Member Info for Doodoo1987

Can you imagine YouGov getting a bid to be acquired tomorrow? It will be so fun for the shorters.

If Plus500 gains a 2% share in the predictions market industry in the US, this will represent 40 million dollars at the end of 2026 and potentially 200 million dollars by the end of 2030. If this expands to all the countries where the company operates, I see another 100-200 million revenue on top of that. This is my rough estimation for a base case scenario. ChatGPT says that the industry will have a total volume of 1 trillion dollars by the end of 2030 and about 1% of it will be realised revenue for the companies like Plus500. Only for the US market, where they announced entry today. Now let's make a valuation with lots of assumptions. Please comment on the assumptions because from now on I will be just hypothesizing.

For this base case scenario, by the end of 2030 the company will make 1.15 billion dollars in revenue. I hypothesize that current Plus500 business will make 1% growth in revenue (this is my hypothesis since 2019 that I entered the stock and I believed that it will be 30.00 GBP by now, I was wrong it gave 50% more basically due the announcement about prediction markets) sending it to 800 million dollars and the predictions market revenue will be 350 million dollars. The CAGR growth for the predictions market revenue will be 50%. After the first four years I believe that the industry will become more mature, and the forward CAGR will become 10%. I also believe that the free cash flow margin there will be 25% instead of 45% on average that the traditional Plus500 business has. Now, the then free cash flow will be 450 million dollars. If they buy back 2% of the stocks on float, there will be 10% less shares roughly (63 million shares). So, after 2030 the company will be growing on average 6% if we weigh the growth of the traditional business and the predictions business. The company will also have circa 750 million net cash in the balance sheet for various reasons, that's another base assumption, they might have more. I say this because I will use enterprice value rather than market cap for the valuation. For the growth calculated above (6%) I will apply a (enterprise value)/(free cash flow) of 14 to the stock. This will send the enterprise value at 6.3 billion dollars, sending the market cap at 7.05 billion dollars. In pounds this is 5.16 billion pounds. With the 63 million stocks on float this is a target price of 81.90 GBP for the end of 2030. Not bad at all.

Thanks SeaTank,

Nice to have a range here. Even in the low range this is quite large. Let's see what the company says in February.

Someone bought big at the end of the day, this is now traded at 41.60 GBP. Wow I've 4x since I started buying in 2020. I can't understand how big is the latest announcement with regards to prediction markets, but remember, the core business makes a lot of money when VIX is high, the stock is negatively correllated to the VIX. These are catalysts for growth. The company is very well managed and its capital allocation is fantastic, however the current buybacks are not as effective as they were three years ago. I would love the price to stay lower and buyback aggresively. But I can't complain. I'm happy with them finding other ways to allocate the money now like strategic acquisitions that diversify the big up and downs that the stock had at the past. As I said before, I'm very curious to find how big is the latest announcement and the synergies with American betting companies.

No comments after this update? Weird. I think they are unstoppable. Their forward PE is in the low 20s and they have 25% growth yoy. I'm always superhappy with their product, funds move instantly in the markets I operate and I think that the stock should be respected more.

I remember when they shorted Darktrace. The price went down to 2.00 GBP, no less than a year and a half the company was sold to another business for 5.40 GBP per share. It was a similar report. Trustpilot has directors wih cojones, they will go out there in the wild and buy shares. I'm waiting for their reply soon.

The Chief Operating Officer just bought 33000 shares. That's huge insider buying.

Do we understand mathematically how low an 7.4 forward earnings multiple is? This assumes a negative earnings growth for years. The company has still ROIC over 15%. The reduction in this metric is attributable to the large acquisition last year, it will touch 20% in the forthcoming years. I'm listening to the annual report, they have developed LLMs and have engaged AI in the data collection. Qualitatively, this is fantastic. I've been a member of the panel at the past, this new thing provides totally different insights to brands. They made their first seven figure sale there, the company that bought the package is relatively small. This says a lot.

I love that alogirths have gone wrong all along with this stock. I'm reading the numbers five year ago. The revenue was 76.9 million pounds and the adjusted profit from operations is 11.4 million pounds. This means that the revenue has grown 5.05 times and the earnings have grown 5.32 times, while the stock has lost 72%!!! This is blasphemy, this is madness, This is Sparta! Where's the bathtub to buy everything I can? It is obvious in this report that the debt is not a problem at all. All the headwinds are behind. The lower the price the lower the risks.

