Member Info for bazzatuk

This is why a few weeks ago I said real value had to be known before buying in. The spread alone completely trashed any margin of error.

I had a suspicion this was overvalued at 50p. But that trading update is awful, so I think this has got much further to fall.

A new IPO with THIS update will end momentum and trust in this company until they provide a trading update offering confidence. But it sounds a right mess now, so seriously doubtful that's going to happen.

You'll continually find people talking about day trading being the only way to make money on shares, fundamentals don't matter and long term investing is over.

I only invest in companies I plan to hold for a minimum of 12 months. At that point I check the story, the fundamentals, the growth and evaluate if the reasons I invested still hold up.

I totally agree. This looks like a great company, with great potential, which is why it's ended up on my radar.

I understand, but I can join the train when things are stable, real value can be calculated, and still get a great return without a 7-8% instant loss by buying in now.

Growth doesn't have to mean huge risks.

The disposals you've listed, Zavvi was already sold off want it?

So you're looking at this as an asset play, rather than a going concern business?

What makes you think 300m is absurd?

When you lose 5-7% on the spread that is indeed robbery. This will remain on the watchlist until earnings warrant the valuation and that spread calms down.

Haha!! 😀 that's OK then... what's 1p between friends!

For all my scepticism, I do think this should ultimately be able to move upwards once the overall "doom" clears from the market/economy.

I'm not assuming it's fair value is anything in particular. I'm just pointing out the metrics I suspect are contributing to the decline in price and why it's settled around the 80s. But also that £2 is a herculean uplift in value that doesn't seem reasonable with current market trends.

You realise how diluted this share is? 5.1bn shares in issue?

There's some here thinking this will be £2 a share by year end. That's 6bn of extra investment to move that far. Even 150p was overpriced once growth started to stall.

It's going to take extremely positive news for retail, sports, the USA and tariffs, Nike, inflation etc. before this starts to seriously move.

But as always, you go with what you feel about a share. I feel there's reasons for the low price, you guys don't.

But I want to be wrong, because somewhere, at some point, I think the clouds will disappear and this will travel in the right direction. But right now, there's better investments available. Although, it's a bit slim pickings overall with all the daily gloom.

I grew up in the home town of JD back then, I saw their original store. I'm aware of their story. I also supplied their much of their original computer equipment back in the late 90s.

But there's a ton of people baffled at the fall in price for this share, when it's quite clear from the things I've outlined.

Should any of those things change, the price will rise. For now, it sits exactly where I expect it to be.

This would need 2bn in market cap to move the needle where you guys want it to be. That's a LOT of investment, and with uncertainties on the horizon, lowering ROIC, increased debt and that goodwill figure, it's going to take a ton of momentum to move it long term, and only a huge increase in earnings is going to do that.

A few weeks ago I posted here that JD was priced about right in the 80s for all the uncertainty. Lots of you didn't agree, but that's where the market sees it currently.

The USA expansion hasn't yet proven itself in earnings and with the tariff uncertainties i think that's going to hold the price back.

But there's a few metrics that are probably keeping this off many radars or buy lists.

ROIC has been dipping, while debt has increased, and goodwill was about 1/3 of shareholder equity on previous reports. Profits have also been uneven for a few years.

In terms of outright value, JD Sports is very likely going to improve as the UK and USA economies grow. But when will that be?

If this were to dip to 60p again it would indeed seem extremely cheap, but until I see more positive signs that discretionary spending is improving at retail, it will remain on my watch list.

But this is why investing is fun and worrying in equal amounts. Half is rational fundamentals, the rest is pure speculation, but ultimately, good business will always prove itself in the end.

"The Stock Market Is a Device for Transferring Money From the Impatient to the Patient."

The USA is our single biggest export destination. Just shy of 200bn a year, around a quarter of all exports from the UK.

The USA is an extremely important market for the UK, both in goods and services.

Free cash flows actually increased, so DCF valuations won't decrease in-line with the market drop.

This line quoted below in the company report is interesting. Especially as it looks like gross profit actually increased.

"Highlighted items of £9.6m (2023/24: £7.3m) consist of the amortisation of acquired intangible assets of £8.4m (2023/24: £4.9m), one-off legal and other professional fees relating to acquisitions, integration and restructuring costs of £1.2m (2023/24: £2.4m)."

I don't currently hold Bloomsbury, but it's been on my watch list recently. The sell off does seem somewhat of an overreaction.

It does whatever you WANT it to. If you put in unreasonable assumptions, you'll get an unreasonable valuation.

So you bought in recently, when it dipped into the 60s range?

I'm not saying it's a terrible investment, I'm saying I can't see how you guys are so bullish with the number of unknowns associated with this.

I don't agree with your valuations while these risks persist.