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lol i attempted to not check the price until they release half year earnings on the 5th August, only lasted from wednesday until now .
FB, I think the two concerns you have in there about reopening retail and regulatory speculation are the main reasons wmh is trading at a around a 45% discount to the pre-covid price. These are legitimate known unknowns but the question is do they justify such a discount. My thoughts below.
1) reopening retail > this is a broader question about traditional retail and the UK high street in general. There is a market that have always gone to shops and will continue to do so. The market seems to be valuing wmh as a retail stock, look at a chart of wetherspoons Vs William hill, they look eerily similar. I don't think the damage is permanent and things will eventually recover to a new normal.
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2) Increased regulatory speculation in UK digital. Hills are massively exposed to the UK vs the rest.
It looks like this has a late 2021 timeframe. Something is going to happen, hard to know what will eventually be thrashed out here.
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3) Do they have enough cash to realise their US ambitions when you look at who they'll be competing against (Flutter, GVC etc).
I don't see this as an issue like the other two. Hills has been in the USA since 2012, the execution risk is reduced by the eldorado/ Caesars partnership and footholds. Setting up in Caesars locations will cost some money, but it is necessary spend. Are you talking marketing budget?
I agree the SP seems cheap but it seems like most on here are ignoring the risks 1) reopening retail > have customers moved online through lockdown? Will they come back?. Hills are massively exposed to retail vs the rest. 2) Increased regulatory speculation in UK digital. Hills are massively exposed to the UK vs the rest. 3) Do they have enough cash to realise their US ambitions when you look at who they'll be competing against (Flutter, GVC etc). So much risk. I think they can do it but it's not no brainer as some on here seem to be suggesting.
It is madness. When you think of current Caesars-Eldorado, strong indications that deal will pass other commissions as they’ve said to Caesars shareholders. That’ll mean a transfer of customers onto WH platform and access to prime location. Plus all that you have said above. The competition GVC are doing similar with BetMGM and they’re rising.
That’s really hard to do, how do you value any company from scratch? Every company has its net assets but what price do you place on a company’s global branding and ability to accept bets and people wagering on online casino games? What limitations on the share price do you place on the current Covid 19 situation?
888.com have net assets on their last annual accounts of £200m but have a market cap of £644m. That’s 3.25 times their net assets. WMH after the share placing have net assets of £500m, once the £200m VAT refund is received the net assets would be £700m. If WMH is valued at 3.25 * net assets = £2.2bn.
I can only value WMH based on how WMH has been valued in the past. We can see historic share price charts and WMH has been valued by the stock exchange at those levels. If WMH as a company was valued at £1.70 pre covid following annual accounts in Feb which was pre VAT refund, pre Caesers Eldorado merger, pre trading updates on how WMH has fared over these recent months, is it fair that WMH has dropped 55p per share? I don’t believe so. WMH are heading in the right direction focused on growth online and overseas. They are streamlining the company, looking to cut the cost of sales. The future looks very good. I will hold this long term as I have total confidence in WMH.
CJ how would you value the business at the moment? You think the current £1.2b is massively under? Can you use expected forward profits / debt levels to explain (not the SP was x so must now be worth y).
CJ most people on here will be checking every minute/hour of every working day (well I do) even when I’m up a ladder fitting downlights. Mainly people are looking for conformation biased. Not sure if you are invested elsewhere, but I look at my portfolio as a whole. One share goes down another goes up. IMO only invest in companies that you have researched and believe in. The share price is what people are willing to pay and I many cases do not reflect the real company value (positive or negative). I enjoy the up’s and down’s and wish I could do it full time. Anyway going to work and fit those new garage sockets. Have a good day.
I’m just wondering how often others invested in WMH check the share price. I have to say it makes me feel demoralised that we were up to 163p and now fallen to these levels for very little reason. I would like to just forget about this and come back in a years time and hopefully see us realise our true value. This isn’t a short term hold, it is realistically a long term hold now. But it’s like following a bet on a football match, I keep wanting to know what’s happening.
Is anyone here able to just switch off and hardly check the share price?