Member Info for GoCPI

"The only trades that I'm interested in is from our directors."

Spot on, NigeCo - All the best to you. I nibbled on more in the mid 40s last week - My biggest holding got a bit bigger - but I like the sector, I like the class of the management team and the fact that their large holdings are aligned with our interests. When rate cuts start to materialise in the US, we'll be properly off to the races. Maybe its a 2025 story, but the patient will be rewarded, IMO.

"Lets get these elections out of the way, Bailey bound to be cautious if Labour take the helm."

@1pencil - whatever happens in the UK is of very little consequence to S4. >80% of revenues is from the US and what happens to interest rates in the US is of far more relevance to S4. If only SFOR doesn't have its primary listing on the shiite LSE, we'd already be valued a lot higher, IMO - let's all thank Brexit though. The gift that keeps giving!!!

S4 has won a major client just in the past 2 weeks and if revenue green shoots become more visible, we should move up higher. But then I always need to remind myself that we're still only listed on the useless LSE and these don't matter much and the path of least resistance is always down!!

"A once £5-6 Billion business today valued at less than £300m." - I have 3 words to describe the key reason for the current level of valuation --- Fu*kin useless LSE. Lol, that's my favourite punching bag.

It's great to see Wesley buy in the open market. @NigeCo, you finally thinking about buying more and averaging down? ;-)

"So - if company can cut costs and generate profit then the importance of new revenue is less important." This is true to get CPI's SP to the 30s or so.

For a higher trajectory we'd need a bit of revenue growth and IMO, that 's a 2025 (and beyond) story when the private sector IT spend recovers. THat's where the opp for CPI sits, along with Labour (potentially) spending more on public services and boosting the need for CPI's services. It's not difficult to pull the SP in the low liquidity market that's LSE and in a news vacuum that's the path of least resistance. I won't hazard a guess as it how low it may go and I won't worry myself to death on a daily basis over that outcome, but for me the medium to long term trajectory is a solid one with the new management team at the helm.

GLA!!

Thanks for your amazing analysis. I'm not sure what I'd do without it!!

They've been short a while. Actus has increased their short position this week and hence the tick up in the %. Near term, in the absence of news/business updates, they're having a great time on the low liquidity LSE. ;-)

Having said all this, I fully expect the clueless LSE traders to bring the SP down a few more % points today...It's a very predicatble and unsurprising outcome, sadly.

RWD - No, not saying you were wrong or pointing fingers at all.. It's good to be sceptical and be pleasantly surprised, rather than the other way around. And like you mentioned yesterday, it's great to diversify away from being a one sector (tech) trick pony. Slow and steady does it for me..

Thanks, Jac...

@RedWineDay - here's the kicker from the article. A big whopper by the sounds of it then. ;-). Let the market play its games out - I just need to remember to stay more patient and accumulate, if and when I can.

"It is a big win for S4 Capital on multiple levels, likely exceeding what Sorrell defines as a “whopper client”—those worth $20 million or more. It also validates Media.Monks’s investment in building out its AI-powered content and production studio called Studio.Monks. For years Sorrell has talked about the importance of agencies being able to provide hyper-personalized content at scale. Last week, Media.Monks launched a model that is meant to put Adobe’s generative AI offering, GenStudio, at the core of the content supply chain solution it can offer brands."

"I have been here many times with various investments over the years/ decades. All I can say is that in nearly all of the instances, if I had just sat on my hands and waited, I would be a vey wealthy man, but hindsight is a wonderful thing!"

Indeed, Caveman. ;-) I was looking back at my historical stock transactions on my Schwab US trading account and saw that I'd bought 1000 shares NVDA at 11.20 sometime in 2009 and sold a few weeks later at 10.80 - for a grand loss of $400. If I'd only sat on them till now - that $11000 is now worth about $5mill. Hindsight is ofren brilliant.

Whatever we may about low liquidity and depth LSE, it does open up great value investing type opportunities where valuations get very, very out of kilter with reality. S4 is one of them. I've started to add some more at these levels and wait for the eventual rebasing of the stock price. ;-)

Whatever floats your boat, PC.

LSE is shiite and is a low depth, low liquidity underforming stock exchange, particularly for non-traditional digital oriented companies and certainly for companies like SFOR whose non-UK revenues far outstrips anything from the UK. The only upside for listing here is the lax reporting rules (HY vs Quaterly) - makes it easy for MS and his team to not bother with quarterly reports/forecasts/conference calls.

Thank goodness ARM went and listed on the Nasd - can you imagine their valuation being as high as it is now if they'd made the cardinal sin of listing themselves on the LSE? Not a chance!!!

RWD - I suppose the important thing to note is that S4 gets content work across the 4 GM brands, whilst you have a couple of Stagwell agencies leading the creative for 2 brands, and a couple of independents leading creative for the other 2 brands. That at least is a solid foot in the door and could lead propel S4 towards more work in the industrial sector.

We can't as yet quantify what this could mean financially for S4, but this can't be too little given S4 is cutting across all GM brands!!

