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34 times 21 estimates, 26 times 22 estimates. it is hardly cheap but nowhere near the frothy levels of before when i last commented here. the results need some comments from the management pointing to stickiness for post covid sales to stop it falling further.
I meant AO. should have similar share price increase as Germany is a bigger country than UK . The company will make more profits in Germany Than UK. I presume France will be next to expand, so the market potential would be huge. I am selling some other shares in my portfolio to release more funds to top up this one. I liked the business as I have bought many items from it over the years.
This definitely isn't Ocado. Ocado are way overvalued. Their P/S is around 4 whereas AO is around 1. Ocado haven't made a profit in 21 years, AO has started to make a profit.
Feels cheap this share. I’ve said it before, I’ll say it again, this ain’t no Ocado - it should benefit from all those household savings, regardless of being a supposed COVID beneficiary. Just my opinion- dyor. GLA to all invested.
They are using the standard valuation metrics that I and IBs use. A mix of relative valuations metrics like PE, P/S and then DDM and DCF.
https://github.com/SimplyWallSt/Company-Analysis-Model/blob/master/MODEL.markdown#value
hopefully that link works and should direct you to the potion of the page that goes over the method used
How is that calculated AbuRyu out of interest?
In terms of valuation, I use the same approach as the equity research department's within the IBs. I use a number of valuation metrics (PE, P/S etc) as an initial gauge then use more advanced techniques to forecast outwards.
What is Simplywall valuation methodology?
@17.00 I had a look on simplywall.st today and it had the following info:
Fair market value for AO at around 131p - 92% overvalued based on price at 252
Boohoo valued at 384 - 16.6% undervalued based on price at 320
ASOS at 5876p -11.8 % under valued ( even more after today's drop) based on price of 5184p
Ocado valued at 789p -148.8% overvalued based on price of 1962
Hedged
Thank you that is really helpful to a layman like myself!
I dont consider it to be overvalued.
When I do a few quick mental arithmetic on valuations compared with other similar companies. I start with basic fundamentals of revenue vs mkt cap, PE ratio, growth rates, EPS etc. Then I compare to other companies. So I would look at Ocado and think its massively overvalued. Boohoo is slightly overvalued but AO World is either fairly valued or slightly undervalued.
AO - rev 1.6bn - mkt cap 1.2bn
Boohoo - rev 1.7bn - mkt cap 4bn - PE 43.
Ocado - rev 2.3bn - mkt cap 12bn
When I start to forecast profits and look at valuation metrics such as discounted cash flow or dividend discount model I think AO World are undervalued. Their revenues are increasing by 60% currently, but like i said before, they need to translate these into profits .
Hedged
So based on the extraordinary growth and business done over the last year, you dont feel that the rapid increase from April 20 from pre covid levels was overdone.
I havnt got a problem with riding the rough times, am probably too quick to jump in with another buy when shares drop, but I just can't shake off the feeling that the share was only ever above 2 quid 5-6 years ago and has been consistently sub 2 quid until April last year.
I pray I'm wrong and this will be quid again by June!!
JG68 - I didnt expect this sort of drop. I havent bought any dips yet but I plan to. The growth rates here are extraordinary, bigger than Boohoo, Asos, Ocado etc.
My only criticism would be the size of the profits they have made vs revenue but, and it's a big but, there are making the right noises regarding Germany and I can only see demand increase so I suspect profits will follow. However, this fall is overdone but welcomed as its providing me with an opportunity.
Have to stay in for the long term, it’s rough at the moment but it will pass and gains will be made.
I’m a few thousand down at this point in time but am confident that this downturn is a short term thing.
I've already topped up twice to minimise my loss, which is why I'm trying to get peoples thoughts on the SP history pre covid, because am feeling like it's throwing good money away at this rate.
Not derampi g and shorting as other people think.
Have also emailed Cynthia Alers Investor relations about this.
Have to say in a space of less than a month, we have such dramatic fall based on little volumes each day. Not quite sure How MM's are working. Ready to top up when it is bottom to minise the current loss and no doubt it will rise again
I'm still invested but top sliced around 300.
This looks to part of a bigger sector rotation going on. Online retailers are all down today and yesterday. Who knows where the bottom is but demand is still increasing and the growth rates are still extraordinary.
That couldn't be further from the truth.
I'm just a PI who has only been trading since last year, trying to ascertain people's thoughts behind a 25% drop in SP since results.
Problem is too many people talking up shares in such a persuasive tone, that not very experienced investors like myself can get drawn into the vibe.
Shorting, that's the most foolish comment, I wouldn't know how using the HL APP.
It's rather disingenuious JG68 to say you're invested. You only need to look at your post history to see you say the same spiel across all shares that you're looking to or have shorted. I can't see a positive post.
Not deramping it , I'm invested, just deciding whether to take a loss because this is going one way.
The price history speaks for itself.
JG68 is trying to get a cheaper price by deramping it. The company has expanded in Germany and already profitable. With Germany in never ending covid infection , the online business will stay . The share price has lost quite a lot since high, indeed. I guess June result will be highly expected to be good.
My real concern is that this was consistently trading between 1 and 2 pounds pre covid and even seemed on a sub £1 downward trend until covid gave it a turbo charge to new highs.
So is this now a sustained correction back to its real value, or has all the excessive business it won been enough to transform this business onto a different level.
If you look at the price history, October 2019 65p, Feb 2020 65p, Then after 6 months of covid, the dizzy heights of 4.20 in November 2020.
It's dropped 20% since great results and even DC stayed blue today.
I don’t get this price drop, but, if shares always did the logical thing, trading would be like stealing candy off a baby. I’m in this share for quite a bit, having topped up again last week. It’s certainly not time to call it a day in my view, as even if internet based traders like AO are not presently in vogue as we move out of COVID, as technically, they have to compete with retailers that have now reopened, my thinking is households have saved so much in the pandemic, that splashing out on new goods for the home should impact AO positively anyway. Also, I don’t know too many people that wouldn’t compare the white good costs in John Lewis for example with what they would pay on line at AO. It’s a hold and top up further if it drops much more for me. GLA.
Difficult day for AO. Lots of small volumes today peppered with some decent wedges thrown in the mix (30K, 22K buys etc.) from brokers. Should have bought today rather than last week but decent upside to be had!
Actually, if one looks at the small automatic trades, it might be possible MM's are deliberate to mark down the price dramatically to trigger the automatic sells in order to fill a larger buy order. There is no fundamental issues with the company performance to justify the falls recently.