Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
A turnaround like this takes time and pain. I see ASOS as a roundabout investment approach, “one gains by losing first" and loses by gaining.” The first is for believers like me that in 2024/2025 todays actions will deliver (if thesis holds) and will make a great return justifying the risk today, the last is for the traders wanting a short cut enroute here who try to time the SP and are upset about every external thing that puts chaos in their believe systems. There are two camps here and I noticed that the traders add not much to this board and insult each other the most. Good luck to all and let us hope the work done in silence by the leadership team will make us happy in the future.
Thanks for this data. You see a similar momentum in Colruyt Belgium, they counter this with a strong growing private label with higher margins. I expect this more and more to happen at BME also. The A brands will always be cheaper in the mix at BME as this is their DNA (EDLP) just like at Costco and Walmart pass on the economies of scale to the consumer and grow volume to have leverage to the big guys producers. If they fail at this the thesis is changed, do not see this happening as long as current leadership runs the ship IMHO.
Bought some fevertree products in Dutch biggest supermarket chain. Price is 3,35 euro for 500 ml!!! Taste is personal but do not see this grasping a lot of marketshare in current pressured buying power isituation n these chains. Perhaps in clubs but not in regular supermarkets overhere.
Hear hear
Dear all, came across fever-tree in VIC database. Checked it out, looks like a great business in difficult times. A back on the envelop DCF gave me an intrinsic value of about 9-10 pounds. Just a starting point, please do not attach great meaning to it as my DD is just starting. To get me on the way, are there any publications I should look at worth reading? I have access to TIKR, Morningstart and SeekingAlpha and Simply Wallstreet. Product and brand look strong, what is wrong now. Is it mainly inflation and doubt about CAGR potential due to recession fear? How strong is the CEO and is the business in itself fundamentally having a moat? Many thanks upfront.
You pay divdends depending on the life cycle status of the company. The moment ASOS starts paying a dividend leadership is saying to you I have not ideas how the invest my left over FCF streams. This is far from the case today. If you want dividend investing I would avoid ASOS. They are in a turnaround situation, most of the turnarunds fail so risk is there. In the case of ASOS I am long myself but the ride is not easy, it will take time but if FCF starts running in again and board is going to do what they promise it will return in 2024/2025 to much higher levels but not with dividends. We might get stopped earlier if somebody makes an offer, this is not my preferred scenario but nobody knows. Although there are a lot op people here to claim they have a christall ball at their desk....
As long as they open new stores and execute this as they do it will go up coming year meanwhile paying dividends. This is a long term play like the US discount chains 10 years ago. The growth for discount retailing is above average in the coming decade for the squuezed middleclass looking for bargains offline. Ignore the short term analyst, focus at the longer term picture. Management is great, focus is great, growth plans are realistic. Let it compound and I accept days like this when Mr Market is doing its job.
I would read the book the end of accounting to understand why net asset value is of less and less related to companies market value. In the world of intangibles like patents, brands, churn ratio, customers life value, platform power the balance sheet is of less importance these days. Not saying you should not pay attention but Ben Graham does not work here at ASOS. Best is to watch FCF after you are convinced that default is not a serious risks. In general I am confident to state there is close to 0 edge in trying to built a thesis via annual reports and trading updates. Accounting is more or less the same as it was in 1902.
Simple is not easy. You will see this happening over and over again, living on debt is a western desease as people (both business and consumer) think that the be somebody you need to have stuff the moment you want it even they have not earned it yet. There is such a lack of grid these days. The traders talk here is an example, why take 20 cents profit trading if you can make tons just by waiting to see it unfold? Leverage in itself can be a good thing for a business if it enables growth that has sustainable compounding impact, or building something of value long term. Asos had learned now that stock management is one of the key drivers they need to master at a much higher level in a new game where money is not free anymore, in the end the laws of finance will work and companies who do not deliver ROIC > WACC will leave the stage once santa claus says enough is enough. I am confident ASOS will sell most of their excessive tock and turn it in cash, they will also rock the boat internally on topics like return costs, product brand optimalisation, country mix, marketing and sales and OPEX reduction. It will take time. Good luck to all.
