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Jed: Margin of safety is a value investing principle popularized by Seth Klarman and Warren Buffett1. It is the discounted price at which you buy a share in a company, and is calculated as the percentage difference between a company’s stock price and its actual cash flow value and assets1. Buffett has declared margin of safety one of his "cornerstones of investing" and has been known to apply as much as a 50% discount to the intrinsic value of a stock as his price target
Also, another thing from the presentation they gave.
Premium market is a big opportunity. If they can execute here as well then margins will be much higher than historical.
Sorry Alejandro,are you saying a buy in price of 50% off current price or worth 50% more than my suggested £1.80 ?
Jedclampit you are halfway through with your reasoning on entry price. According to Warren Buffet the market should undervalue the stock by 50% to give you a margin of safety.
I guess non of us really know what the true value /share price should be, based on the results etc and prospects I bet we all think this should be what £1.80 in the next 6 months when we also hear how well others like tui/ easy jet are doing.
Many including me keep thinking I should buy now as I did when it fell to £.150 ish then £1.34 ish but still haven't bought, I guess like many I am wanting it to fall to £1.25 ish first but we all know that at some stage maybe this week it could / will shoot up to £1.50 again. When is ever the right time to buy as we all get it wrong time and time again. !!
To make you all laugh!
I felt like a hero the day before results when I top sliced a third at 170 to hedge my bets...
As it fell on results day I was looking at what it might look like if I reinvested proceeds... Accidentally pressed confirm instead of cancel button on the ii platform and rebought at 153 - Idiot!!
You might be right and guess what that bolt could come from the new Thomas cook travel company as a buy out / takeover.
Now wouldn't that be a surprise !!!!
…that a “bolt from the blue” will take OTB much higher.
...that we bumble around the 130's maybe even dip into the 120's until w get any more news or TU's one way or the other.
Bottom drawer for a few months!
“ Positive summer demand is expected to deliver strong FY24 earnings growth”
https://www.lse.co.uk/rns/EZJ/half-year-report-ulkq5zb170iy218.html
Consensus in airlines is rest of year is going to be strong - same as OTB reiterated:
“we are confident of delivering our biggest summer ever."
This is a good post and just wanted to pick up on the Ryanair distribution agreement you pointed out. This is probably the single biggest positive news from the company in the past year or two and the market doesn’t seem to be factoring it in.
Ryanair account for c40-45% of OTB airline share with easyJet second at c25%. There is probably an interim solution being worked at atm and once technology like API feeds is sorted out there should be full access to Ryanair seat capacity and significant cost efficiencies and a much smoother customer proposition. This disagreement and litigation has been weighing on the shares for years and finally a great outcome.
I’ve read all the latest broker notes from shore, investec, numis etc and you can clearly see they are all focusing on this driving the growth story and derisking the company massively.
Mr Smith
Thanks for your post and take your point.
Caught a cold on PFC with huge short activity from pros and amateur investors alike.
Very sceptical of negative posts now.
I’ve read your posting history, you’re well placed to pick a winner which OTB is.
GRrrreat post Mr Lemon xxxxx
Steve, at the risk of seeming a pedant, short selling is not really an activity that retail investors (single bargains executed under £200,000) participate in. Plenty of retail investors take a very keen interest in not only the fundamental qualities that any equity has, but also use the myriad of tools to help guide them in their decision making process. While trying to time the market (for me) has never been successful, I do use very basic charts to give some endorsement to the research that I have undertaken.
That the share price has risen and fallen so much recently is by algorithmic transactions. When markets are volatile, the savvy retail investor keeps their powder dry and relies on their research UNTIL there is evidence for a revision of that research.
Weak argument Alessandro, I've gone in depth on the financials and OTB is indeed a cash machine.
- It's operating and free cash flows are significantly higher than it's profits every year.
- pre-2020 this was generating £15m-£20m in FCF every year. That's why analysts are calling it a cash machine.
- Admin expenses are up cause of inflation, once inflation/rates keeps going down then operating leverage will come back (as it already is in the results).
- OTB is not embellishing figures, it's not difficult to look at the numbers.. They are trying to show improving operating leverage (although it's obviously much worse than 2019 still due to inflation).
Competition is the only valid thing, if you believe competition from easyjet2, jet2, tui package holidays will become more fierce and take market share then OTB is valued roughly correct due to lower margins, if not (and imo it won't) then OTB is way undervalued. OTB provides a great service to customers.
Also, the new RyanAir partnership is being WAY undervalued by the market. This now means no more legal costs, customers are MUCH happier because ryanair allows OTB to scrape data and provide more add-ons, less customer service calls etc. So this alone will result in a larger revenue growth and margin expansion due to repeat bookings and less costs that wouldn't happen otherwise.
Bought more at this price. People on these boards are always so bearish when stock prices are down and bullish when they are all time highs, just lemmings.
It's a non-issue. CCH was generting no profits and even a loss, shutting down the high street portion is best imo
High street is dead and will continue to die for holiday booking.
I notice there is only 167m shares on issue , and this from the RNS as a caution note.
As a principal (rather than an agent), Classic accounts for revenue on a "travelled" basis and reports revenue on a gross basis.
The high street remains an extremely competitive market for B2B sales, which has contributed to a reduction in bookings of 6% on a travelled basis since the prior year. Despite the changes made in Q4 FY23 to centralise a number of group functions, costs to serve remain high. This has driven the need for a strategic review and conclusion that a simpler operating model is required to serve the B2B market.
For the purposes of IFRS 5, we expect CCH to be classified as discontinued operations during H2 24.
Agree BFD
LOTS of shorters posting, de-ramping
Never mind, it’ll come good soon
Sadly with the proportion of algo trades and uninvested posters trying to price anchor, this has the finger prints of a short all over it atm
YES Savage
OTB all the way for me too, my top pick in the travel sector, diversifying into long haul, asset / overheads light, debt free.
New investors will do well at this cheap pri
Jedclampit - TUI is up this morning because the big players are buying, post results this morning, to draw in the small fry PI's & give them a FOMO experience... Watch it drop like a stone later on today, tomorrow and into Friday too - IMO, DYOR - the results were better than On The Beach in terms of Revenue growth but TUI has a far bigger debt stack and the issues On the Beach noted in the 'Value' holiday range will no doubt be being felt by TUI too but on a far greater scale.
Jed I wouldn't be in any rush to buy tbh. 120s are almost a certainty at this point...
Has it hit the wall with this drop and will it go down to £1.25 before it goes up.
Today we have seen TUI doing well with SP up, IAG are going down so who knows where ONB will now go.
Want to buy but to hold a little longer and miss any rise or buy now and be caught in the fall to £1.25 ???
Alessandro
Mary is an angel sent from the “Gods”
I’ve followed her lead a number of times, Mary says jump I ask how high lol
Alessandro
Gives me a headache thinking it thru
Upto 15 buys ALWAYS on dips, sell one or some on spikes
Aiming for 2% plus costs and each buy / sell seen as a separate entity with NO profit/loss taken out.
Mary is playing with millions, it works !
Steve, the strategy will not make you as much as you may think.
To double your money need to buy and sell your FULL holding 4 times, each time buying back in at a 20% discount. Assume you have a stock that volatile you have to time it well to achieve such a feat.
If instead of buying and selling your full holding you top slice 50% of your holding and repeat in cycles it will take you 6-7 trades to double your money.
You must be able to time a very volatile stock multiple time without any setback. How many times we top slice too early and we are not able to back in cheap? How many times have we bought too early?