The revenue growth of 16% is misleading, if we exlude the acquisition the revenue is up only 1%. Now, this company is priced as if it loses 5% of revenue every year, which is not true. I'm buying more, great opportunity. Free cash flow yield is more than 10% if you take a good look. I expect more insider buying and I would like to see buybacks at the new year.

If you have a look at the rate of the buybacks, they are buying back 110,000 shares per day since the announcement. If they continue like that, this will make a 6.5% return, which is pretty good for the EPS growth they show. Of course, we have to substract stock based compansation, this will decrease the yield to circ 5% but it is still high. Management believes that the growth of the business will continue undisrupted in the future and that the company is undervalued, thus these aggresive buybacks.

The next two tailwinds are the advertising revenue stream that Trustpilot can unlock (so far they are a solo data company, but they can definitely create a revenue stream there) and the decrease of the selling and administrative expenses. As far as I'm concerned, all sales are happening by agents at the moment. Some of them, are pretty small and they actually create loss for the business taking into account commissions, paying the agent, having an office for the agent etc. Once the company transitions from this model to an automated process of these sales, they will reduce costs very effectivelly. This might decrease the ARR, but will explode margins. I think Trustpilot is a misunderstood opportunity and the valuation is pretty good at the moment.

Dr. Martens stock just climbed above 1 GBP. Although there's no news other than the latest update, it seems that some people know more than the average Joe. This is a classical cyclical fashion stock, their brand is immaculate and they will find a way to return, it's only a matter of time. If the official numbers are good, we'll jump higher. If they're great, we're heading above 1.5 pounds after many years of lagging. This is nowhere near where it can go if they achive high single digits to low double digits growth for the medium term.

If I was them, I would start aggresive buybacks. The price is too low. The free cashflow yield is circa 8%, the dividend is circa 2% and the debt is very low. There's 6% yield that can be used for acquisitions and buybacks. Acquisitions have happened at the past and can flourish in the future. They can use these money for buybacks.

Lorenzo,

It's KriKri, ticker symbol KRI.AT. Also have a look at Jumbo (BELA.AT) and Athens International Airport (AIA.AT).

Lorenzo Lynch,

This can happen in many markets. I'm Greek, used to live in London, have now moved to Athens. Athenian real estate is obsurd at the moment. Old crappy houses are sold for yields of 3-3.5%. These houses are risky, they need to be renovated, there's a lack of good workers at the moment etc etc. On the flip side there are companies at the Athenian Stock Exchange that are sold for peanuts. There's a yogurt/ice cream production company with PE of 15, rev growth of 20% annually and ROIC of 25%. I'm laughing. Greeks know nothing about money, the same happens with UK investors.

The report was very positive as I said. Two parts of the business are in line with expectations and one part ahead of expectations. The expectations are low to mid single digit growth, they can remind as that. The cost savings are materialising as predicted. But I don't like this style of writing, as if you're an author. It could have been bullet points with percentages, numbers etc.

The update was very good imho, although I don't like updates without real numbers and all these vague declarations. Hopefully the business recovers, I see it easily returning to high single digit growth in the future and this will price it at 700pp

Hi MrBB

I started buying when it dipped during Covid (April 2020). Started at 800 pp and bought more since then, it's my second largest position now. I did a mid hypothesis that with the buyback rate they had (back then it was more aggresive, they were buying back 36000 stocks per day on average, now it's 17000) I would have an 25% CAGR of the stock price since 2035. At the moment, we are above this rate, but I see it slowing down in the future as the cash reserves remain the same and the stock price grows. Remember, out of the 900 million cash reserves, approximately 600 million is regulatory requirement to oparate in certain markets. So, the actual "free capital" to invest remains steady at circa 250-400 million all these years.

Back then, there was a period when the enterprise value of the company was circa 600 million pounds and the annual profit was 350. This was insane. Since then, the stock price has almost 3xed.

The customer deposits of 3.1 billion dollars vs 1.5 last year is phenomenal. It means they've attracted valued customers. Very positive results.

Plus normally buys back 16000 shares, yesterday they bought back 47000 shares. I like their reflexes so much.

And that's a proper long analysis for someone that doesn't have a problem to hold this stock for 2-3 years or more. Which is rare for a site like this, where almost everybody thinks short-term. Hats off sir