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Because his tone of voice is out of order. Anyway, I am out here. Have seen more than enough, the good stuff here is not worth it compared to the bad stuff. Nothing against bears, always welcome but the way how and what in terms of business knowhow is too low. Very daily traders focused. Ciao.
You are acting like a child making assumptions not being back by anything. How much do I have in Asos? When did I enter? How much % of my net wealth is that. You do not know. You do not know. I know one thing, timing the market is for losers. I am happy with my average and it only needs a bit of tweaking for me to make some ROI. BUt yes, risky.
When you read EBITDA replace it with BS....this was created by consultants and investment bankers in the 80 to justify higher valuations in the US. I look at FCF and the possible % that this reverts to the former/bit adjusted mean. Look it up for yourself. This whole thesis is about are they going to be able to stabilise and later on grow sales with higher operating % margins combined with better investment efficiencies in the company. Try building a business with 22 M customers with all the tanglibles and intangibles for this book value. Leadership knows they need to deliver very very soon...and regarding timing the market to get in. Good luck, that is a more risky strategy then my turnaround gamble here.
Your questions reveals your are a novice investor. Good luck.
OMG, getting so tired of these replies I made 9 bucks last week. I made 5 cents last hours up because of this or that. Will not tell you what I made last Q1 on my gold positions. Did i plan that for Q1, no way just a long term strategy since 2015. Some (like me) are in ASOS for the turnaround and possible rerate, if you do not believe in that thesis fine but using pro shorters as evidence that LTH are dead wrong is nonsense. Shorting Asos is a mostly algo driven thing and shorting is extremely difficult business. Your point regarding the FCF improvement of selling old stock is a valid and good one, but nothing new here under the sun. This is a high risk high reward bet at 3,6 pounds. You accept that and digest the noise or move on and take a loss. Have you ever turned around a business or are you a youngster with limited milage trying to be a smart ass here, I have and it always takes more time and pain as business is a complex adaptive system with a lot of uncertainties. Asos is not different so allocate your % that you can afford to lose.
What I understood from the annual report Jose has 326295 shares in outstanding shareoptions, and about 24 K bought. His salary is not that great (after tax) for running a 3 B business. So if he wants to become financial independent he needs to deliver. If he fails he not only loses the bonus but equally his reputation for being part of the team that created the mess and not being able to fix it as the ceo. So for me there is no doubt he is eager. That does not mean he is the most talented.
For me the glass is half full but yep i am a LTH here for the business thesis turnaround. A bid is not included in that one, could happen like also an escalation in a war between israel and iran can happen with a barrel at 130 USD en macro turns to .... again. How you or the market interprets the trading update is the name of the game. A lot of information is lacking, so I need to fall back on inductive reasoning and try to guess the odds. If you wait for a full proof of the recovery working you are left behind, that is why investing has an element of risk in it. For me one thing is clear, looking at charts and trying to predict the future is a much greater risk. Like a famous math guy once said many years ago, the mathematical expectation of the speculator is zero. Perhaps he is right, i do not know but what I do know is that if Jose and his team keep working like this and get a tailwind the upside to 10-12 is there for the taking. GLA and njoy your weekend. Long asos!
Taken in account where we come from pretty ok with update sofar but the call was too optimistic for my taste and analyst were very nice,.Asos needs to clean the house in an extremely difficult operating environment. Theoretically they are doing the right things but we need to see if it will work and bring them back to 4 B sales with net income of 3-4 % with a strong balance sheet and market leading company culture. It is still fragile but great to see debt down and FCF improving. Did they harvest the easy part of selling old stock? What will cleaning up the remaining old stock impact gross margins? Speed is not a differentiator in this business, several others can do it. A local londen influencer marketing campaign nice but they need to scale up faster. The others are. The new CFO came from Farfetch and must have seen there some painful things and learned from it and I hope he will become a strong partner for Jose (he is young and if he delivers here will be able to make himself financial free) , he has I guess a line directly with Frasers group where he works now. Next update is FY24 so long time, a lot can happen.I need more patience on this turnaround, Original thesis was to harvest end this year as I do not see this as a long term investment due to lack of moat, can still happen if this call is digested positively by some big buyers looking for bargain hunting on the cheap LSE and in general EU stocks markets. GLA, long asos.
