Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
*clearly
Well said O&W. That's spot on and cearly what is happening here. Directors purchases at these sizes don't foreshadow disappointing results. The CEO could have bought a lot less if he had concerns. Adding £260k in the brief window they had and the concert party owning 38% really adds to the upside view from these levels.
Some IIs still work on end of quarter window dressing/cleaning up positions. Take advantage.
A big reason is liquidity in small caps, in normal times there isn't enough to sell their holding without decimating a share price, however after a huge fall they have a justification for selling out.
More comical trading again here first thing
~50k shares sold causing a drop to 72-73
1 x 15k buy and it goes NT and I can sell my entire holding at 73p...
Incredibly illiquid both ways
I've seen it countless times: as soon as the seller is done, the shares take off.
What's puzzling is why institutions seem to consistently dump at the bottom, when they're supposed to be the professionals!
But for out purposes, all we need to know is that they do, and that it creates an opportunity.
What's the adjusted EBITDA loss got to do with ARR or Enterprise value? Nada.
The point being that if they stopped trying to grow (i.e. opening new operations in APAC) or were bought by a competitor as a bolt on, the EBITDA losses could be cut overnight. It's one of the key reasons that high % ARR SaaS companies command such heady valuations.
From the £30m placing RNS last summer;
"Use of proceeds
The net proceeds from the Fundraising, together with the Group's existing cash balances (which were £5.9 million as at 31 January 2021) will finance the strategic development plan over the next three years. This will primarily involve building on the progress made in and expanding the scale of the Group's existing operations in North America, the UK and mainland Europe and establishing operations within new territories, namely Asia Pacific and broader European expansion, as well as significantly expanding the Group's sales, marketing and product & development headcount. The Directors anticipate that the sales and marketing headcount will increase by 247 per cent. during 2022 and the product and development headcount will increase by 122 per cent. during 2022.
It is anticipated that, in the short-term, executing this accelerated growth strategy will result in significant cash outflows and the Group is likely to generate losses. The increase in scale of the Group's operations is expected, in the medium-term, to deliver operational efficiencies and strengthen the Group's competitive position, in turn helping to increase essensys' share of these growth markets."
So the market was fully aware of the increase in EBITDA losses & cash outflow...
The point is what is it about those figures that changed so much from the previous figures.
Today the EV sits at ~£17m with exit ARR of £20.3m, so it's now valued at 0.86x EV/Cal'22e exit ARR... utterly bizarre.
But isn't it making a loss of £7m ? (Adjusted EBITDA) figure given in the trading update.
Agree, I re-read the trading update again this morning and ended up buying more shares afterwards.
I've never seen such a crazy overreaction, for context the market had been expecting them to deliver £27.8m in revenue with -£6.3m adjusted EBITDA, they now expect £23.4m with -£6.8m adjusted EBITDA. So they missed top line by 16% but with a much lower miss on EBITDA and cash ahead of expectations. Essentially they couldn't deploy capital due to covid lockdowns closing offices, so revenue couldn't grow as fast as expected? A valid reason IMO, yet the share price gets annihilated by 70%?!
N4 Singer said the below in their October update;
"At 5.4x EV/Cal’22e exit ARR, valuation sits towards the lower end of the range for scalable SaaS players targeting similarly attractive opportunities (5x-10x)."
Today the EV sits at ~£17m with exit ARR of £20.3m, so it's now valued at 0.86x EV/Cal'22e exit ARR... utterly bizarre.
For what it's worth, the share price opened the day of the trading update at 187p which shows the impact that sellers such as Blackrock had.
If someone is going to come on here and talk about the share price going further down at least put some reasoning behind it. Yes there's been sellers, which is why the price has gone from 270p a month ago to where we are now. For what reason did this company drop by that much because I can't see it.
Hi guys, I’m a new shareholder here, the company looks good, lot of potential
Early sellers screwing themselves over - always good to see a lack of patience getting punished.
Thought the latest Essensys case study video with Industrius was really good; https://www.linkedin.com/posts/essensys_partnership-tenantexperience-flexibleoffice-ugcPost-6910588185513254913-hL7a/
Shows that this is a real company and not the usual AIM basket case, the current valuation reflects basket case IMO.
Blackrock been seller too
Volume remains notably high considering there are only 64m shares in issue and 25m are in the hands of the concert party + directors. It’s clear that the buyer & seller wanted to deal at 74/75 so the price was controlled & brought back down, once they’re done then it’ll go off like a rocket.
Haha first post insinuating a sell down. Yep, very analytical
Anything to post about the business and forced seller ( for their own reasons) ?
You're an incredibly arrogant sod, Hedgehog100. But thank you for your detailed personal opinion, anyway. I'll ignore your tone this time because I'm feeling my way with ESYS from scratch, as opposed to old timers like yourself.
And another one! What is this - dud posters gathering day?!
Canaccord's discretionary clients haven't sold any of those shares in the last few days: the last of them was five days ago, i.e. 17th. March, which was the day before the big ESYS directors shares buying was announced.
They're probably regretting selling now, so are more likely to be looking to rebuy.
About sixteen and a half million ESYS shares have been traded this month, out of 64 million ESYS shares in issue.
Which obviously would have been about half buys and half sells.
Some big selling, but big buyers who are happy to mop them up at this price.
And as we knew that institutional-sized blocks had been sold, that is not news.
There should be an announcement shortly of another institution buying.
It's a bit surprising that there's been no such buy announcement already, because it's obvious that an institution is buying.
But sometimes they like to delay an announcement for as long as possible if they're accumulating, using leeway in the rules, because they know that news that they're buying can work against them price-wise.
Canaccord has sold some 473k shares in the last few days, going below 14%. Will they stop there?
You mean you're just another dud AIM poster.
Plenty selling south of 77p Seems just another dud Aim share.
https://www.**********.co.uk/rns/announcement/d85f54ed-ee6c-4058-b84c-58c8ee2d67b5/
pretty big transactions going on for a company of this size
Director buys add significant confidence here and this certainly looks like its been way oversold with value to be had imo
more buys than sells now
Literally every trick in the book today.