And that is fine for those traders. In the end 95 % fail and make no real money meanwhile paying for the other 5 %. I am in the long boat of business analysis driven turnarounds and this made me financially free but have my share of losers also. Limited transactions costs three times on ASOS now and nice average. Just hold and let leadership and markets do its work, but is takes time and patience and boredom is what most can not handle. ASOS is a no brainer at 3-5 pounds but there is always risk, volatilty means nothing to me and is opportunity as long as risk of capital loss is limited. We should say thanks to the shorters, the clever money (those who built and run a business like MA) now is long. If summer sales is great P4 will make this jump. Macro clever talk is waste of your time, nobody knows.
I own both ASOS and BME. ASOS because it is a clear cyclical turnaround case at 4-5 pounds although operating in an extremely different business segment with a narrow/no moat. I was in too early but managed to average down but most likelt not a long term hold. My best case scenario will be to ride along the turnaround and see what it brings in terms of SP. If things go better and better we will see FOMO soon inc rerating You can not speculate on take overs, that is pure gambling. If leadership mean revers the business we will be back in business soon and I hope to harvest in 2024, but nobody knows. Selling it at the right time will be the most difficult decision here. Regarding BME this is a long term compounder and will not be sold, management is state of the art. Tailwind of squezed middleclass UK will only grow as expansion to France will be doubling the results in 5 years also because of scaling and private label margins growing. Meanwhile collecting the dividends. Their focus on offline only is also strong in combination with stock management.
If two dogs fight over a bone, the third runs with it
Just finished reading the RNS, the style of writing and transparency is great. ASOS remains to me a great bet on a turnaround that will deliver in 2024/2025. If they do those who got in these days will be rewarded. Let us hope summer is great and they will clear even more stock, get ride of the maniacs returning 90 % of purchases and strenghen internal confidence and innovation. The outcome will take care of itself if the business process works. It will even become better if we see FOMO the other way around.
Tailwinds ofcourse.....
Fully agree GGG! Yesterday a big chinese supplier of BTC and BTB ink and toner cartridges (nr 4 in the world and the biggest supplier of most western webshops for ink, this is billions of business) was banned from import by the US. This Chinese company bought Lexmark several years ago. They are banned from the US because of forced labour by uighurs according to the press release. Ofcourse they deny. In fashion these things can also happen out of the blue. Not saying it will but headwinds are there for western online players who take ESG serious compared to Chinese players who do not care about these things in practice.
The price will follow the business, not the other way around. So much daytraders here trying to time the market, most will fail and lose. Looking at the SP all day is like a casino forcing you to play and take your money. The big money here is with patience and trust in the turnaround . ASOS was 8 B MCAP in march 21, now close to 400 MCAP today. Net worth of ASOS is no doubt higher IMHO. Just check the balance sheet, even if they sell stock with 50 % loss + Sell all the infrastructure and goodwill of topshop it will be worth much more. If board fails to deliver H2 they are out and they know it, then we move on to the next phase. If they deliver and we have some luck along the way it will become FCF positive again and business will be rerated parabolic.
I thought fora like these are to inform each other about relevant topics on the business to learn and share and improve. Who cares about your average price? What values does a comment like this add. It is 100 % noise. And I am not writing this because my average is higher but I get so tired of this. We need a moderator on this board. It is pathetic what people post out here!!
Love the CEO. Visited myself several shops in UK and France, live in another country but now discount retailing very well. When they became an essential store in C19 period all went up, mr market being crazy. Then we got the headwinds talks, most of them correct and finally got in as it was clear it would go up soon again. Thesis is simple, middleclass will be squuezed more and more in this decade and will find their way to the stores. Execution is best in class, growth of 30-40 stores is manageble. I am in it for the long run, a CEO visiting 25 shops in a week and the MD total 200 is all I need to know. I did not even check the numbers for more then 15 min, growth is there and I will let this thing compound.
Well said. Thank you.