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Seems to me that a profit warning unlikely anytime soon. If anything management will have been overly cautious on guidance because of previous mishaps. The move down today was probably triggered by the spike in US ten year yields. But these are unlikely to go higher than 5%, which is roughly where they were when the company refinanced the Eurobond at 4.75% last year. The Cosmens buying is good, you'd think they know what they are doing, and whilst they might be just averaging down like many of us, it's more likely that they either want to buy the company or stop it being bought by someone else on the cheap because they see real long term value. I'd be shocked if there was a capital raise with share price here and company easily paying interest payments with stable Investment Grade credit rating.
Move down in the Nasdaq and the first AI profit warning (Meta) is good for Mobico and stocks like it. Reduces Wealth Effect in US bringing us closer to rate cuts, and if Nasdaq trend continues down, good for "value" names like Mobico. Also oil price has been remarkably subdued, which is also good for inflation expectations.
This stock could triple over the next year or 2.
Why would company go bankrupt when they easily paying the interest on the debt? They said on the recent call (when asked towards the end) that US Sales process going as expected. So presumably that means its ok? They have reiterated guidance for the rest of the business outside of German rail which I think is only 4% of the revenues. The German rail thing, they think they will get something back from the German transport authority. Share price is lower than many years ago, but there are many more shares now so its not like for like. Wage inflation coming down. Interest rates coming down (or at least no longer going up). Fuel costs may have gone up recently but they are fine in historic terms. Company gradually bringing fares up across the board to catch up with the shock of labour shortagest and high pay settlements over last couple of years. My guess is that we will get a positive update on outlook and guidance later this month and a good update on US sales process. And pretty decent chance whole company will be taken out a decent premium from these levels... The negativity has got of control because of the price action, but hopefully the newsflow is about to turn positive...
I think that as soon as they put the North American business up for sale the whole company was effectively up for sale and it won't exist as a listed stock soon. The US will be sold to someone. And the rest will be bid for by Cosmos and maybe others... Management were very relaxed on the call today and this German rail thing is a kitchen sinking of bad news before results day. Hopefully the worm has now turned. Opinion only
I thought the call was good: 1) They've had to delay because of a change in something (some indicies) at the end of the week the likes of which hasn't happened since 2015 and was completely out of the blue and out of their control 2) They expect to get some back from the "PTA" (transport authority). The PTA are constructive on this. And there is precedent 3) The NA sale process is proceeding as expected and they'll be an update when they release earnings
I'm long with an average price of 108. Interest rate expectations have gone down as has inflation so I'm sticking with it. Hopefully fare prices will catch up with employee and fuel costs. Plus hopefully m&a will be a positive catalyst.
But, nonetheless, it was quite shocking that management guided down so soon after reiterating forecasts. It was also shocking that they suspended the dividend so soon after reintroducing it. They may have done this because they are now officially trying to sell the US school bus business and the whole composition of the balance sheet will change, but then they should have said this explicitly.
One reassuring thing is that the credit rating agencies have always kept the debt solidly at investment grade. We probably now need good news from the company to take the share price much higher. Fingers crossed.
Gewillia. I hear you. And very good points. But I'm concerned that the whole index tracking universe is now massively geared into the Magnificent 7. Same with lots of different kinds of ETFs. And lots of stocks Liontrust managers look at are undervalued. So that could be a massive and quite violent rotation at some time. Plus there is a big margin of safety here with the valuation.
Outflows. But exepected. Performance has been good i think, maybe that's a positive indicator for flows in the future
Good morning. Does anyone have a view here? Looks like a good trading update to me. And good that they've gone from net debt to net cash (I think) and good that they've extended the buyback
I bought this stock together with Jupiter after the Jupiter profit warning. My view being that the multiples are very low and so are the expectations. And this is a kind of geared play on recovery in UK markets which have underperformed so much... Would grateful for any colour from anyone. Bullish or bearish.
I bought this stock together with Jupiter after the Jupiter profit warning. My view being that the multiples are very low and so are the expectations. And this is a kind of geared play on recovery in UK markets which have underperformed so much... Would grateful for any colour from anyone. Bullish or bearish.
They are paying out 850 as dividend to be left with their events division which had ebitda of about 85 in the last 12 months. Maybe apply 15% discount to the 850 dividend (722) and value events business on very conservative 10x ebitda (850) and assume business will be left with £100mln of debt (?).... that would leave the mkt cap at very conservative £1.47bln... and it closed today with mkt cap of £1.18bln.... so on very very conservative basis that gives stock 25% upside.... and actually events business is likely takeover target now, which dould put it on 15x ebitda... maybe that gives it another 30% upside on top of this.
I'm surprised stock didn't close higher. But then mtk doesnt seem to price things for uk midcaps until deals actually complete. Plus this stock has been painful for holders, so maybe some just wanted to get out. Lots of nerves. Hopefully stock will go higher tomorrow once news has been digested more...
Maybe a combination of locked in contracts and trouble getting staff, plus poor management... Over the long run pricing and costs and margins should normalise... personally I think the interest rate move is done for now.. 5% on 10 years in the US. the oil price vulnerable to the downside here... but then I just sold the Mobico I bought yesterday for a trade at 59p !!! This is how the sentiment turns.
Increased bus use is the best way of reducing carbon emissions. That's why I've been happy to increase on the way down. And I've been shocked at the price action/lack of long term vision from institutions. I'm reassured by the fact that the debt is investment grade. But it was shocking that management suspended the dividend so soon after reintroducing it. And also shocking that they had a major profit warning so soon after reiterating guidance. Companies like Mobico should receive much greater gvt subsidies than electric cars do in my opinion. My average price is 108. A bit frozen now!
Https://www.thetimes.co.uk/article/sunaks-700m-on-the-buses-as-hs2-falters-wtvj5rdvp
"Sunak set to spend £700m on the buses as HS2 falters".
Depends on the cost of borrowing and the price of the shares. If you can borrow below 5%, then surely it's profitable to use some of that money to buy back shares if the dividend yield is 7%+
In the long this is good for the company, the equity is undervalued and there is huge growth potential. Buying back shares here means that the company is less likely to be picked off by Private Equity or corporate. And if the shares go higher than the company can issue more shares at a better level to fund growth when projects present.
Lots of short squeezes today. Maybe triggered by Future PLC trading statement. Future, Ascential, and of course Mobico. Lets hope this follows through.
Thanks both. Looks like a very cheap stock to me. I don't really get it. Hopefully rally will follow through.
Does anyone have a view about the trading update please?
Could Mobico use any of its recent borowings from the new bond to launch a buyback? Anyone have a view on this?
Buying back shares which are paying a 7/8% dividend yield from borowings of 4.875% would be smart.
Maybe NVDA earnings were last hurrah of big tech.
Time to search for non-cyclical deep value...
Not many investment grade companies which have dividend yields twice the rate of Government 10 years.