
My assumption that Aston Martin was through the worst wasn’t entirely unreasonable, I was happy to hear. “The problem is that a falling stock doesn’t necessarily mean it’s undervalued. Sometimes, it’s a warning sign of deeper, ongoing issues”, ChatGPT said.
It noted that the stock was floated in 2018 at a wildly optimistic valuation of £19 per share. The reality has been brutal, with the shares down to £1.05.
ChatGPT noted that Aston Martin has a history of high debt and poor cash flow, forcing multiple equity raises that diluted shareholders and made recovery harder. “Even after securing backing from investors like Mercedes-Benz and executive chairman Lawrence Stroll, the company still struggles to turn a consistent profit”, it added.
Aston Martin may have an iconic brand but competes against Ferrari, “which operates with higher margins and a more stable financial model“.
Happily, there are reasons for optimism. “Aston Martin has been refreshing its lineup, and the brand’s Formula 1 presence helps keep it relevant. If its new models sell well, revenue could improve.”
This FTSE 250 stock is driving me to drink
If Aston Martin can drive efficiencies and profitability, it could turn a corner (I see what you did there, ChatGPT). Or it could be acquired by a larger automaker or investor looking for a turnaround project.
But ChatGPT had concerns too, warning the group’s £1.3bn net debt limits growth opportunities, especially with interest rates high. The luxury market also continues to struggle.
Overall, ChatGPT isn’t convinced, concluding: “The stock remains highly speculative, and its future depends on execution and external conditions”.
Personally, I would have been harder on myself. I was dazzled by the brand and, worse, by the shallow notion that the shares could snap back and hand me a quick profit.
Most of my portfolio is in solid FTSE 100 blue chips, so maybe I was due a bit of rash fun. I’ll hold onto the shares but won’t take this kind of punt again. It’s making my portfolio look messy and me feel like a chump. Even if ChatGPT is too polite to say.
The post I asked ChatGPT to rate my worst-performing UK stock – here’s what it told me appeared first on The Motley Fool UK.
Should you buy Aston Martin now?
Don’t make any big decisions yet.
Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.
And he believes they could bring spectacular returns over the next decade.
Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows…
When such enormous changes hit a big industry, informed investors can potentially get rich.
So, with his new report, Mark’s aiming to put more investors in this enviable position.
Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!
Grab your FREE Energy recommendation now
More reading
Investors considering a £10,000 holding in this FTSE 250 gem could make £17,599 a year in passive income over time!
2 super-cheap shares with dazzling dividends I’m considering buying today, and one I’m sadly not
With a spare £50 a month, here’s how an investor could start a Stocks and Shares ISA
Up 700% in a year! Could this be the biggest US growth stock of 2025?
Should cheap Lloyds shares be on investors’ shopping lists in February?
Harvey Jones has positions in Aston Martin Lagonda Global Plc and Ocado Group Plc. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
