Well I would say it is very good news for VLG.
Works out at a minimum of £11 million per year for 15 years revenues. Now I know thats not profit, but that is about a 45% increase in revenues and could well be a lot more.
Even at the current price of 64p I would say this is still very cheap. VLG has a NAV of 39p, is cash rich, no debt and profit making. All they need to do is add a dividend by end of this F year. With no slip ups I can see this going to 3x the Nav, giving £1.20.
With the current pandemic, there are a lot less companies out there to invest in, so when you see one such as VLG breaking the trend, you stay on for the ride.
Agree. It was a very positive update as well as the broker update from Cenkos. I didn't really expect to see the low 20's hit as I suggested it might a while ago, but I certainly took advantage of it. This is one share worth holding for a while I believe.
People are running to the hills because of the virus. As bad as it is, it is not as bad as they make out. The virus is like a bad flu where the young old and weak are the ones who are dying but the everyday person recovers.
My alerts for different shares are buzzing away having a good 15 alerts set off. It is a bit like Christmas for me. Just have to decide which ones are going to buy and which not.
Bought in here today after my first alert buy was triggered.
As others have said, this is very much under valued. Whether it bounces or drops further who really knows but it was certainly a good sign Cavendish increasing their holdings.
This is the first page of a 35 page report.
Soaring with the grain – Initiating with Buy rating
Initiating with a Buy rating - We initiate on Woodbois with a buy rating and initial 12p target price but with further long-term upside. The Group has made a number of structural changes and investments in the past three years which are accelerating revenue and profit growth, positioning the Group strongly in a fragmented, multi-billion dollar global forestry and trading industry with a key focus on sustainability.
Executing on new strategy – Woodbois owns 20-50yr leases on ~1m acres of attractive forestry concessions in Gabon and Mozambique with accompanying processing facilities. Recently upgraded equipment can drive growth and margin improvements, while 25 years’ experience in timber trading and access to working capital underpin the expansion.
Multi-billion dollar global markets – African hardwood export markets are driven by strong demand from China and wealthy
developing and developed nations, underpinning at least a $350m revenue opportunity for Woodbois. Demand is economically sensitive, but African hardwoods are used for construction and furniture making providing growth much stronger than global GDP over time.
Supportive L-T themes – Population growth, urbanisation and middle class expansion all represent themes which Woodbois is aligned to, while commitment to sustainability and ethical practices positions the Group well in its industry - which should attract investors going forward.
Attractive growth profile – Our forecasts call for 45% revenue 5yr CAGR, 55% gross profit 5yr CAGR to 2023 with strong double digit growth in both Forestry and Trading divisions, and margin expansion driving positive EBITDA and EPS in 2020E and strong growth in 2021E. EBITDA reaches ~$16m in 2023 on our forecasts.
Valuation – The stock trades on 2.0x 2020E EV/Sales and 22.6x 2020E EV/EBITDA falling in 2021E on our forecasts to 1.2x EV/Sales, 7x EV/EBITDA and 9.9x P/E and with 100% upside to our target price, and significant longer term value. Recent investments in the Group’s operations should increasingly unlock value, in our view.
The group does not shrink from spending to change things. Last November BT maintained its hold on European football coverage, making a clean sweep of the rights packages to the UEFA Champions League, UEFA Europa League and UEFA Europa Conference League until 2024 in a £400m bid.
Meanwhile, we are still waiting for the results at the top line level of the previous rights acquisitions. But beyond this deal whose effects are beginning to be doubted, BT has to focus on its fibre network which has to be up to date technologically to seduce all British homes. In the end, it is by offering services that its competitors won’t be able to offer through cable or satellite (or with less quality) that BT will gain market share.
Openreach (the network division representing 20% of BT’s business) indeed aims to pass 4m premises with ultrafast FTTP technology by 2020/21, with an ambition to pass 15m premises by the mid-2020s. Network investment was £1,412m during
the first 9m, up 8% yoy. This reflects continued investment in BT’s Fibre Cities network build and the rollout of 5G.
So BT’s aim is to deliver the best converged network and be the leader in fixed ultrafast and mobile 5G networks (BT has already announced the first 16 UK cities for 5G investment). These investments are for the good cause (more than those in
football) and it is them that make Philip Jansen say : “I’m really excited about the long-term prospects for BT”. Well, one day it will end up paying but for the moment we are still waiting for a …revenue stabilisation.
