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Shorters paradise (should say).
All the acquisitions, many of which are bad and non profitable. Despite all the up talk in the final results facts are a net 1m loss. One of the acquisitions was heavily China centric now blocked from trading in China (that was good timing). Revenue is vanity and the products and area AWE are into is not state of the art also. I think it’s best watched and I wouldn’t be surprised this becomes a shortest paradise in the near future. (I followed in Sutarda and sold out at a loss due to the lack of honesty and transparency). Good luck to those still keeping the faith.
Thats a bull case from a trader's point of view lol.
If you're that certain about the future of the business long term then go ahead and double down next week.
Ollycoto21
Thanks for your interest.
I like to trade longer term and even though this blip today sees me 18p underwater, which a weaker person would panic and close the short, I'm happy to keep the position.
I won't reiterate my reasons as I've spouted them enough times but one swallow doesn't make a summer.
Private investors have been going knees deep yesterday and today to jump on the next perceived 10 timer.
Good luck to them.
Cheers
Barcap
Wow 130p now, flying this afti, unlucky barcap 🤪
Up 9% now and showing 123.3 to buy.
Burn baby burn :)
Barcap, would defo consider closing down that short at a small loss, unless you have balls of steel. You’ve been on the right side of every call so far, there’s gonna be one time when we actually go up.
To be fair i was expecting it to go right back down today, so raising another 1% or so ill take it ! be interesting to see how the sp moves once the american market opens fingers crossed a bit more of a push i have a 1.26 ave i need to get back to !
Hope the Nvidia provoked rise would not run out of steam so soon
Fair play Barcap, hope your short burns but fair play to post your position rather then claiming it afterwards. Hoping for £1.20 and a breakout on the back of Nvidia news, certainly alot of positivity in the sector currently. GL all
That last sentence was meant to read: AWE is also the most undervalued stock among its silicon IP peers.
Well done Barcap,
Stockopedia gives Alphawave Sucker Stock status with the following miserable scores out of 100; Stock Rank: 14 Quality: 25 Value: 34. It did however, until only very recently, have the maximum Growth ranking score of 100. For whatever peculiar reason this has now dropped to 97. It has an Earnings Manipulation Risk (M-Score) of High, a Health Trend (F-Score) of 2 out of 9 and therefore subsequently qualifies for two short selling screens (the Beineish M-Score and James Montier Unholy Trinity Screens).
Kuvari Partners increased their short position on 28th April by roughly 630,000 shares, and a further 630,000 shares on 23rd May for a total short position of 0.91% (6.4 million shares). They first crossed the 0.05% threshold with a 0.62% position back in November 2021 when it was around £1.80 and so is in healthy profit. It will be interesting to see when they eventually close them as a buyback of 6.4 million shares will take a bit of time without unduly affecting the price movement.
Bear in mind when going short based on short-selling screen selections for stocks that have already taken a beating like Alphawave who have only fairly recently listed with a large cash raise and invested the funds in acquisitions that are transformational for the business then those actions by default tend to trigger the negative financial indicators that makes them seem favourable for shorting.
The Financial Times Alphaville column (a fave among Pro shorters) did an article Friday 19th May, titled “Alphawave: omegawhoops” with subheading ‘Fabless, erroneous and semi detached.
Basically the article emphasizes all the negative changes between the prelims and audited results as well as highlighting the departure of the CFO. It does however finish off with a mildly positive broker note from JP Morgan:
“The new audited revenue is 11.4% ahead of what consensus was expecting when the results were due. The new audited Adj. EBITDA is 19.9% below what the consensus was expecting, with the audited margin of 25.3% below the expected 35.1% margin. The fact that the company had spent more was known at the last report; that the miss was much more is not positive, although the fact that the cash flow did not change in the audit is a positive. . . . [On the balance sheet] all the changes are non-cash so there is no change in the reported cash flow of the company, which we view as a key positive.”
Incidentally, the audited margin was in fact in line with what had been communicated at the Capital Markets Day presentation at 25%. The Q3 trading update had predicted amargin of 32 to 36% but this was before the Banias acquisition.
On a more positive note AWE qualifies for a R&D breakthrough screen selection based on quality factors related to how much a company is investing in its future development. SimplyWallSt give AWE a DCF fair value of £2.18 and a current average target price based on 3 analysts of £2.67. AWE is also the most underv
A lot of PIs buying so time to short aggressively IMHO
Yes Nvidia's revenue for data centres for the year was $15billion. Up 41% YOY.
And Automotive sector revenue almost $1 billion. Up 60% YOY.
