If you would like to ask our webinar guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund a question please submit them here.
I did not say that BGEO was not good value
Just saying that there are other very good value banks out there and BGEO has become relatively expensive when compared to these other banks
For example both BGEO and Halyk have about 35% of their domestic markets
But the Kazakhstan GDP is about 8x the size of the Georgia GDP
And yet the Halyk market cap is less than 2x the BGEO market cap
And the forecast PE is less than 3
Or if you are looking at only UK banks, STB is on a forecast PE of less than 3 and a price to book of less than 0.4
BGEO has a price to book now of 1.4
A forum is a place for all views so no need for anyone to get upset if there is an occasional alternative view
Some people give far too much importance to shorts
So some people are short 2% of the Market Cap
So what? That means 98% of the Market Cap is long
Shorts have no special knowledge and they largely play on the fear of other investors
When Playtech has already had a bid of £1.56 rejected by 888 for being far too low, and when Draftkings has also discussed a takeover of 888 at probably a far higher share for share price, it is fairly obvious that 888 will not remain independent for very much longer.
The forecast eps is also 25p and so even if a bid did not happen for 888 the shares are still extremely undervalued
Various articles from last year suggest that the expected IPO for WD would have been at a minimum price of about €6 Billion or £5 Billion and a maximum of about €10 Billion
So adding this minimum IPO valuation to the current HBR Market Cap gives a total Market Cap of about £7 Billion
This would suggest a minimum share price for HBR after the deal of over £4
https://www.reuters.com/business/energy/basf-shareholders-say-russia-exit-sets-up-oil-gas-ipo-2023-01-19/
https://investingintheweb.com/blog/wintershall-dea-ipo/
Stevo
This is very disappointing as your target price for HBR has now fallen from about £7 to about £1.70 in a few short weeks
I hope that not too many people invested in HBR at much higher share prices than today after reading your early analysis of the deal and £7 target price
I think Bank of America still have a £4.60 target price for HBR so it is difficult to understand why their target price is more than double your target price
Also difficult to understand how a mid size Norway player like Var Energy with about 250k daily production has a Market Cap of about £6 Billion, but HBR with 500k daily production will have a Market Cap of less than £3 Billion !
Stevo
You seem to have completely changed your opinion now on HBR
You said previously that HBR would eventually look like Aker BP which has a Market Cap of about £12 Billion
This would mean a share price of about £7 for HBR
So what is your view now on HBR ?
Do you still think that it will go to £7 or is it no longer a very strong BUY ?
I think HBR is good value but I prefer Var Energy with a very good dividend yield of 13%
Nothing stupid about £8
That is 2x Revenue for 888 and that is what Kindred was recently sold for
Do you think Flutter is stupidly valued on a PE of 100 ?
Or is Draftkings overvalued on a PE of 1000 ?
The forecast PE for 888 is only 3
A bid of only £1.50 will just be rejected again, as will a bid of £2
Any bid over £2.50 will likely be accepted, but £2.50 will still undervalue the company by a significant amount
When Playtech has already had a bid of £1.56 rejected by 888 for being far too low, and when Draftkings has also discussed a takeover of 888 at probably a far higher share for share price, it is fairly obvious that 888 will not remain independent for very much longer.
The only questions remaining really are will there be a bidding war involving multiple other players? and how much over £2 or £3 will Playtech or Draftkings have to bid?
The gambling industry continues to consolidate every month and there are not too many prime targets such as 888 and William Hill left to buy.
Kindred was the most recent takeover bid at a takeover price of 2x Revenue.
If 888 was to be taken over at a similar price then Playtech or Draftkings would have to pay about £8 per share.
Analysts at RBC Capital Markets have estimated the car financing problems, which have echoes of the payment protection insurance scandal, could cost Lloyds £2.5bn, more than any of its rivals
So the Lloyds liability may be more than 5x their estimate of £450 million and obviously CBG do not have any clue at present what their final liability will be
If it is anywhere near the worst estimates of £1 billion then it could easily lead to receivership and liquidation for CBG
Giving an estimate is not really going to change anything for CBG as nobody really has any clue at present what the final liability is going to be
For CBG the figure is somewhere between zero and £1 billion, and so what good will it do for them to give a best estimate when the higher figure could mean a highly dilutive rights issue for CBG at best, and receivership and liquidation at worst ?
100p will be the new floor for the share price here before the inevitable takeover bid at about £2.50 comes from either Playtech or Draftkings
And even without a bid there will be a gradual increase to £2.50 as the eps increases over the next 2 years
Market screener has a consensus forecast eps of 25p and this gives a share price of £2.50 assuming a market average PE of 10
When the dividend returns it will certainly be nothing like the previous levels near 70p which was not even covered by earnings
A dividend of 30p is probably the maximum
It is probably better for investors to just completely avoid oil companies that rely on the UK for their profits
The UK Government is only going to steal everything away from their shareholders
This is about the only thing that UK Gov does well
Stealing money away from ordinary UK taxpayers to give to their scam green projects and their scam net zero projects and their millions of migrants who get everything for free
Much better for investors to buy the big Norway oil companies such as Equinor, Aker BP, and Var Energy