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I still have this moving to 65 or below and have not been tempted to re-enter yet. I will become increasingly interested if we do hit 65
Oh well least it can only go down 66p
The last 66p took just 18 months
Wonder if MDV looks at the sp or just flicks her bean
What a shid day, I thought we was climbing out and now back down again 😂🤣
UT trade for nearly 47 million shares at under 66p! I wonder is that of any significance in terms of institutional investors dumping their shares? It's a bit worrying that it was priced at the day's low!
Garonne. The answer is probably no. Nothing to do with institutional investors dumping there shares, why would it? A bad finish today though, which is worrying, forget U.T's, they are meaningless, it is just an auction for miss matching of shares on s.e.t.s.
Yep and tomorrow we’ll be 2% plus down
Whatever the reason for such a big trade Daniel, I'm becoming increasingly concerned here. The SP is currently down 2.3% on the NASDAQ with no sign of a rebound. The CEO has a duty to at least try to avert such decimation of shareholder value but this does not appear to be happening. The Microsoft deal, whilst interesting, is a jam tomorrow story and has evidently done nothing for the current SP. The fact we haven't heard any rumours of a takeover at this historically low
valuation, is also a bit worrying. I for one would welcome that as things stand.
Has all the hallmarks of requiring a cash raise. Let us hope not
I used to think all those saying the price will hit the 60’s were talking nonsense. Clearly not. Who is to say that predicting the 50’s or even 40’s is foolish. There has to be a worry if all this “good” news fails to stop the slide. What happens if we get some bad news?
Big money use DCF models, and if you plug in the current EPS and zero growth, you get 45p.
I don't think big money has any confidence there is growth here, what with them shrinking the company deliberately.
Goronne. So what is the C.E.O. supposed to do? If you don't know, why say it? At least to be constructive.
"Has all the hallmarks of requiring a cash raise. Let us hope not"
What are the hallmarks of a cash raise Buglet?
I'm interested in your analysis causing you to draw that conclusion.
I meant, at least try to be constructive.
Mole_man, can you post the discounted cash flow figures returning the 45p figure?
Alphaspread get a base case of 108.58
https://www.alphaspread.com/security/lse/vod/dcf-valuation/base-case
Value investing get:
"DCF (Growth Exit 5Y) 156.58 - 512.01 269.98 309.6%
DCF (Growth Exit 10Y) 183.54 - 551.49 301.68 357.7%
DCF (EBITDA Exit 5Y) 138.43 - 292.47 198.73 201.5%
DCF (EBITDA Exit 10Y) 173.55 - 374.7 252.18 282.6%"
https://valueinvesting.io/VOD.L/valuation/intrinsic-value
Simplywallst get a fair value of 202p using a DCF model:
https://simplywall.st/stocks/gb/telecom/lse-vod/vodafone-group-shares/valuation
Also the DCF models use free cash flow, and those parts of the business they are disposing off are free cash flow decretive. So disposing of them theoretically creates more free cash flow.
Simple DCF to get you started can easily return 45p. You have to know what what figures are going in and what they are comparing against. If the investor feels there is no growth and you can get 11% in the S&P, then you need those low prices to make vod worthwhile against the alternative.
If you see negative growth here then the price to buy vod at falls considerably.
You can play with a simple one here, just to try to understand why big money is not piling in for a supposed 11% div.
http://www.moneychimp.com/articles/valuation/dcf.htm
What inputs you put in?
Adjusted EPS of 0.0945 (being the euro value / 1.2) with zero growth and 11% returns a SP of 87p.
"yep & tomorrow we will be 2% down" Don't give up your day job!
Last years eps included asset sales. That big money is going to be looking at ongoing business.
If you use a FCF per share figure instead, then from 23 accounts it was 4.6p. Put that in with zero growth and comparing it to sp long term average you get 45p
You put zero growth cause it can’t cope with negative. VOD FCF was down 22 to 23 and they are guiding lower again.
Just trying to shine light on what may be keeping big money away.
Real FCF is on page 25 of annual report.
The CFO at H1 analyst presentation :
" I also must say that I am very pleased with the strength of the balance sheet of Vodafone.
Actually, as I have been diving deep into it, it is actually quite remarkable.
Yes, we have of course significant net debt, but it is having a very long maturity, on average 11.7 years.
It has a very decent low interest rate attached to it, on average 2.5%.
Actually in the next 18 months we have very limited repayments that are coming up and over the next five years it is actually in total only €13 billion or so.
I am also comfortable with the round about 2.5x net debt to EBITDA ratio that we are currently showing.
When you then take a look at returns to shareholders, as Margherita has said, we will take our time to look at the optimal use of proceeds and the overall capital allocation framework when the sale of Spain has closed ( within H1 2024)
However, based on what I can see, obviously we are around about looking now for €3.3 billion in free cash flow for FY24.
We are on a positive track towards achieving that.
The CFO at H1 analyst presentation :
When I take a look in the second half year, we are actually by now almost entirely hedged, 94%, ( for energy costs) so we don’t have mechanisms to hedge further so I can be relatively precise in a sense that we will see H2 FY24 vs H1 FY24 a relief of €200 million roughly in terms of energy headwind that we will not face.
Mole_man the 2023 figure had a relatively high Spectrum cost, coming in at €2.467 Billion, which dragged the year FCF down. Vodafone's FCF figure is affected by many things.
The CFO at H1 analyst presentation :
For our next year, we are actually already around about 70% hedged from an energy perspective and we will see this ratio going up fairly soon to around about 80% already.
So, I would expect energy to become a tailwind in FY25 even though likely not yet fully returned to the levels of FY23.
In FY26 I then fully expect us to be back to levels let’s say perhaps slightly above what we saw in FY22.
Then of course the underlying growth that we are seeing in the business should translate into stronger EBITDA growth than what you have seen in H1.
4.8m / 1.8m buy trades just got through, is this a good sign