Member Info for AquarianAge

"Could be a Private Equity target"

I hope not and as a shareholder I would vote against any takeover advances. Despite current headwinds, I think PZC has a lot of growth potential - much more than a bigger company such as Unilever.

"It's far from Bankruptcy though."

I am not so sure about that. First Seagull are taking a very big risk and there is absolutely no guarentee that it will pay off. I imagine they don't have all their eggs in one basket.

I have noticed the wild swings in the share price over the last two trading days. This is still a very high risk investment.

I urge all new investors that do decide to invest here to please look at the company's latest financials and don't be swayed by the ocean of comments here.

My issue with this company is very simple: operating costs continue to be higher than gross profit. This is not sustainable and has already had a big impact on a company's liquidity. And it is because of this that Superdry have had to engage in some pretty onerous loan agreements like the one with Hilco Capital.

I will only consider this company investable again once operating costs are substantially reduced and it is making good net profits again. And once it has found a way to extricate itself out of the Hilco loan agreement. I do not like Hilco. I have said this already many times, but they a vulture organisation.

I fear that you may well be right 404x. Hilco are vultures, a dreadful company, and this is exactly the situation they want. They are betting on Superdry going into administration.

Group revenue down 23.5% from last year. However, this is not the biggest issue for me. For me, it's the inability of this company to keep it's operating costs down. Again, SGA expenses (£145.3m) exceed gross profit (£118.7m).

This is an excellent ETF to have exposure to the FTSE 250. Only my opinion, but I think the FTSE 250 will outperform the S&P 500 over the next 10 years. The S&P 500 is dangerously hot right now with a large chunk of its market cap concentrated in just 6-7 stocks. Even though the S&P 500 has a much bigger aggregate market cap than the FTSE 250, I would actually argue that it is currently more high risk.

Investors talk about how disappinting the performance of the FTSE has been over the last 20-25 years. Firstly, they are refering to the FTSE 100 index. It is true this index hasn't been punching above it's weight during this time period. However, its a different story for the FTSE250. Over the last 25 years the index has more than tripled in value.

I also think from a sentiment point of view the UK has almost hit rock bottom and there is every chance that this could all change at some point in the coming years.

This Vanguard 250 ETF has low fees (0.10% charge) and pays a 3.42% dividend paid quarterly.

"Last year Tesla went down to around 100, then went up to 300, it's down to around 200 now, these kind of price swings are normal for the high growth companies that SMT invest in. NVDA and ASML are flying high at the moment, but they too have similar price swings."

Such volatility is normal for growth companies with much more modest market caps. However, here we are talking about companies with market caps in the hundreds of billions of dollars. NVDA currently has a market cap of almost 1.5 trillion dollars! That's almost half of the UK's GDP!

"Superdry might not be "cool" anymore but it is still producing a lot of revenue every year. If they snip a few expenses then they can return to profitability."

You are correct that SDRY revenue levels are high, but as I already mentioned in a previous post, these high revenues don't matter when operating costs are higher than gross profit. And the problem is that it is not so easy for SDRY to substantially reduce those costs. It owns far too many stores and sadly I don't think SDRY is in a position where it can simply get rid of many of these stores. As Jimini pointed out, many of those stores have leases that SDRY cannot walk away from. And I am also guessing that some of these leases are very long. It's a tricky situation.

Shaun Wills owns a pitiful 10,812 shares (as of 15th January). At the current share price his holding is now less than £2k - not exactly a CFO with a lot of skin in the game!

Dunkerton on the other hand does have a huge holding. Last time I checked I believe he owns over 26 million shares?However, what surprises me is that his last purchase was back in May last year (I think at 78p or around that level). Why hasn't he bought more shares since? Even though he does have a substantial holding he also doesn't have all his eggs in one basket. He will still be a wealthy man if this when into administration.

There is certainly value and it does look cheap now. However, my question is how much potential growth does a company like Burberry have over the next 10-15 years? When I look at the share price chart over the last 12-13 years it's actually been pretty disappointing. For much of that period we had rock bottom interest rates and many growth shares, particularly in the US, did extremely well.

Current market cap of Burberry is now just under £4.8bn. For comparison, the US fashion company Capri Holdings currently has a market cap of just under $5.9bn (around £4.63bn), which is slighly less than the current Burberry market cap and that company owns some pretty big global luxary brands like Versace, Jimmy Choo and Michael Kors. So maybe Capri Holdings offers even better value?

The biggest fear and risk for me within the next 6 to 12 months is a highly dilutive equity restructuring to keep this a going concern. This is why buying shares now is highly risky despite the share price close to its all time low. Superdry generates high levels of revenue, but that means nothing when operating costs exceed gross profit. Why can't Superdry offload some of the many stores it has? That would bring opertating costs down substantially.

"In my view, It needs to go more premium, sell and offer less for more . Shut stores, keep the odd few in prime locations and go digital, premium."

Exactly this.

Many thanks anon3 for your helpful reply - that's much appreciated. Yes, I will check out those ETFs you mentioned.

"Declining industry listed on a terminally declining index. Buy quality US growth every time."

BATS doesn't have all its eggs in one basket. More of a concern for me is the amount of debt the company has. However, it's businesses still generate a lot of cash and are not affected by the economy.

I am very concerned by the current valuations of many popular US stocks. A very large portion of the total market cap of the S&P 500 is concentrated in just a small handful of stocks. Even if they are good quality companies, valuation always matters at the end of the day. And financial history proves this.

LLOL,

Just replying to your reply to my last post on here a couple of weeks back. I wasn't very clear with my 'margin of safety' point. Of course, I am speaking with hindsight here, but if SMT had hedged just 1% of it's portfolio (ie in options betting that interest rates would rise) back in 2020/21 it would have made a staggering amount of money on this hedge and this alone would have cushioned it from a lot of the losses in it's portfolio. I know one investment trust (Aurora) that had the foresight to do this and this alone protected it's portfolio during 2022. And with the money made from this hedge the managers were able to average down on some of it's holdings that took a beating during the crash. Most of the time such a 1% hedge ends up being worthless, but when the s**t hits the fan like it did back in 2022 then the gains from this hedge alone become out of this world. Protecting a portfolio worth many billions of pounds is important imho.

"If Superdry repeats the 148million losses of 2023 going into 2024..how many months does Superdry have before it is bankrupt? It is not closing stores and cash is low."

I keep mentioning in my posts how high operating costs are. It doesn't matter how great sales are if SGA costs alone exceed gross profit.

SDRY also doesn't need so many physical stores around the world. The overheads are enormous.

What I have trouble understanding is why has there been little effort made into putting more focus into it's online business? If your business is a brand you do not need to have so many physical stores - especially if they are eating into your profit margin. This is the issue here with Superdry.

Some businesses/brands have a thriving online business. If Superdry could get to the stage where at least 50% of it's revenue comes from online sales then watch those operating costs go down substantially.

I will most definitely be buying if the price drops below £2.

*modicum

Forest24 - I am not a negative person. I am simply posting facts and trying to bring a modium of honesty here. Not many people bother to read the financial statements

“Oh and I forget they’ve told the market they will deliver by April 24 a further £35m on cost savings boosting the 53% gross margin and cash flow. One to start accumulating now.”

If you look at the company’s latest income statement, you will see that against a gross profit of £328.4m, the company’s SGA (Selling, General and Administrative expenses) costs alone were £372.7m. 

I struggle to fathom how “£35m on cost savings” is going to cut it?

I see various posters today posting utter ramper dross and I fear that a lot of unsuspecting newbie investors/traders are going to fall for it and get burnt. 

This company still has serious issues and is not out of the woods. 

Please be careful