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Kallu get a life you whopper!
Agree topshop was a turbo charge to value it the cooler trading outlook that dampened forecasts
Asos has had good results so far with topshop having tripled sales they had with topshop pre ownership
I think more M&A is the way to go here
I do worry about Shein but I do also think Shein takes more of a bite from boohoo and a younger shopper. As the world opens up speed is and quality will be important and here asos has a clear advantage. Asos just needs to see the risk that Jd sees and having third party brands on sale always leaves you at risk. Asos need to own more of their revenue. Missguided would be a sizeable move and bring lots of eyeballs to asos app. In the U.K. and international
I am hoping the Shein impact will be smaller than feared. The clothes take an age to arrive and are difficult to then return, and are often poor quality. If you also consider the environmental impact of the fast fashion on a larger scale and delivery impact then it surely can not be sustainable.
It seems to be getting a lot of attention as they pay influencers to flog their clothes, however people are soon realising it’s not all that great.
I think drawing an equal sign between the Topshop acquisition and the lower share price is not quite right. The share price only really went down over the last 3 months. Pretty much after the CEO said they expect weaker results due to "bad weather" even though the weather had been pretty decent. Also Shein has been making headlines and the general market hasn't been great and most UK stocks haven't done great over the last 3 months.
Which brings me to the next topic and yes, the market is a forecasting animal but it usually is focused on forecasting the next quarter, perhaps two if it's a "long term" forecaster haha. For me to judge the Topshop deal, I want to see their ROIC over the next 2 years. If that goes down, then probably it was a bad deal, if it goes up or stays the same then it was money well spent/invested. Mind you ASC have fantastic ROIC of 18 on average over the past 10 years, 15 TTM. For comparison, Facebook has ROIC of 13 over the last 10 years.
With the fuel crisis I and many others I believe are switching to online as a preference. The market will catch onto that soon and we will surely get a boost!
@danl90 - Asos was trading around 4600 when they announced the topshop deal. Look where they are trading now.
I'm told the market is a forecasting animal..Well the market clearly don't rate that purchase...You'd have to say it was poor value for shareholders as they could rather have given us that in dividends...Instead we got nothing and are now trading at a much lower SP...
So money spent produced nothing for the shareholders...As always, we believe it will turn around. But as always when it does, then other stocks have moved up much further in the mean time...
Boohoo's results are due on Thursday...Usually Boohoo goes down but it's so far down, can it go down any further...It should take Asos with it which ever way it goes...
I guess we will then see what we might be able to expect from Asos, although Asos is usually much more downbeat on their expectations that Boohoo.
If it's good results, Asos might slowly tick up to the results...
M&A can fix these issues. Look how asos flew after the topshop deal
M&A forces people to re-align their thinking
Missguided is a part of asos's offering atm. Asos could enhance it's margin and make it exclusive to asos (so that it can x-sell face and body etc)
Also atm Missguided is very slow to US and international. Asos would turbo charge this
Come on asos get spending the cash
@Don: I get what you're saying. I don't disagree with most of your points.
In my opinion, the only people that don't care about fundamentals are day traders and idiots. Day traders don't care, becaue they're going to sell them within hours of buying. But most day traders lose money, so it's not something that I'm going to emulate. I'm a trader. I trade a lot, but I know that I could not be consistently profitable if I had to trade intra-day. I appreciate that some people can (maybe 5-10% of day traders) - good luck to them! If I could work out a good strategy, I'd be all over Cine and the rest of them.
It's always frustrating waiting for a share to move. Especially for ASOS and BOO. But I'm prepared to bet that it's going to eventually happen.
@CaneToad - What you say about Asos and Boohoo is all well and true.
But the broker consensus is not reflected...I'm in Asos and today I'm seeing travel stocks fly and Asos which has nearly a 100% upside is nowhere...
I made money on Boohoo a few times, but I remember how everyone was saying it will be 400 soon and then 450 and it's only ever gone down...
I parked my money here rather than travel stocks because I didn't want to speculate anymore, I want my money in profitable and growing companies that I feel is secure and I know won't go bust.
Ok, we can't know that for sure, but for all intends and purposes this stock won't go bust in the same way tomorrow the sun will come up again although off course the world may end today as anything is possible.
Perhaps all the money has just shifted away from lockdown stocks to travel stocks. And travel stocks is now all the rage and will be till that has run it's course.
It's a shame that in this day and age fundamentals don't matter anymore...Even Cine jumped today...If anyone look at their financials (Fundamentals) and compare 2017 to 2019 the they will understand why it is one of the most shorted stocks in the UK market.
Yet it is flying...And Asos and Boohoo the growing and hugely profitable companies with excellent fundamentals is going down. Ok, they did go up a lot during lockdown. So again, perhaps a rotation from growth to value stocks. But with their fundamentals I'd say they are value stocks as well.
So frustrating...The market is now a casino, that is just it..No one cares or looks at fundamentals anymore, QE and stimulus cheques has pumped so much money into the markets and every one is now trading. How many people that has never traded till before lockdown is now trading.
They don't care or look at fundamentals and find their tips on facebook.Equally Boohoo and Asos are both Aim stocks, Next and JD is on the FTSE100 so blue chip stocks...That does attract lots more private and institutional investors.
That is almost certainly also playing a part and why it is lagging this far behind broker consensus. Many won't invest in Aim stocks, it's more risky. I've been burnt on Aim stocks with directors that was involved in dodgy share transactions who just walked away as that market is not as tightly regulated and scrutinised.
Maybe Asos need to leave Aim behind...To show they are serious and going places. Maybe others will take them more serious then. Anyway, all speculation as to what is causing this stock to be so unloved i.e far below broker consensus.
Maybe it's just another online growth company on Aim...And all that matters is that the growth increases year on year. Doesn't matter if growth is 50%, if that is now down from say 60% before it goes down...
I don’t dispute the points on revenue growth. But for asos they can use M&A to further expand, drive traffic and force synergy
Missguided hits all of asos target market and is great internationally
It’s already huge on asos (1,800 sku as of today) so why risk this falling into hands of a competitor who might take it away? This is why asos paid for topshop. Topshop was a big chunk of revenue and asos couldn’t risk that slipping away
Why not grab Missguided rather than let it fall into JD?
I challenge you to name another company with this much upside when there are more than 20 brokers.
@dan: "Asos needs to release a proactive M&A strategy it can’t continue like it has"
Seriously. It would be very difficult to find a company growing revenue and profit faster than ASOS and BOOHOO. They're makign boat-loads of money. They're not expensive anymore.
There are 24 brokers for ASOS. The consensus target price is 80% above the current level.
JD bought Hairburst this morning. It’s a beauty brand which has 850k followers on insta and sold on asos (only small quantity) but again I think this highlights the risk asos is at from JD if people keep buying up suppliers
Asos needs to release a proactive M&A strategy it can’t continue like it has
I think asos should buy it
Would have been against it a while ago but don’t think asos can afford to let it fall into JD hands
Also Missguided is a rather cool brand and fits where AsYou is for asos
Needs more thought