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All defensive stocks were good picks since late last year.
Majority jumped 10% with some even reaching 25% in the last two months so the ship may or may not have sailed already.
Currently all growth stocks are getting pummelled currently but this is where you can find value right now.
Risk v reward.
I think it's important to not put yourself in the frame of mind thinking a buyout is definitely happening soon. Discussions like these happen day in day out in the corporate world. It takes a lot of time for a sale to occur with a lot of going forward and backwards and negotiating.
I have been involved in a couple of company buyouts (where I worked for the company being bought out) and the company wasn't even comparable to the size of THG and it still took close to a year for the sale to go through purely because both parties were not completely happy with the sales terms.
There are so many opportunities in that long timeline for either party to say - I've had enough, I'm pulling out. I have seen this a handful of times.
Change your mind set to believe if it happens it's a bonus otherwise you will find yourself losing sleep day after day looking forward to that 7am RNS.
Instead what investors should be focussing on is whether this company has legs, if it does - how fast and far can it run? Over what time period? If not, why am I still holding onto this share?
The most important question being - by thoroughly researching the company, how much should the share price be?
That quick buck is very tempting but don't let it cloud your investing judgement.
GLA
Just a bit of fun since we ended up today.
Moulding's approach in handling THG and the market has been compared to Mike Ashley's a number of times.
Sports Direct (now Fraser Group) IPO'ed at £3 a share in early 2007. In just 18 months around November 2008, the share price plummeted to about £0.35 a share, a massive 88% drop (does this ring a bell?).
Since then, Fraser group smashed estimation after estimation and the share price rocketed from £0.35 to around £9 in April 2014, a 25 bagger!
Is this a possibility for THG in the long run? From £1.2 can this reach £30 a share!?
GLA
I really hope it's not just a concept reveal - that will either do nothing for the SP or send it down.
What we want is a big reveal that either dramatically improves current operations or something that we know will be a game changer.
I have no idea what it may be but for example driverless grocery deliveries? This will potentially open up unlimited amount of delivery slots essentially removing delivery bottle necks (I know driverless cars won't be feasible for the next few years at the very least but I'm using it just as an example).
We will want this reveal to be a revenue booster e.g. when they reveal the new idea, they also back this up with either a large signed contract or something to show that it's already revenue churning.
What we don't want is a "great" idea but it will cost Ocado billions to create and we won't see profits for the next XYZ years. Again this will either do nothing for the SP or send it further down.
I'm excited about this reveal but let's see if "management" knows how to play the market game.