Member Info for Alessandro

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?

Mary your calculation is misleading. Top slicing doesn't average down.

Let's assume that after selling @170p and 'averaging down to 30p' the share price price actually crashes down to 30p. You would expect to have made a profit on the first sale and no loss on the second sale, hence making a net profit. In reality you would have made no profits at all. Your cash flow would be:

-£10,000 from your initial purchase

+£8,500 from your first sale (5,000 x 170p)

+ £1,500 from your second sale (5,000 x 30p)

Adding up all figures your will end up with no net profits, you started from £10,000 and ended with £10,000.

You can argue that if after the first sale @170p the share price falls less dramatically, to 60p. Would that make you a 2x bagger in any way? This is your cash flow again:

-£10,000 from your initial purchase

+£8,500 from your first sale (5,000 x 170p)

+ £3,000 from your second sale (5,000 x 60p)

This time adding up all figures your profit is £1,500 of hard money in your pocket. 15% of your initial sum.

The only way you can average down is by selling high and buying back in low. By doing so your average would not go down as dramatically as you would expect though. Making an X bagger on a share that actually doesn't rise manifold, but simply traded in and out is a mammoth task that hardly makes you a multi bagger.

@Mary

if you buy 10000 @ £1, sell 5000 @ 170p and you do not buy any more shares, your average would still be £1 per share. You would have an average of 74p if you use the full £8500 from the sale of your 5000 shares @ 170p to buy back in at £1 (if the shares drop that much after you sell!). I may be missing how the 30p figure is calculated.

Steve I wasn't right, you were not wrong. I believe it is not the short term price action to hold the answer. As far as I can tell the share price could be 100p or 200p tomorrow. It is matter of interpretation of the financial statement and confidence in the long term outlook for the company. OTB can still be a winner if it takes advantage of the current market and can get the upper hand over competitors. Hopefully we will both right when OTB can give solid figures over a number of terms.

@Mary how can your average be 40p considering the share price has never been close to that figure? I assume you bought in the low and sold in the high, virtually created your average by dividing your initial invested sum by the number of shares finally held. How many trades did you make to achieve 40p, can you give me an example of your strategy using OTB as an investment case? 40 p is very low considering the recent trading range (my calculation is between 120 and 145), it would take 5 trades with a 20% profit for each trade to get down to 40p, in a relative short period of time. I don't know many people that can make 20% profit per year let alone repeatedly in just few months. If you can replicate the same strategy with 5 holdings you can make one million starting from a mere £5000!

Onsolidground market manipulation is illegal.

I am interested in investing, I was hoping for better figures today. I am stunned people are so positive on the mediocre HY results (mediocre relative to the current valuation). I am surprised the price soared 15% yesterday also!

KittyKitty do you know better? you mentioned interest rates, I am adding the drop will be negligible.

KittyKitty - Interest rates won't drop significantly, 50bp at most in 2024. We wont be below 4% in less than 1.5 years and probably stay above 3% for a long time.

Mary, unfortunately brokers seem to be clueless most of the time. I can name countless shares of companies having broker ratings all over the shop. DB is no exception.

JMU I am not negative, I like OTB but I also look at the numbers. Look at statutory figures (at the bottom of the RNS doc) and tell me how impressed you are. Due to seasonality a large part of the earnings will be realized in H2. Administrative expenses need to come under control. Competition in the travel industry can be fierce. It is premature to be greedy.

Funny how, again, a line is given for gross profits before and after marketing... usual embellishment of figures!

Jed I agree, I would not be surprised to see it back to 1320-130p but I don't have a crystal ball, the earnings are erratic and investors will be cautious, that's the downward force. The earnings are not stellar to justify a much higher valuation, I invite people egging on 200-250p to give a rationale.

Jed I agree, I would not be surprised to see it back to

Jed I agree, I would not be surprised to see it back to

It is always stop losses triggered, market manipulation, tree shakes. Never the numbers.

Mary the buy opportunity of the week was yesterday morning and sell opportunity was yesterday close of trade. Today it is all about catching a falling knife, which few are fan of. It can go either direction in that game. Btw you must have bought for 40p if 200p represent a 5 bagger for you. By reading a few posts of yours on various boards I can infer you must be a millionaire by now.

Steve - look at the statutory figures: 80mln revenue, 59 mln gross profits, whooping 60mln administrative expenses. 1.5mln operating losses. 8mln ADJUSTED PBT (which is poor considering that the company is not even paying interest on any debt). Ant that is in an unusually active period for the travel business. On a full year basis I can estimate 16mln PBT. That's about right with current valuation. I don't get the hype. The market may overshoot today, I am curious to see what happens at the opening. I wish all holders to bank some good profits today. But I will stay away for now.

Donkeyeeyore you're surely right, there are lots of factors to consider and they are just as important as the accounts. If it was all about financial statements accountants would be the richest people.

Last week a few shares shoot up ahead of the TU/HF and FY results. Definitely there is a positive momentum in the market in this period. I can't wait to see what OTB will put out tomorrow.

Dan - Prospects for reliable (i.e., predictable) earnings. I don't like much the adjusted figures and we can't look far back in time as Covid screwed the records. Based on statutory, last FY PBT came in short of £13m. Assume OTB posts £26m PBT then I would expect a fair valuation of £500m. However, these days a PE of 20 is not so common on the LSE. Historically OTB has been overpriced, that's why the colossal fall. Don't expect previous highs any time soon.

The market is waiting to see what figures will OTB announce. If they are positive I am happy to jump in at a higher than today's valuation, I don't have much appetite for taking a gamble these days. If I get lucky I may even take advantage of a temporary drop. OTB tend to see advertising cost as a special item, which is not the case. Advertising in an essential and repeated cost, you don't retain a brand image without advertising. Btw, and that has nothing to do with my opinion on the stock, the advertising campaign is an eyesore. It chases away all people not particularly into the model of a chavvy family life. But apparently we have plenty of supply of chavs in the world, or OTB wouldn't be so cash rich/generative.

Lemonade OTB has to post about £20mln statutory PBT to justify the current valuation, even more for a higher valuation. If the travel industry can reassure that for the years to come it has the potential to perform as strongly as it did in the last 2 years, we could achieve a stable higher valuation. At the moment as Mary pointed out, it go either directions at the upcoming TU. I wish current holders for an upside, I will take a chance if an better entry point arises.