For the first 9m BT’s free cash flow was indeed down £737m to £1,000m due to increased capex and the deposit for UEFA club football rights. We will probably revise our estimates and the dividend for 2020-23 downwards.
Expenses that still don't pay off
Earnings/sales releases - 30/01/2020
No real surprise with BT’s Q3 trading update but we get the feeling that recovery will not come into force soon.
The group remains highly discounted vs. its peers with in particular an 8.5% dividend yield which suggests however that the dividend may be lowered in the near future. For the first 9m BT’s free cash flow was indeed down £737m to £1,000m due to increased capex and the deposit for UEFA club football rights.
BT Q3 revenues were down by 3% yoy due primarily to headwinds from regulation. The EBITDA also decreased by 4% with the fall in revenue and investment in customer experience, including the commencement of copper to fibre migration. This sluggish performance (1% below H1 numbers) is slightly below expectations but globally corresponds to the poor outlook given by management 9 months ago.
As a reminder, management had given a poor outlook for 2019/20. Revenue should be down by 2% yoy, mainly as a result of the challenging market conditions, regulatory pressure in both fixed and mobile markets, and the ongoing impact from BT’s decision to de-emphasise lower margin products, particularly in the enterprise businesses. In parallel, adjusted EBITDA is expected to be in the range of £7.2-7.3bn, corresponding to a c.2% decrease.
Regarding the Enterprise and Global services segments (40% of BT’s business)
Q3 revenues decreased as expected by 6% to 10% yoy due to continued declines in traditional fixed voice usage (partly offset by growth in mobile revenue, in VoIP, WAN and Ethernet revenue) and the impact of divestments due to BT’s decision to reduce low margin business. Much more worrying is the fact that the EBITDA margin is not really improving, as if divestments were not paying off. So still no thinning on the horizon for these activities.
On the consumer side (40% of BT’s business) Q3 revenue was down by 2% yoy. Unlike southern European countries (like France, Spain or Italy) where there are no significant cable or satellite offers and where the telcos have a clear road ahead to dominate TV distribution, it is more difficult for BT to attract all British consumers to watch TV via its own fibre offer as serious competitors like Virgin and Sky have solid and loyal customer bases (and, for Virgin, an ultra-fast cable network that is better than some of BT’s fibre network which is not really an ultrafast one for the moment). On its own, BT has 13.3m retail fibre broadband customers but less than 2m homes are watching TV via its fibre network. This number has to be compared with the 4m watching TV via the ultra-fast network of Virgin. The current decline of homes watching TV via BT’s network is quite worrying.
I've turned bearish on this share now and sold out.
Looking very much over bought on the charts with the RSI and STOCH.
High PE of 55!
Debt of £105m is manageable but still high for a company that only makes £12m net profit a year.
EPS is forecast to drop over the next 2 years. I can not say I've noticed a share rise when the EPS is set to fall.
Still think it's a good company, just over priced now.
Good morning fellow investors.
Been really good read up on this company for me in the last week. The company does look massively under valued. But there is something that is tickling me that I can't quite say what it is but makes me feel something is not quite right. Well this is AIM after all.
I saw last week someone said the sp would be £30 by the end of the day so here is my wild stab in the dark. I've set an alert for 1750 for a possible first buy at around 1700. Whether it gets there, who really knows, but if it does I may do a small buy as there is still that rather large gap up to fill.
Given its popularity in the 2020 stock picking competition, Rockrose seems to be an open secret in the retail investing community. The group’s shares are up by more than 10% in the year to date. In such cases, it is worth revisiting some behavioural biases and emotional traps.
One behavioural bias is the fear of regret - a hindsight bias that can lead us to buy investments we wish they had purchased, which in turn fuels a trend-chasing effect. Just because Rockrose is a popular pick in a competition and its share price is going up, it does not mean it is an objectively good investment.
That said, another bias is anchoring, where an initial value - in this case the share price of c2,100p - is used as an “anchor” that people then adjust up or down to reflect new information. People tend to adjust their anchors insufficiently, however, meaning share prices can take a while to fully reflect a change in prospects.
On the face of it, it looks as though Rockrose’s shares are cheap even given recent reratings. The ranks show an attractive blend of value and momentum:
As such, it’s no surprise that the stock figures highly on the VM Rank screen and has a VM score of 97. With management signalling its appetite for further M&A, is the Rockrose share price just too cheap to ignore?