Yes indeed you can smell the fear...good luck all tomorrow!
Agree, njoyed the trading call today and added. Long game compounding.
No offence but words are cheap, the trading statement did not convince me. I want evidence and positive facts soon. So 17th will be key for me. Now we are just speculating.
Jamess, I understand you are more technical chart driven. I am not, want to understand the business and do have some marketing skills but not really in fashion. The lack of progress on the site worries me, too slow. The financials are the easy part of Asos to understand in terms of risks, the difficulty is in the market and business dynamics and on top of that the battle of 3 mega shareholders with big ego's. So as I wrote, can leadership turn it around H2? If not, I am out and will take my loss soon as my opportunity costs are rising. Currently at 4,8 in the mix. Like Buffet said, turnarounds seldom work you better find a new boat. We are going to the finale with this stock, this can not go sideways for another 12-18 months.
From a marketing perspective this is a too narrow focus and you run the risk of being perceived as a political woke driven business, like all 20 something like rap and grime music. I also see a lack of smiles on the site. Rap might be a big group, no doubt, but to my opinion a difficult some what negative niche to built 4 billion sales on. Niche marketing is dangerous because if you miss the essence there is a big crater especially in fashion. They need to diversify the mix on the homepage imho and also improve the shopping experience, I see 2616 options for shirts....not good.
I do hope the FCF improvement is based on more then selling old stock and is also partly driven by the new business. Looking forward to the 17th. If Asos delivers on track I am happy as a LTH, if they are below guidance I would like to see the CEO resign. We should not forget that he was part of the team building 1 Billion stock, he has had enough time now to deliver minimum on track and hopefully a bit more.
Thanks for sharing your research, appreciate it Taser.
Just checking the asos site, i mainly see black models on the main page. I mean 81 % is not black in the UK or western europe. Why is this? Why not a representative mix of models that reflect the complete target group?
Hi Taser, I am new to this board. Just came across this business, what is the most important reason why this is beaten down so much? Macro does not explain it for me and fundamentals also not.
Fair enough, so you are a trader and not an investor. Works for the happy 4 %, the others lose. Even if you are among the 4 % it still does not reflect in your writing on a board like this. I shall for once be very arrogant here, I made many millions in investing via LTH, Turnarounds and private equity and follow this board to pick up even one piece of info that could help me in the turnaround thesis for ASOS but it is indeed a hard thing to do with all the noise here. I did read hundreds of books on investing but most of them suck, i majored in business economics and accounting from two universities, I did a top MBA and founded 2 companies. You know what Mike, the more I read and the more I listen the more I realise that we know nothing or little. Investing and trading is a never ending journey of art, science, selfknowledge and a lot of luck. I wish you all the best in your trading efforts and let us hope for those that are in it for the turnaround that we share info here that makes it worth staying on this board. There is already enough BS on the streets. GLA
Confidence is fine Mike but a lack of humbleness will get you to payday soon my friend. Asos is a risky bet but if you are investing in gold mines now you are just repeating the youtube talks of the day. I am long gold since 2019 but only as the ultimate airbag against fiat collapse. Mines are extremely risky to invest in for retail investors. For those who think that Shein will kill Asos take a look at the site, I see two different worlds that can co exits. A 20 something with some money in their pockets will buy combination of A brands and not a 14 USD dress that looks cheap. The problem for ASOS now is that they are in a kickbox match with one hand broken. It will depend on the quality of leadership if they can deliver and become fit again.
I mentioned this some days ago, please check the ROI of this analyst of his last 270 verdicts. I watch the ratings for one purpose only, once more start rerating you know your are in business. It is a good predictor of the psyche of the crowds under peer pressure. Sell ratings are down now to 5 from 8 since nov22.
Roberto , let me give your current valuation. 3 B with 3 % FCF a share is about 75 pence, if you get that in 2025 and onwards modest growth 4 % you are with 10 % wacc and a PER of 15-17 at 9-11 pounds easily. I rate this probability at 50 %, 30 % that we do better and 20 % we go down. Below 4 pounds this is a asymmetric bet hence why i think the elephants add shares and prepare for what is coming. I am leaving all the intangibles value out of the equation. My preferred thesis is running the turnaround but the 20 % is always in my mind.