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In the article, Archer mentions that the bulk of the milestone payment of $400m might be paid once KarXT gets FDA approval. I wasn't aware of this. Is he just guessing or is there some truth behind this ?

Nice write up on PureTech here:

https://uksmallcapstocks.com/f/puretech-health

Never nice to see people lose their jobs but these cost reductions will certainly give the share price a boost

Its absolute madness that the market gave us the opportunity to load up here under £15. Alpha will be trading over £17 by the end of today so last chance for those wanting to get in or add under £17. Anyone lucky enough to have read all the excellent analysis on here over the last few weeks will realise these are still bargain basement prices. Fill your boots ! Similarly, anyone visiting these pages in the months and years ahead will see what a fantastic opportunity we were all lucky enough and wise enough to take advantage of

Great to see a share buy back programme has been announced. As per my post on the 19th Jan, I suggested the company should be using some of the cash to buy back shares at these ridiculously low prices.

This should put a floor on the share price. I will definitely be adding here again this morning .

Nice work SC. Your analysis reinforces just how incredible the value on offer here is. I added again today

* is in no doubt that the ABS division......

I agree with your assumptions @ShearClass.

As with everything Alpha does, the growth of the ABS division has been astonishing. Your logic is sound and I agree with your thesis. Once commercial activity picks up, it stands to reason that account migrations will follow suit. Judging by what he had to say in the podcast you shared, Morgan Tillbrook is no doubt that the ABS division will continue to succeed. I quote:

“Its very much the ambition of ours to become the global leader of banking solutions to the alternative investment market”………”The reputation of Alpha within that space is growing exponentially & we are investing significantly in this opportunity”

Any which way you dice it, the valuation makes zero sense. I keep questioning myself, what am I missing here? What does the market know that i don't? I've come to the conclusion that I'm right and the market is flat wrong hence my reference to the Charlie Munger quote.

I believe the market sold off the stock because:

1) Alpha missed its £117m revenue target for FY23

2) The house broker cut CY24 EPS forecast down from 85.8p to 76.8p

3)the market is unaware of the interest income being earned on client balances. I say this because I cannot believe they would assign zero value to this. Lets face it, with ever increasing balance client balances, even if interest rates were to halve this year, Alpha would still make well in excess of £50m in interest income. Also, lets not forget that Alpha have hedged $400m via an interested rate swap at 4.14%. This hedge runs up until the back end of CY25.

Ignore my last sentence "Other than the fact Morgan Tillbrook is quite possibly the best CEO".....

I was going to write a little more about my thoughts but I pressed send by mistake and I don't think you can delete or edit posts on here. No time now, so i will revisit later

I've not listened to that interview before so thanks for sharing.

I've come away even more bullish on Alpha after listening. Morgan Tillbrook is one hell of a CEO. Under his stewardship I can only see ALPHA going one way and that is up. The opportunity here is huge. As the great late Charlie Munger once said: ""Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble." Im firmly of the belief now is one of those times.

Other than the fact Morgan Tillbrook is quite possibly the best CEO

Thanks for updating us with the share register info SC.

Good to see a couple of new entrants.

Move to the 250 cant come soon enough

I also struggle to see the shares falling below the 30 month range.

As far as I'm concerned the company should be using some of its cash pile to buy back shares. At these crazy cheap prices, it makes total sense to me. The £177m cash pile is growing by the day - the company are earning in excess of £1.5m per week in interest!!! Time to start deploying some of it in divis and buybacks

@ShearClass, well spotted. I did account for the £177m of cash.

Its quite clear the sp is being heavily manipulated by the mm's.

Also as you and @Koolhead point out, the reason fro the price fall is probably also significantly to do with funds being forced sellers due to outflows.

I will keep adding here as this opportunity is just too good to pass up

I've just run a reverse DCF on Alpha projecting cash flows for the next 8 years.

My assumptions are as follows:

I have assumed that over the course of the next 8 years Alpha will produce £400m in free cash flow = £50m per year average. I am basically implying Alpha will not grow at all in this time. (To put this into context, Alpha have done c. £115m pre tax net in FY23. It remains to be seen how much free cash this produces but its certainly going to be well north of £50m!)

Terminal Growth rate of 1%

I have applied a discount rate of 9% to these cash flows.

Based on these assumptions intrinsic value comes in at £16.58. The current share price is about £16.50 so this tells us is the market is pricing in ZERO GROWTH for Alpha from here on. Simply put, imo the market is dead wrong here. This stock is severely mispriced. I've bought heavily here and will continue to do so when funds allow.

Wow @ShearClass, your breakdown of Wise's earnings taking out the interest income really shocked me. An operating loss of £5m on a market cap of £11.8bn - madness

Alpha's conservative approach of not including interest income in their underlying earnings figures is hurting the share price. As @ShearClass points out, whilst this is very commendable most companies do not report like this. This subject is covered by Liberum in their note today.

Liberum compare CY24 forecasts - Alpha vs Wise (who unlike Alpha include interest income in their underlying EPS) on an apples-to-apples basis.

On an EV/EBITDA basis WISE trades on a 3x premium to Alpha. On a PE comparison its 4x

This extract from the Liberum note expands on this point:

"The valuation delta between Alpha and Wise is thus hard to justify, in our view. Moreover, in Alpha’s case at least, there is a natural hedge: high rates benefit interest income, while lower rates benefit Alternative Banking Solutions. We believe this asymmetric valuation of interest income is a material risk to Wise in 2024".

A move to the main market is due this year. Surely more eyes on this value disconnect will close the gap. Alpha is criminally cheap down here. Ive added again today to make this my largest holding

Alpha another fantastic trading update yet the share price is down.

Margins have remained steady which is impressive considering they are spending heavily now for future growth.

PBT up 10% yoy on an underlying basis - even in this tough environment the company is growing well. When the environment improves growth rates of > 25% will resume here.

In the meantime the company is making cash hand over fist as the client balances of their alternative banking division swell. As a result PBT on the year is up 140% to £115m. Cash on the balance sheet up by over £60m to c. £177m

Seems like the market is completely ignoring the cash from interest on these client balances.

Trailing PE for FY23 here now under 8. Its completely absurd how cheap this growth stock is.

Should be getting a trading update here on Wednesday 17th

Hi Koolhead.

Initial free cash flow of £50m

5% growth rate in year's 1 -10

Discount rate 10%

Terminal rate 1%

Fair Value = £17.84

I'd like to point out that a 5% growth rate is very low and pretty unrealistic when you take into account that ALPHA have 5yr CAGR of c.50%