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There’s thousands of influencers, and they can be sponsored by multiple brands at once. Boohoo can’t be unable to offer enough to ALL of them. 10 years ago Zoella was one in a million, now there’s one Zoella on every street nearly. And what I’m saying is that Boohoo can’t stop being trendy as long as they sponsor a number of these celebrities. That’s where the trendiness comes from. The celebrities don’t come to Boohoo, is the other way round.
obviously I have lost the ability to communicate.
I did not mean to infer they did it for free, simply that if boo stop being "trendy" they won't advertise their clothes. Clearly they do it for money right up until another fashionable brand new or old comes along and offers them more...Like I said they need each other right up until they don't. And that could happen any time and for a variety of reasons.
That's all I was saying..
And I don't even know why this contentious? Boo is fast FASHION, the definition of fashion is that it is a short term thing....
Boo's trick will be to sustain itself as continually fashionable. But the longer that goes on the harder it becomes.
But right now everything is ok I think
The celebrity endorsements are what makes Boohoo trendy. The celebrities are the ones who should be worried about falling out of favour, because then the Boohoo cash will go to the newest shiniest trendy celebrity instead.
Celebs is kind of tenuous.
Yeah there are people like molly may, they come off love island, of course they are going to accept cash from the likes of Boo. There are also the people with 5,000 followers who get £300 of vouchers to do 3 posts a month, they aren't going to stop.
I feel that this side is one of the least fragile, as everyone always looks at the big stars and not the small fish out there promoting to their mates.
Steve, "They pay them a shed ton, so don't see this going anywhere while the money is still flowing to them."
None of these celebs is that short of money plus if its just money then another brand could offer to pay them more... Its a symbiotic relationship. The celebs are trendy. Boo supply trendy clothes....once that relationship is broken, maybe Boo isn't the coolest cat in school, they will move on?
There is no evidence that this is about to happen but it strikes me as quite a fragile pillar of the boo business model.
Bricks, for goodness sake I did not remotely say that boo Should be valued at 80p!!!!! re read the thread where I came in. I keep banging on that Boo is a growth stock! All I was pointing out is that at some stage growth stocks stop being growth stocks and the PER will fall in line with that. As an example to show how highly valued Boo is at present I used Next as an example. Jeeze its hard work here.
And I'm not a grumpy sod, I was simply offering up a reason as to why boo seems to be flat over the last week or two in light of increasing evidence that any online stock is going mental.
We could have a discussion on the pros and cons, how long do we think it will last, what do we see as a realistic valuation on various growth scenario's, you know stuff that might have revealed some sort of an insight, who knows.
Except now all I know is that you don't think a growth stock can be valued in which case how do you know if boo is under or over valued?
@wydrum will disagree with you on this line,
"I also see that the business model is highly vulnerable to celeb endorsements, which is fine while you have them."
They pay them a shed ton, so don't see this going anywhere while the money is still flowing to them.
Will also add that you have got to remember, stocks are valued two years in the future, not current. The suggestion from Boohoo's directors is that they are going to grow the brands under their umbrella significantly over the next two years.
@bricks92 I generally value what you and wyndrum have said in the past and present.
Think this is one of those situations where you are going to have to agree to disagree, as you are both grumpy sods and I am always right :-)
@Steve, your better off being resourceful with your time and studying how to improve your investing/trading skills...
Nothing to be gained here, you got one bloke saying "all funds have sold out"...when institution ownership is still at 40%!
You got another bloke going on about P/Es and how Boo should be valued at 80p going off this haha, not to mention he couldn't grasp the concept off a sell off in the US the other week...
Good luck Steve, but the bullcr*p on this board is driving me mad now...not worth tuning in for...
CNTU, (choice name)…
At some point it will be relevant. It always is. A point that clearly I could not get across to bricks.
All companies are valued on their future earnings including growth stocks. The PER is far greater on them because they are going to have much faster earnings. At some stage the growth slows down and so does the PER rating. It realy is not that complicated. The tricky bit is the timing.
All growth stocks have an element of the "Emperors New Clothes" about them and while they continue to exceed expectations belief is suspended. (Why do you think Boo keeps saying "25% growth expected" when we all know it will close to double that?)
@cntu123 "all large institutions have sold out" - get your facts straight
you do realise bricks that i have given you every opportunity to flesh out your point of view and you have not answered a single question. You think the PER is too low what should it be, and why? Does boo have the same barriers to entry as other hi tech stock. what rate of growth do you expect from Boo over the next, I dunno 5 years?
I brought out to show the huge difference in valuations on 2 companies broadly in the same industry with good on line presence, the difference one being more established than the other. Is that likely Boo's ultimate destination?
(And I don't know why you think i was being hysterical in posing the questions by the way)
Don’t think comparative metrics or even projections matter when it comes to this stock - ever since this negative news re suppliers underpaid min wage etc all large institutions have sold out and not want to be involved with this stock especially with the increase in green and ethical investing etc. I do believe boohoo will smash forecasts etc but what we really need is a good report on the findings and the BOD to confirm this is not boohoos fault and it’s future processes which will mitigate things like this happening again - then all the big boys will come back on this stock
Now I think you realise how ridiculous your post was...hence diverting the point...anyways enjoy your day folks...
