Member Info for Doodoo1987

As we're talking about brand, have anyone of you ever compared this to Birkenstock? The later is 12+ times more expensive. They have a trending growth at the moment, but they used to lag at the past. Their fundamentals are about 1.5-2 times better than DOCS, but their valuation is 12x. I will laugh in the future if DOCS starts growing and they start losing traction.

Hi Star Bright,

I have looked a lot at the circles of these type of fashion stocks. One of them is Prada (1913 in HK). It has gone down similarly to Dr Martens about ten years ago, then smoothly recovered. I believe that Dr Martens can do the same, return to moderate growth and maybe have their time at the end of the decade where they have a year with close to 20% up. It's a great brand, some people say that the quality is not as it was many years ago, but I have pairs and I disagree. Anyway, a part of a good investors portfolio should be high risk high reward stocks and I own DM and YouGov.

Operating cash flow is 189.8 million GBP. On the other hand capex is 18.7, share based compensation is 8.7 and reduction in inventory is 62.7 million GBP. So, if we sub-stract all these from the operating cash flow we get a figure of 99.7 million which is the free cash flow if we maintain the same inventory all over and don't dilute shareholders with share based comp. Net debt including leases is 249.5 so enterprice value is 937 million pounds. This is a 10.6% yield. This figure is OK for a stagnant revenue loss business, however if the company return to a moderate growth, let's say circa 7%, this is figure is too good to be ignored. In addition to this, I can't calculate properly the capital employed, because I don't have access to some long term figures for the liabilities that I need to substract, but worse case it's 366 million. So 99.7/366 is 27.2%, a great return. This is always good with DM, that's what makes it an acquisition target. In my opinion, if the company returns to moderate growth, the stock can slowly jump to 1.5 pounds. If it continues this way, it can easily lose another 20-30%. It's a high risk high reward stock, but the pendulum seems to be more on our favour at the moment.

E-Toro IPO'd yesterday. I'm not familiar with their business, but I think they are similar to Plus500. E-Toro invested a lot at the previous years to attract customers and their margins are nowhere near Plus500's. They have huge revenue growth but on the expense of their net income which is less than Plus500. We're talking about 10 times more revenue than Plus500 and 2x less income. And their market capitalisation in America where they see growth and have an erection is 2x the market cap of Plus500. What is your opinion?

Hi OiOi Savaloy,

Plus500 is always undervalued and always a buy, sometimes it's a screaming buy and some others is a weak buy. I think the stock is a weak buy today. A couple of years ago it was the ultimate buy, the share price was at 13.5 GBP and the company bought back north of 7 million shares from a fund. The enterprise value back then was circa 600 million dollars. It now is close to 2 billion dollars, this is almost 4x and the company is still undervalued. Why? Because the free cash flow to enterprise value yield is still above 15%. This is a yield for a declining business. This business is not declining, it recently entered the Indian market which seems to be huge with regards to futures. The american business is also growing, they managed to enter with a small acquisition some years ago. They are clever not to disclose these things accurately and with clarity in the annual reports, although this is not great for us longs. Thus, we cannot project the growth there and put a multiple. From what I've seen, the guys are fantastic capital allocators, I hold the stock for more than five years and it's a pillar in my portfolio.

Another 72000 shares bought back yesterday. This is 0.1% per day.

Plus500 bought back 74,682 shares on Friday, I believe that they will do something similar today. They speak to us with this, volatility is definitely good for us.

The funds and everyone is elling the FTSE250, Plus is a constituent of this. I can't see any physical product being exported/imported. The same happened in Covid-19 crisis, but this quickly rebounded.

LWHL,

500 is laughable for an offer, 700 is too low, 850 is fair, above 1000 is premium. My cost basis is very low but I'd rather hold it for years than accepting a 500 offer.

It’s the first time in years that I’m considering selling part of my physical gold ETC to buy shares of this company. I will probably not do it, but this is how compelling I find the valuation.

It's not exactly the same, altough it's close. But on the contrary, one can say that they overpaid for this acquisition. I think they paid pretty fairly, as it's a quality business with good margins, but the market certainly thinks otherwise or is manipulated. Anyway, whoever is a real long gets the bathtub and buys at these levels, I don't care about the manipulation, these prices are a gift for real investors that have the patience to hold it for years.

YouGov's fundamentals are a lot better than Asos, although I understand that you compare the potential share price increase at the day of the results. But even this dog, Asos, attracted a takeover a couple of years ago and the share price went north of 10 pounds. Imagine if YouGov became an acquisition target. The share price can spike 200%+.

Haha I made a mistake obviously, I wanted to write "rest assured" but I had a brainfart.

The head of investor relations, Louise Bryant, sent an e-mail to the employees.

Hi guys,

so, I learned some new things. After yesterday's announcement, the results were received very positively by the analysts and the price started climbing. The company quickly informed that there's a short seller in the market, "talking their own book" with a bear thesis - they have spoken to them in the morning and corrected the misunderstanding. They said that it will likely take a few days for the misconception to filter through the market, but they arrested people that they are talking to investors and analysts to give them the facts. Now, Zillah Bing-Thorne stepped in and bought more shares yesterday after that. She has bought shares many times in the past, she's very active on this frontier.

This new product seams very promising. I wonder if they provide any guidance for the revenue in the upcoming trading update.

Hi John Dutton,

There should be hedging more than previous years, yeah, I've observed it too. If you saw the regulatory news of the company, they've bought back 36,000 shares on Tuesday, while normally they buy 20,000ish. Anyway, I compared it with times when VIX hit 50 and 60 for a couple of months, which is not so apples-to-apples comparison. In addition, they've diversified their offerings more, back then they were pretty much a CFD only platform. Now, they are a lot more things.

That's exactly the usefulness of the buybacks, to allow you be able to increase the dividend per share while you decrease the actual total dividend amount. That's what's lovely about buybacks plus the tax incentives. The 8.5% yield on the dividend is one for a business that doesn't grow at all or even shrinks. But this company grows slightly.

L&G will use 500 million pounds to buy back shares during 2025. At the current price this represents 206 millions shares. The average daily volume is 16,6 million shares. LSE has 211 remaining trading days for 2025. This means that L&G will buy back circa 1 million shares per day. This is 6% of the daily trading volume, which can provide a great support for the stock. Additionally, 500 million capital for buybacks will decrease the shares outstanding (which are now circa 5.9 billion shares) to 5.694 billion shares. This is 3.5% less shares. Which means that they can increase the dividend by 3.6% without increasing the total amount. 8.5% current dividend yield & 3.5% buyback is 12%. They've declared 40% for the three years, which means that either the dividend or the buybacks will accelerate even more in the next two years. Which means that the share price will follow. We don't want this to double, we want it to grow steadily and exceed the market, that's it.

Every time we have a volatile market this goes down, although the company is a hedge against volatility. The same happened during covid-19 in March-May 2020 when I started my position. The company went down almost 35% although they were killing it making tons of money. It's a funny thing, because it shows that money managers sell everything when the market goes down, without thinking critically. This will shout up, I would like them to do even more aggressive buybacks.