Why I Want To Keep My Penske Stock

On Wednesday July 22nd 2026, Roger Corporation and Mitsui & Co. submitted an unsolicited bid to take Penske Automotive Group (PAG) private. The offer to me and other minority shareholders is $210 per share in cash. The closing price the day before the offer was $195.19, a premium of 7.6%. Moving beyond the woeful premium, I think it’ll do me some good to write about how great this company is, and why I don’t want to sell.

Valuation At $210

PAG has 65.7 million shares outstanding. At $210 a share, that values the equity of the company at $13.8B. PAG does have $2.11B in long term debt, giving an enterprise value of roughly $16B. The enterprise value (EV) is important because a lot of the comparisons all have varying levels of debt, and we want to make those comparisons a little easier.

Penske Transportation Services (PTS)

Let’s start with the hidden jewel. I’ve owned the company for five years, and I’ve yet to see an article or piece on this gem. PAG owns 28.9% of PTS. You might not have heard of this company, but you’ve definitely seen it. Those yellow trucks and semis are all over American interstates. And you’ve probably noticed that unlike U-Haul, these trucks are in prime condition. If you’ve done as I have and swung by a PTS, U-Haul and United Rentals depot, the Penske operation is head and shoulders better. U-Haul and United look like they might be going out of business with the way they treat their equipment. This, you’ll find, is the case throughout the company. Penske operations are top notch.

Looking at U-Haul and United Rentals, while neither is a direct compare, you’ll see United Rentals enterprise value is about 32 times its earnings. U-Haul is trading at a ridiculous 302 times its earnings. The enterprise value of U-Haul is roughly $21B, for an operation that is having a hard time earning more than their depreciation charge.

For the first six months of 2026, PAG reported $98.5M in equity earnings from PTS. At a 32x multiple like United Rentals has, that’s an enterprise value of $6.3B for PAG’s stake ($21.8B for all of PTS). While I don’t get access to all of PTS’s financials, this seems reasonable given that U-Haul is valued at $21B with virtually no earnings and rental facilities that look like garbage dumps. Seriously, drive by any Penske Truck Rental facility and tell me it doesn’t look first class.

At the $210 offer, PAG is valued at $16B EV. And I’m sitting here claiming one single component, PTS, is worth $6.3B. And most people are overlooking it.

Penske Australia & New Zealand

Again, not something I see covered elsewhere, but PAG owns a power business in Australia and New Zealand. I encourage you to visit their website and watch the video. Even with the heavy duty mining in Australia as a given, how can you not be drooling at the AI applications for this segment of the business? These are the motors you want for power base loads, similar to what Elon Musk did in Memphis.

What is this collection of dealerships and maintenance crews worth? I’m not entirely sure. But with exclusive contracts like being the sole distributor for Detroit engines, Rolls-Royce Power Systems and Bergen Engines for these regions, it’s not something I’m dying to sell, and Roger Penske agrees so much he is trying to buy me out.

Penske Truck Group

PAG isn’t just selling cars, it’s also selling semi-trucks. With 45 locations. And the rumors are we are about to go through a truck cycle. Those on the road are old and getting worn out. It is about time for these dealerships that have been struggling a bit to shine. That’s the beauty of PAG, it’s diversified, and this is one of those diversifications.

The Car Dealerships

I believe a lot of people see PAG and think it is just another dealership stock like SAH, AN, GPI, LAD, ABG. But each of these have a different makeup. And you know what I’m going to say, Penske’s is the best. These aren’t just any dealerships. These are prime assets acquired over many years. Roger has added Modena Ferrari, the Ferrari dealership at the home of Ferrari. He has also added three Porsche dealerships and a Ducati Dealership in Melbourne. Are you noticing the trend? PAG skews heavily luxury. No other public option comes close.

Dealership Aggregate Pricing

Let’s look at a crude measure of dealership value in the public markets.

In my calculations here, you can see that even at $210 a share, PAG’s cost/dealership isn’t at a premium to the market. (Oh, and those 45 truck dealerships? Penske Australia, those are FREE in this evaluation)

But I argue it should be at a premium. It’s mix of dealerships is by far the best and it's not even close. Porsche dealerships spread all over the planet, 15 Ferrari dealerships, etc. How is this not priced at a premium to the others?

Less Leverage

On top of all of this, PAG has assembled this amazing set of assets without mountains of debt. Not only are the other public dealerships incomparable based on the quality of their assets, all the other dealership stocks have depressed prices because of the debt overhang they carry. Meanwhile Penske does not. It deserves to trade at a premium to all of those stocks. It’s diverse and has way more market cap to debt, heck, GPI has more debt than market cap right now.

Finally

I don’t need to assemble a final valuation of PAG. It’s clear from properly looking at PTS that $210 a share is way too low. But moreso, I DO NOT WANT TO SELL Ferrari Modena. I DO NOT WANT TO SELL Bill Brown Ford. I DO NOT WANT TO SELL 25 Porsche dealerships and 15 Ferrari dealerships. I’m very happy owning a piece of these wonderful assets. I’m very happy with Penske’s ability to steward these assets and I trust Greg will do great as well. At some point in the near future, it’ll be up to my fellow shareholders (or ETF committees) to vote on whatever the proposal ends up being. I, for one, hope they vote no. And if they don’t, I hope the independent valuation committee realizes all the amazing assets they’ll be forcing me to give up.

Roger Penske is making this offer for a reason, and it isn’t because he is known to overpay for things.