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Might be the Stroud branch.
Price to Book 0.4
"A drowning man will clutch at anything"
Nothing wrong with being underwater, as long as you've got enough air to last as long as you'll need it.
nothing wrong with being a trolley boy, much better than being a gutter boy ?
I think he works at Sainsburys gathering the trolleys together although not sure which branch. Yesterday he didn't type anything for some reason.
With Vodafone bouncing about 1p off the bottom he will be pleased tonight.
A drowning man will clutch at anything
"VOD's goodwill however, who really knows what it contains. As a shareholder you can ring VOD IR and ask them, but I doubt they will tell you. "
The reasoning behind Goodwill is all laid out in the Annual reports; You don't need to ring the company, just read the annual reports.
"Accounting policies
Identifiable intangible assets are recognised when the Group controls the asset, it is probable that future economic benefits attributed to the asset will flow to the Group and the cost of the asset can be reliably measured. Identifiable intangible assets are recognised at fair value when the Group completes a business combination. The determination of the fair values of the separately identified intangibles, is based, to a considerable extent, on management’s judgement.
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition.
Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill is not subject to amortisation but is tested for impairment annually or whenever there is evidence that it may be impaired. Goodwill is denominated in the currency of the acquired entity and revalued to the closing exchange rate at each reporting period date. Negative goodwill arising on an acquisition is recognised directly in the income statement.
On disposal of a subsidiary or a joint arrangement, the attributable amount of goodwill is included in the determination of the profit or loss recognised in the income statement on disposal. Finite lived intangible assets Intangible assets with finite lives are stated at acquisition or development cost, less accumulated amortisation. The amortisation period and method is reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
Licence and spectrum fees
Amortisation periods for licence and spectrum fees are determined primarily by reference to the unexpired licence period, the conditions for licence renewal and whether licences are dependent on specific technologies.
Amortisation is charged to the income statement on a straightline basis over the estimated useful livesfrom the commencement of related network services.
The canvas of the mona lisa is a thing and has a value, as with the frame. The goodwill is how much extra you will pay for the painting. The purchase price minus the canvas and the frame.
That goodwill you can see has a value. A good chance to resell the painting and get it back. VOD's goodwill however, who really knows what it contains. As a shareholder you can ring VOD IR and ask them, but I doubt they will tell you. You can only guess it has some resale value, or is it all vapour linked to past purchases gone bad. Have they written everything off from India yet? will the new CEO kitchen sink with a goodwill write-down?
It is safer to do your calculations excluding goodwill, and intangibles, that you have no idea if they even exist.
https://www.telcotitans.com/telefonicawatch/spain-to-extend-telefonica-shield-as-macro-headwinds-build/5905.article
"The Spanish government is reportedly set to extend the strategic shield intended to protect critical infrastructure companies from foreign takeovers for a further year, potentially keeping it in place until the end of 2023. The move would continue to make any hostile attempt to acquire Telefónica unlikely to succeed as the Group considers its strategy for the coming three years."
The market is making predatory moves against the Telecom sector, it's pretty clear Telecom stocks are undervalued and potentially easy targets.
So have I. I would expect a divi cut with the new ceo (don't they all?), but there's plenty of value here.
DenFos
it is amusing that you feel some folks should sell now, whilst others should buy and cash in ..... hilarious
Any reason why some holders shouldnt ...hold ...and take the "cashing in" rather than give it to those potential buyers ??
" Obvious now that buyers at 1.20 or more have no option than to capitulate and realise their losses "
dont be daft..... once the Option contracts close and then the other side of the table has to buy..... anyone on a loss needs to just sit back and wait....let them feed at the trough for now....others will get their turn at a later date
Obvious now that buyers at 1.20 or more have no option than to capitulate and realise their losses. New buyers can start investing now and cash in….same with BT.
No company share price reflect NBV today in the market, IMO. Further, accounting numbers are artificially manipulated.
"Strip out Goodwill and it's like saying the Mona Lisa is only worth the price of the frame and you may as well throw away the canvas. "
--
lololol cracked me up and spot on mate.
"You can use either book value or net book value to base your investment decisions on - I was just explaining the different terms and how they are calculated :)"
Isn't the Net Asset value of €56.977 Billion with intangibles taken out anyway?
If you strip out Goodwill, then it doesn't reflect the value paid for the assets or the earnings potential of the assets. Strip out Goodwill and it's like saying the Mona Lisa is only worth the price of the frame and you may as well throw away the canvas. Valuing NAVPS at €0.13 is like shredding the earnings and only assigning value to the nuts and bolts, I wonder what Banksy would say about that lol.
