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Thanks all, appreciate the knowledgeable responses - nice to have a sensible discussion / thoughts ??
Yup missed that RC...Cheers
San
@dikbrown likewise agree
@Sanboy - yes, see previous post
ATB
RC
Didnt / dont a lot of tech companies in the US have a PE of 100?
San
@racing
I would be comfortable with a PE of 40 for Argo. Considering the expansion in mining capability and the future expectation that btc will get to 100k. The stock market is forward looking.
Hotstepper hi
I just think it is normal for the US to value their tech stocks at P/Es of 30+. They see 100+ as frothy, 30 as normal and c. 20 as value IMO. So personally I am not concerned. The whole market would have to have a giant correction and structural reevaluation and go back to Value investing ahead of growth thinking. This may happen but if it does it would be a tsunami type effect so almost everything else would be hit as well IMO.
ATB
RC
PS Great name btw ;)
Based on previous bull cycles, this cycle will have a peak, then the price will correct to a lower level and consolidate for a few years before the next bull cycle. That's the base case but not a guarantee.
It sounds like you're looking for a guarantee around how the price will behave - this is not possible (in Argo or any other share). The only guarantee is that the price will go both up and down and sentiment will ensure that sometimes it is overvalued and sometimes undervalued. If you're thinking about investing money you can't afford to lose, please don't do this as there is always a chance that an investment goes bad. Again, this applies to any investment.
R.C - this was kind of the point I was trying to make regarding valuations at the start - is there not a little danger or worry that these sort of figures are unsustainable and eventually will decrease?
I agree that x20 or 30 is about right but some of the others I'd certainly be worried about - is there a possibility everything over corrects the other way?
Neither one or the other. Both. Crypto miner and kick-a$$ blockchain development co.
Also will depend on whether you are viewing Argo solely as a crypto miner, or as a kick-a$$ BlockChain dev co....
IMHO
CC
Agree with the comments - I would say some of these players are overbought but that is the market. Here is some context just as an FYI...(stock, P/E)
FB - 26
Apple - 33
Alphabet (google) - 36
Netflix - 88
Zoom - 150
Shopify - 437
I won't mention Tesla + we await results of MARA and RIOT to calculate a P/E.
So when we talk of a 20-30 P/E we are being conservative in this context.
ATB
RC
Indeed LB, and other fund managers will see the outsized performance of these crypto funds and want in on the game.
All is well and BTC happily sitting around $50k thinking about when to go on the next leg of the bull run.
It’s also a chance for institutional investors to reorganise their profile to take into account crypto... supposedly a lot of recent selling was on account of funds etc getting too crypto bloated towards the end of the quarter and busting their figure projections, and as such they had to prune the garden.... it might be that the allocations they afford to crypto are increased each quarter due to the rising attention/interest/rewards/fomo in the space
The risk is around regulation. People need to feel warm and comfortable so they believe regulation protects their investment and means low level of Risk. Actually its those regulations that restrict wealth expansion , and actually you could argue they add no value to Risk assessment... Look at banking shares and PPI, BREXIT, etc. Like you said Banking shares are the dinosaurs of the stock market and if they dont move with the times then they risk being left behind, especially when it comes to the adoption of Cryptos
San
Completely agree San, the writing is on the wall. I just always try to rein myself in as there's always an outside chance that it won't happen.
I actually see Argo as no more risky than banking shares - which were previously the bluest of the blue chip, now I see them as high risk, but without the matching return. They are stuck in the past. They'll be around another decade or so, but the most likely scenario is that defi will fill their place - it's better, cheaper and faster. Strange times we're living through!
Well its entirely possible based on the finite amount of Bitcoins. Working on a supply and demand perspective, the demand will only increase with
- more institutions adding cryptocurrency to their portfolio
- expanding ability for consumers to spend crypto on goods.
- Increased QE, devaluing the dollar and increasing Inflation, meaning Crypto being the go to haven
That along with the restricted supply means that the 934billion mcap is incredibly low. Even lower when you assess the dollar valuation.
San
Thanks all, with something as volitile yet amazing as this share its good to sometimes have people remind you of why you invested in the first place :)
Quarterly results due soon, With Argo closing the gap I expect some hot sweaty CEO's practising their speeches as to how they have allowed the underdogs to catch up so quickly.
Mara 31st of March IIRC, 10 Exohash of promised capacity to deliver in an ever tightening time frame - almost done Q1!!
I think there is potential for a reshuffle and if the LTH's don't like the results there are plenty juniors who have great stats catching up.
This is where the BOD's open and honest policy & proven track record of meeting/exceeding installation targets will shine through IMO.
There's talk of BTC getting to USD$1mil in the next 10 years. Who knows if this will happen, but imagine if it did, current valuations would be extremely cheap.
Because BTC is so volatile, BTC miners will be even more volatile. Huge upswings and downswings should be expected.
PE ratios are probably not so relevant in valuation - partly because these are high growth companies, so last year's profits are not so relevant when in the current year your production has increased massively and BTC price many times more valuable.
You'd probably have to look at a cross between Gold miner valuations and Tech stock valuations, as BTC miners will be a cross of these.
I personally just go with what I think it is worth and what the market tells me it is worth on a given day. But do expect a white knuckle ride and position yourself so that you can weather any massive downswing.
Hotstepper, If I remember correctly, both the other BoD's got up to some shenanigans whereas here, everything is crystal clear and above board. I value transparency. ATB
Thanks mystery - the only concern (and I agree it's a small one) is that the 2 companies already mentioned lose any market sentiment / valuation they currently have and we fall in line with that.
Saying that, I think we are much better placed than they are and with a brighter future in terms of other viable options for expansion so I've just talked myself out of my initial point :)
Hotstepper - the market dictates the price of a share. Whether you or anyone else thinks Riot lr Marathon are too high is irrelevant as that is their price. They are down recently as we are on Argo but once we rise they rise.
Hmm £7-£10 end of year. If we get on Nasdaq and Bitcoin hits €100k this is easily achievable without those two factors maybe £5. All a guessing game for now.
Nonetheless hold and and add on dips. Outlook looks great.
Morning all, been holding Argo since Jan and have averaged up on the dips like most on here. Really happy with the fundemantals of the company, BOD, openness etc and holding until at least the end of the year.
My question however is this... Do the knowledgeable people on this board think that the p/e ratios and m/caps of the main competitors are currently too high and therefore comparing us to them with price targets is off the mark? I see both Mara and Riot are down again today pre market.
I do feel we have some catching up to do still in terms of current price but if their prices are re-rated as less than previously thought are the price targets of £7-£10 by end of year for Argo too high??