Even if S4's content division secures 1% of GM's US ad spend, they'll be a whopper in our books. 1msn's point is taken - we'll hear something about this new (whopper) win in the H1 report I suspect.

Another article detailing Media Monks' role as part of this selection by GM. Exciting times in the medium term. However, knowing the useless/hopeless depth of the LSE, not much will happen to the SP until it shows up in financials. Whatever happened to the old saying that the market is generally a great mechanism to discount future cash flows - wait, for the LSE that was before Brexit. We asked for it though, heh.

https://archive.ph/elW89

"She characterized the Media.Monks hiring as marking “a significant change in the way that we’re doing business.”

GM brand leaders will “hold the strategy,” she said, while the creative agencies will “lead the creative vision—the brand, the look, the tone, the feel, the major campaigns. And then Media.Monks will take those assets and leverage them to reach consumers in a very fast, efficient and prolific way.”

Savage keeps needling you and you chaps keep responding to him - it's as predictable as the sun rising in the east. You do realise that no amount of logic/reason/forward looking statements help with the argument against the resident gaslighter Savage.

Chill out, reach out for that beer or wine, and ignore the lightweight gaslighter's comments. And if responding to needling comments feels like hard work, just remember there is always the filter option.

Stay patient and just remember that there's a real turnaround incoming, gaslighting notwithstanding!!!

GWA..

"Don't know why you all let yourselves get sucked in to it."

I suppose a viable answer is that there's nothing better to do for some posters? After all, how long can you watch the paint dry (SP hourly/daily movements) and be fulfilled. ;-)

Jcj - yes, it is a sector downturn we're in - pure and simple. This is why revs were down last year, YoY, and will be down this year too. And all the anecdotal evidence from a large volume of consulting services companies back that up. Granted S4 hasn't itself in glory through a series of missteps operationally - delayed filings/series of misses last year as they failed to anticipate an incoming rapid fall-off in revenues. Last year's series of revenue misses was a blight on MS' forecasting prowess given he has had a very good pulse on global/US macro all through. They're seriously attempting to clean this up via a new COO (JB Berty ran the UK arm of a consulting services company that I worked at in the early 2000s and he was good at executing operationally). I'm quietly sanguine that they will turn this around going into 2025.

I'm a stockholder in NVDA and I know they're at the cutting edge of Gen AI with more R&D also being thrown at Quantun Computing too. I was specifically talking about the notion that Gen AI will make ad agencies' business model redundant/less viable. I think the reality couldn't be farther than that and you seem to sit on the side of the fence - sure, as MS keeps reiterating some aspects of the digital ad market services such as the Ad buyers' role could be minimised and time to market for Ads reduced, but all things considered it is increasing efficiency and not removing the need for ad agencies. After the Gen AI dust settles, it will be BAU. This is why I started accumulating S4.

If only we weren't listed on this Brexit hindered, low liquidity sh*ite stock exchange called the LSE, the SP wouldn't be hovering just about 30% off all-time highs. I can only suppose that listing on the NYSE is too much work for MS and his team to genuinely consider that option.

I'm by no means putting out a buy recommendation here even at these levels, though I feel strongly that we're very undervalued at these levels. If the US stock markets sell off from their all-time highs, they'll take the UK shares and S4 down with them. I don't know what the bottom is/was and I can only hope that it was the circa 36p that we hit earlier this year. If we can only look past the trading noise though, 2025 should be a good year with the incoming rate cuts.

"What makes you so confident that this is just a cyclical sector downturn rather than a more fundamental and existential shift?"

Jcj - other than the fact that you're so ostensibly a glass half-empty chappie, what makes you think that this is a 'existential shift' for S4? Just because you hear Gen AI being bandied about everywhere these days and how that could make some of the media buyers' roles a bit more obselete, why would you really think/believe that it would put a company like S4 out of business?

If that's really the output from your investment analysis, you shouldn't be invested here IMO. Sector downturns are a fact of life, and in the middle of one shiite gets thrown around about the imminent demise of the sector itself (example - oil back in 2020)/some key players in a sector in the downturn, but the tide does and will turn. Outsized returns accrue from investing in an out of favour sector/stock in an out of favour sector, when the price is near a multi year low. That's where my chips are placed.

Caveman - jcj is a frustrated mid to long term holder with a high average and hence vents, all the time. IMO, everyone's entitled to their views/posts, irrespective of their value or otherwise.

Jcj keeps thinking/assuming that a UK recovery or a rate cut will give boost - that's the wrong investment thesis for SFOR. If you're an investor here, your eyes needs to be firmly focused on the US Macro and the multitude of Ad/consulting business listed there and look for early signs/green shoots. Plus, we're listed on a sh*it stock exchange with low liquidity where the ones making money are traders, at least until there are clear signs of a turnaround in Ad/Consulting spending.

I try to ignore most of jcj's posts as they are negative borne out of frustration, but I suppose I see his POV and try to respond on the odd occasion. I'm not counting on any big returns in 2024 as I think that's a 2025 story, however the market may just front-run the recovery should US rate cuts materialise.

The only inflation/rate cut that matters for SFOR is a US rate cut!!!