Crucially these are the sectors that Alphawave's products supply to.
"Chief Executive Jensen Huang said accelerated computing and generative artificial intelligence is propelling two simultaneous transitions in the computer industry. "We are significantly increasing our supply to meet surging demand for them."
Incidentally, Alphawave Semi have recently introduced a new buzz marketing phrase in their communications: "Accelerating the Connected World". Accelerator chiplets form a key part of their product range.
On another note, if we break 120 I think I'll probably have to add. From a purely technical standpoint will indicate that his has legs. I have a full position already so would just be a trade tbh, hoping to ride a big move up and recover some of my losses.
Hi Blue Ruphus,
appreciate the response! What has everyone extremely excited was the guide for next quarter at nvidia, Expectations were for rev around 7b and they guided to over 11b. Not sure any company of this size has ever surprised to the upside so much. It's quite insane.
as you say I can't imagine this isn't good news for alphawave.
Olly,
I've not read the Nvidia report. Just saw the highlights a few minutes ago. First quarter revenue down 13% but data centre revenue up by 14%. Data centres being the main niche area for Alphawave as a specialist in connectivity especially high speed low power SerDes products.
Considering that organic growth (outside of China) for Alphawave was about 13% against a macroeconomic downtrend, I personally think Alphawave are very well. Remember that Alphawave also enjoyed highest ever quarterly bookings of $103 million, which by the way is absent of any Wisewave and Verisilicon bookings.
I'm holding back from adding for now as I want to see the dust settle on the debt ceiling fiasco.
Anyone that's more knowledgeable about the tech - is the nvidia report a good read-through for demand for alphawave's IP? Or the market just bidding up every high tech chip company rn?
Probably linked to the rise in Nvidia overnight.
Nvidia in US predicts massive increase in micro chips, because of A1..Very good results from that company today
No news that i can see anyone know why !?
RISC-V is only one string to AWE's bow ( that complements some of the others - chiplets, data shifting )
I thought this was a very good overview video that explained it's raison d'etre as an antidote required by the rest of the world to X86 and Arm CISA hegemony
https://www.youtube.com/watch?v=Ps0JFsyX2fU
There is a more recent update on the same channel.
You're a g for recognizing and accepting your error. IMO is a pretty substantial figure in terms of valuing the company.
This discussion probs reveals a lot of the reason why the market is not giving AWE any kind of benefit of doubt in the valuation; certain metrics seem arbitrary or convoluted. Definitely not the most transparent fo management, they seem to be set on painting a better picture than is actually the case.
I am still positive on the future prospects. Hopefully the original standalone IP business can pick up momentum again outside of China, and management are able to integrate open-five costs and personnel well. Banias labs will also be crucial, as pre-rev company don't have anything concrete to go off as of yet, will have to keep a close eye and see how things develop.
Hi Olly,
Having looked at the aggregation of revenues on pages 52 & 53, I must concede that you are absolutely correct that the non- WiseWave portion of organic growth is actually $6.7million. The 72% growth in non-China revenue includes the revenue generated by the acquisitions.
Noted that Synopsys and Cadence don’t have manufacturing aspects to their custom silicon.
I also get where you coming from regarding P/S value but the fact is the revenue has been generated so it has to be included. It’s effectively reduced in significance in the forward revenue P/S assessment.
Thank you for pointing out my error. This is greatly appreciated. It is I suppose a fair comment to say the organic growth of the non WiseWave revenue is a tad disappointing at around 13% growth. Still as the optimist, at least its some growth.
Love the back and forth here, very helpful for me.
Regarding WiseWave revenue, I think I made pretty compelling reasons as to why it shouldn't be counted and is of no economic benefit to the company or stakeholders to which you replied that you have 'never been counting WiseWave Revenue'?
Secondly, cadence and synopsys are of course involved in custom silicon, but not the actual delivery of that custom silicon. They have no manufacturing / production aspect, open-five does.
I'm not questioning the use of P/S just saying maybe make those few adjustments.
Regarding the non china organic rev I continue to disagree.
As you pointed out, early on in the report we are told WiseWave Revenue was $37.5m, however importantly this is "(excluding re-seller revenue)". It is referenced multiple times further throughout the report that total WiseWave revenue ("Joint Venture"), including the re-seller agreement, was $58.2m.
My initial calculations are in fact correct, new business brought in by Alphawave organically, outside of their 2 China agreements, was around $6m in 2022.
Please see section on "Disaggregation of Revenue" for a more detailed outline of the role WiseWave and Verisilicon play in the 2022 Rev numbers.