I'm banning myself from this Board till the 30th unless something substantial happens. Clearly a waste of time and nothing to be gained.
bricks, I am not denying that Boo is a growth stock and is likely to be so for a few years, all I am trying to get across is that at some stage the "growth" premium will diminish and the Sp will eventually I guess, turn into a "Next-like" company and become, as you say a value/income stock.
Tech stocks often have patents and high barriers to entry (or both) to support their high valuations, I don't see that in Boo, I also see that the business model is highly vulnerable to celeb endorsements, which is fine while you have them.
None of this right now concerns me, but I think these are reasons why the valuation is lower than you think it should be and why I think it is justifiable now, but nevertheless susceptible to a be rerated downwards sooner than clearly you think.
I'm not in that long but growth comps aren't limited to just tech. Can be anything, just rapidly expanding...which Boo is...
I think last results said 89% increase in revenue in US...thats just a drop in ocean...if Boo can get a strong foothold in the US, then anything is possible, anything...they certainly have the right celebs on board from mayweather to kardashians...
How is next different to boo??
Look at the 5yr SP, youl realise how...
Look at the growth forecasts/trading updates/broker targets each company gives yoy...
You comparing an established almost value/income stock to a growth stock, get real!
A more accurate comparison would be ASOS, oh look it has a PE of 93!
Bricks, don't worry about my trading career, (although that is nice of you),
What do you think Boo's likely growth will be over the next 12 years say? if it grows at 50% a year it would be ball park turnover of £100b. Do you think that likely?
This aint a tech stock and right now we are on the upward curve and we should all enjoy the ride but this is not going to be able to sustain tech stock-like valuations for ever (or even for a decade)
This is hysterical P/E of Next genuinely getting compared to Boo...
I cant even be bothered entertaining this, good luck with your trading/investing career...just to give you an analogy, amazon had a p/e of a 1000 In 2015...people who don't understand p/e would have not bought since p/e is 1000!...5yrs on share price has x6 lol.
P.s learn about P/E ratios first, how they differ on type of stock (growth or value) and the limitations they pose...enjoy.
Bricks: you said "Don't even know why I respond to these ridiculous posts tbh but I think when someone compares Next P/E to Boo, that says it all..."
how do you see NEXT different to Boo? (forget the PER and share price)
Hi bricks, I understand you have a different view point but the price earnings ratio is a widely held metric to value ALL companies, including growth stocks.
Why do you think Boo is "undervalued" what is it you see that the market does not, what should the PE be in your opinion?
(Also I don't agree with you analysis that the valuation of boo was not connected to the story. But I don't think we will end up agreeing on that.)
The shares halved not because of valuation or anything but because of allegations of slave labour...would do the same to any company...scope to even shut it down if criminal activities. Has nothing to do with valuation of comp...
Oh forgot to mention the lightening speed of which an abundant buyers knock it back up on each fall...if it was overvalued, would that happen?
Clearly the market see's Boo as a disrupter, a new way of doing things that will allow rapid gain of market share against its competition with a commensurate surge in profits. This type of company is normally a technology stock. The "problem" for boo, is its actually pretty low tech and its "barriers to entry" are limited. (That's not to say it is easy for a new company to take on or replace Boo, but there are already big brands out there that will be trying to mimic Boo's business model and have the funds to do it.) But as I say, easier said then done.
KK, share prices often, (always?) over reach themselves both in becoming overbought and oversold. So when they went up to 433p in a bit of a frenzy, a quick reassessment was made and they came off the top, but to be fair, not that much.
More pertinent I think, was the slavery story. One slip and the SP halved......
Lets assume now that that is yesterdays news and no longer relevant. But the dramatic fall will have reminded many investors of the huge premium on the stock and how vunerable the SP is to unforeseen news.
I think the update will show a huge surge in sales, not just like for like but the recent new brands making more of a contribution, the Middle East market access and growth in the US, as well as rumours or even confirmation of new brand acquisitions, so I see 450p ish as a realistic goal on the day or within a week or so as it sinks in. (I think had there been no slavery story, the shares would already be close to that 500p mark but as I said up top, I think the premium has for now, had to be reined back as the risk appetite may now be not quite as it was then.
Further knock into perspective for you
Tesla P/E = 1136
Zoom P/E = 521
Etsy P/E = 91
NVDA P/E = 91...
Whilst Boo has a P/E off 59.
High P/Es characteristic of growth companies, if anything i see Boo as undervalued...
Oh and not to mention Boo actually has a P/E hence profitable...theres a plethora of growth stocks out there with multi billion dollar valuations and not turned over a single profit i.e PTON, FSLY...I could go on forever...
Don't even know why I respond to these ridiculous posts tbh but I think when someone compares Next P/E to Boo, that says it all...
All of your insights are very useful & helpful