You can use either book value or net book value to base your investment decisions on - I was just explaining the different terms and how they are calculated :)
"The results are complex and the accompanying statements are somewhat misleading, so it’s hardly a surprise there’s been a panic since they were released and Read was sacked. Tbh I would have sacked him just for presenting those results the way he did, never mind all the opportunities he failed to capitalise on this year."
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Which part is misleading? I stated the margins here on the collateral on the day of the release. The issue is that the market wants to hear what it wants to hear. Vod is no more leveraged than its peers. Happy to be proven wrong.
Read is an accountant and accountants typically don't make good CEO's and they are certainly no technical visionaries. Just look to Apple and Tim Cook. He is still thriving off the back of the great Jobs.
Sorry to say, but if an "investor" doesn't see value at these levels, then one is rather risk averse and there is nothing to explored here. Best to look into bonds.
By any fundamental measure, this company is a steal at the current price. IMO this will become quite obvious soon.
I have stated this multiple times in the past. UK is suffering from an extremely weak shareholder culture and the stocks are being punished for it. Both Orange and DT are partially owned by their respective governments and they will bring down vultures trying to spread rumours or to push weak hands out.
Had vod been an American company with similar fundamentals, it would have been trading at 2x the SP.
"Subtract the intangibles from the shareholder equity and divide by the shares in issue and that's where the 0.13 NAVPS (it's actually 0.136)"
But it's wrong, you can't subtract goodwill from the Net assets since it undervalues said assets and gives an incorrect valuation of the company. If you strip out goodwill, in the case of a Telecom company, then the figure is meaningless. Dividing Net Assets by shares in issue gives a more correct valuation per share of the assets.
Thanks Robleo and Android. Tbh when I started my analysis I was convinced VOD were stuffed and was expecting to work out a price target for entry much lower than current levels, but I surprised myself looking at the numbers in more detail. Don't get me wrong, this could plummet from here as fear has set in and it could go into an unwarranted death spiral like lots of other shares have in the past and later rebounded. Everyone seems to be pooing their pants about net debt rising and profits falling, but when you dig deeper at the moment it's not that bad.
I was convinced that they'd slash or stop the dividend, and whilst this still could be on the cards, I'm leaning towards it not happening. This is an income share, and if the div gets cut the SP will probably plummet. VOD financing arrangements are complex, and in part rely on the dividend and SP for things like the MCBs. Another slash in dividend and SP could really cause them problems with future financing. Short term they aren't anywhere near a liquidity crisis and can service their debt without cutting the dividend.
Similarly there's no way they are going to do a rights issue/placing/debt for equity swap based on the current financials and outlook. Only companies with severe cashflow issues do that, and VOD are very good at managing their liquidity.
Yes there are macro headwinds which could make things worse, but I think that fear is getting overdone at the moment. Much to my surprise the EU sorted out their potential energy deficit this winter which could have been catastrophic, and energy prices are tumbling. That could bring down headline inflation figures pretty swiftly in the next few months, and interest rate expectations are already slowing down.
VOD had quite a few exceptional costs and drags on cashflow in the last results, but underlying operating profit was actually higher. The spectrum payment of 1.7bn was a big hit on results that won't repeated in the next 6 months and those costs are set to taper off in the next year or two. If EUR/USD remains at current levels or higher, then there will also be a reduction in net debt in the next set of results due to the hedging/derivative positions. Results will probably going to be around the same steady eddy levels they've been at for a while, and not the slide into oblivion that's currently being priced in.
Anyway, I'd better get on with my proper work now. Was slightly trigger happy this morning and have a little bit of skin in the game now but a bigger order at 80p. GLA.
Book value includes goodwill and intangibles, whereas net book value doesn't.
Subtract the intangibles from the shareholder equity and divide by the shares in issue and that's where the 0.13 NAVPS (it's actually 0.136)
"LSE site defaults to the true meaning of net book so I took the figure from the fundamentals tab. You can see it at the bottom"
I'm not sure where they get their NAVPS of €0.13 from, but using their figures of:
Net Assets 56.977 Billion
Shares in Issue 27.410 Billion
56.977/27.410 = €2.078 Per Share
They probably need to look at the formula in their spreadsheet, since I get a NAVPS of €2.078 using their figures.
Hi Fleccy
LSE site defaults to the true meaning of net book so I took the figure from the fundamentals tab. You can see it at the bottom.
I did not bother to download the vod accounts yet again to check the figure there, but am sure it is correct from the last time I did it.
Bt down 3.5%
Coming.