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Goldman Sachs says investors are underestimating the chance of a COVID-19 vaccine in 2020, an event that could push the S&P 500 11% higher:
https://markets.businessinsider.com/news/stocks/sp-500-jump-11-vaccine-developed-year-end-goldman-sachs-2020-8-1029477440
-Think positive sentiment like this could push this stock up
As a Gym Group user, since reopening I have observed the following.
The first 4 days the app didnt work at all, not a good start. The gyms I would say are about half to 2/3s as busy as pre-lockdown. The social distancing is well laid out, with ever other cardio machine out of use, and free weight and machines all 2m apart. Sanitizing stuff in several stations throughout the gym, and staff often cleaning the kit. Gym users also seem to be on the whole cleaning the kit after use.
I hold gym group shares as always thought it was a great company that I use 5 times a week, but I can see the share price not doing much for the foreseeable, and god forbid this stupid government closes them again all bets are off. I would say at best "hold", and sell at 180p buy at 75p.
Cheers munchbox54, I hope people that read my advice took it too
... well judging by the current share price
Yep - i've just bailed also. Mainly because if there's a second wave, gyms will not be popular. A lot of my friends that attend gyms have now just set up their "gym" at home. Personally, i've taken up boxing and running. My expectation is that membership numbers will have fallen further than what was previously reported. Why? it's to early for some people to return - who want's to touch dirty barbells/dumbells? Plus - the impact of higher re-opening costs (sanitizers, more staff, more monitoring, etc...).
Joe kenny.
Excellent post. You have nailed it and have the correct thinking with regards to this stock. This is going much lower .... if you can’t see it then good luck holding.
Yes I was expecting a bit of a bounce back... there hasn't been one which is a worry.
Yeah I bailed. I truly believed that there would be more than a 15 minute spike on Monday after the reopening weekend but this stock has much further to decline now, the decline will only worsen after the August interim. I would say that there's a potential to buy back late August but with membership potentially having declined further (something which accounts for this company's almost entire revenue) then it may not be worth it. Barclays hinted that if 86% members returned then GYM would break even, but if it dropped more than 5% below that then the shares' 'fair value' would decline by 30% and decline to a price of 45p if it were only 75%.
As said previously, people will return later in the year and if there are acquisitions in 2021/22 then this will be bullish again but until those signs bear fruit then I will remain on the sidelines.
Do you think it's worth bailing on these before its too late ?
I'm surprised too. But everything except metals are down lately
Thought the price would have spiked today after a busy weekend of reopening but guess not (well apart from the first 15 minutes this morning), the price will no doubt continue to slide and may worsen after the interim report so tempted to sell and buy back then. The company is definitely very lucrative in the long run- Barclays prediction of 400p by 2022 does not sound unrealistic at all considering all the potential room for acquisitions next year.
Any thoughts here would be great
Does
"Liberum Capital today reaffirms its buy investment rating on The Gym Group Plc (LON:GYM) and cut its price target to 255p (from 280p)."
Also think share price will shoot up Monday after a busy weekend, I believe.
All this in the media about people aren't going to go back to the gym is nonesense, even if a fifth did 'cancel' it was only because they didn't want to run the risk of being charged during lockdown, they'll very quickly re-subscribe. So many people have gained weight during lockdown and can't wait to get back to the gym, combined with the instagram culture among young people of having the perfect body- say it's going to be packed out over the coming weeks! (Think this defo has more positive sentiment than pubs and restaurant stocks at the moment, even if the price isn't showing it)
https://www.thetimes.co.uk/article/oversold-but-back-on-track-halfords-and-other-bargains-7dr0f5vnj?shareToken=ca2f4ccaf0efbafc8b0f81746052c945
Surely the way from here has to be north..
Yeah a good summary PP
I may wait until the interims in August and average down once the share price slides.
And Yuri - I'm not understanding your post TBH. It just came across as a bit ranty!
You do realize they have around 3p eps and negative salvageable equity / NAV
(because on a second-hand market assets would hardly go for half-price) ?
I mean you should be extremely optimistic about future prospect and highly risk taking personality (or marketing-affected) in order to invest in company with 3p eps vs 150p sp, really?
Even during pre-covid times it realistically should been priced at around 20p (costs grow faster vs revenue btw), but 15+ times above it? Seriously? What justifies it?
Covid made it even worse (with questionable prospects), now it should be priced practically at 10p..
PP. very good summary. Spot on fella
300p+ value was for a company with an aggressive growth plan - agree (or rather hope...!) returning customer and new sign-up numbers will be positive given all the rhetoric i.e. exercise and you’ll probably live longer(!), however I’d expect any deals not inked-in on new sites will be back to the drawing board to eek out more value / cut costs, which means they’ll be delayed. I think this is a good med/long-term hold, the short term I’m imagining to be a rise today, possibly 160p(?), plateau until 25th, more modest rise (maybe an RNS) on/after 25th when they ‘officially’ re-open, plateau again, then slide-back on the half-year with a material drop if the full-year plan is updated to incl. fewer new sites. Conversely, the UK commercial property market will be a fire sale over the next year at least, and i expect there are several smaller gym companies that have/will (on ending furlough) cease to exist, which may mean some quick/cheap acquisitions to help back-fill planed 2020 site numbers? Not sure if that’s ramping or deramping but either way I’m invested here - positives outweigh the negatives still in my mind, but north of 160p will be very tempting with the chance to buy-back in late august. DYOR of course!
I'm sure this was all pre prepared prior to last night's announcement. Still, its looks like a workable plan. Expect a bit of a bounce in the share price today...
Market looking for new customer numbers which will be significantly higher. The numbers won’t be pretty with any company. Can see big rise tomorrow and good momentum for next week
Interim results mid-late August wont be a pretty sight - sell on the rise after opening is my plan!
Read the crap written there about gym. Each point he made I said wrong. Wrong. Wrong
Fair points munch.
I very much like this company and I’m here for the long haul.
Bought at 286p unfortunately so a long way to go for me.
I will average down at some point though.
Was hoping private equity might make an offer in the long term
Echo. The damage of covid has been priced in. But let me tell you one thing..... the amount of people including new first timers waiting to join gym is insane. Look up a report .... google it and it says gym re opening searches trampled pub opening searches by 2000%. Yes2 thousand. Because people who didn’t go gym have put on weight and are ready to Join. I can see explosion of new people coming to gyms and that means more money for this Compsny.
Expect a 5-10% rise tomorrow here.
In the short term I can see a good upward trend due to the re-opening on July 25th
But will we have to wait until interims to see the damage that covid has done?
Happy to hear people’s views :-)
Gyms open from 25th July.
2 weeks time. Boom time for the sp. can see aggressive marketing will start to get customers doubled up.
Can see £1.80 by end of this month.