The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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tealo1 - 20% gain for an individual holding is neither here nor there - Nvidia (actually it is now my largest holding) was bought in 2018 at $216 per share - is doing nicely. For that matter, so are my shares in Adyen, and Varta and a dozen or so others. All have doubled in a couple of years. My portfolio is structured for growth and I will be disappointed if, this year I do not have uplift of 17% - 18%. Sure, there are a few losers this year already - Abcam for instance and plenty of turgid ones such as AFC, SAGA, Utilico, Deutsche Bourse etc.
Ramsdens has plenty going for it - cash rich, the watches and jewellery side are providing not just turnover, but are keeping the company alive. Division for precious scrap metal and pawnbroking will do well in a down turn, (but surprisingly, we are not there yet), FX (does well when conditions allow for travel) but talk of expanding into the South East is bold and at a tangent to core competence. I don't like that from the perspective of Rent, Rates, Staff and competition.
We have news to expect the lowering of restrictions (in England) in late July so it might mean the start of FX again. Once the furlough scheme ends and employers weigh up the prospects to re-open, I would expect to see unemployment begin to rise. That won't really happen until schools return in September. That MIGHT mean the beginnings of the pawnbroking side picking up. But these little things do not mean that shareholders in Ramsdens are going to get rich all of a sudden.
It does take time and rather than adding to my holding in RFX (because I know the risk), the reward is insufficient (at this stage to press the buy button. So, for ME, these are not a buy but there is an insufficient case to sell. I like to average my holding UP. And I will do this when there is sustained evidence that momentum will continue.
And for that, I will use the basic historic information in graphical format (chart) with the 5 year one as a guide.
My decision to buy was flawed by my impatience - I underestimated the amount of money that Governments would chuck at businesses for a far longer duration than I expected. Things that I believe I got right include that RFX is a well managed company, is cash rich and has revenues from different streams.
Dividends are a bonus as far as I am concerned. While the value of my holding is slightly underwater, this is magnified when opportunity cost is taken into account.
I added another 20% to my holding a few days ago. My average is now the same as the current SP. I’m intending to hold for many years all being well, return of the divi etc and continued SP growth. Im sure we’ll be at around £2.50 this time next year if not sooner.
Absolutely, gold price due to increase to about $2500 owing to QE and therefore inflation. Plus opening of additional shops for added growth.
The problem is the market is becoming that irrational, you now think 20% is not an attractive gain...
Ramsdens offers plenty of long term potential to return and improve on existing normal trading earnings. The net cash position is healthy, leaving the actual business on sale for a good price which I see a 50% upside within 3 years on return to healthy profits.
RFX is a good company, backed by a good management team - and one which offers a hedge against inflation & has good exposure to gold prices. If you are prepared to be patient to return to normal trading, there is good money to be made here with a good margin of safety.
Outstanding recovery stock. 20% gain over the next 12months?
I had watched RFX for a year or so before I started buying as a result of last years very sharp (and IMV temporary) collapse in the SP. During the previous four years they had more than doubled revenue and quadrupled income. It looks as though this is a well-managed , conservative ,but effective company in a number of growth niches, international travel will return , sadly pawnbroking will be highly profitable for the foreseeable future and the price of gold and jewellery is trending upwards. The company is also planning a controlled expansion . On that basis, and the assumption that this will return to something like the previous revenue levels , if not the same trajectory , I am assuming that for the year to Sep 2022 they will be reporting revenues of at least £70 mill and an income(well?)in excess of £6 mill, on a reasonable low double digit PE that would generate a rise in the MC (and hence SP) of 20/30/40%. that fits my profile and I will hold/accumulate at these prices.
The results simply reflect the past. The authority in the narrative to accompany them was muted. And, as a consequence I am not sure what to do.
I don’t care about intraday movement, but the forward guidence was expansion with defined geography, London and the S East as the focus….. and, I’ve got to be honest this does it really fizz me up. South East (as far as I am concerned is Berks/Bucks/ Surrey/Hants/Sussex/Kent etc…., all living in cloud cookoo land in terms of value : worth and it is a long way out from the core roots for Ramsdens.
My hunch is to sell. I’l give it 6 weeks before I hit the sell button, but the managers are not evidencing the subtle signals that warrant support. 3 months is the timescale I have in nind. If there is no PR stream of news weighted to improvement, then pastures new with the residue.
In my 40+ years in building a portfolio, it is rare that I buy fresh shares in a company in which I have held investment unless there is a change of management.