RE: Explaining/understanding the Ocado new contract delay07 May 2021 11:16
If I have to be totally honest, I would value Ocado at less than £10 easily.
In terms of methodology we cannot use DDM or DCF unless we use CFO. In terms of relative metrics we cannot use PE but P/S is still too high. It should be no higher than 1.5 but is currently closer to 4.
RE: When is it time to call it a day06 May 2021 18:10
In terms of valuation, I use the same approach as the equity research department's within the IBs. I use a number of valuation metrics (PE, P/S etc) as an initial gauge then use more advanced techniques to forecast outwards.
RE: When is it time to call it a day06 May 2021 17:00
I dont consider it to be overvalued.
When I do a few quick mental arithmetic on valuations compared with other similar companies. I start with basic fundamentals of revenue vs mkt cap, PE ratio, growth rates, EPS etc. Then I compare to other companies. So I would look at Ocado and think its massively overvalued. Boohoo is slightly overvalued but AO World is either fairly valued or slightly undervalued.
AO - rev 1.6bn - mkt cap 1.2bn Boohoo - rev 1.7bn - mkt cap 4bn - PE 43. Ocado - rev 2.3bn - mkt cap 12bn
When I start to forecast profits and look at valuation metrics such as discounted cash flow or dividend discount model I think AO World are undervalued. Their revenues are increasing by 60% currently, but like i said before, they need to translate these into profits .
RE: When is it time to call it a day06 May 2021 15:51
JG68 - I didnt expect this sort of drop. I havent bought any dips yet but I plan to. The growth rates here are extraordinary, bigger than Boohoo, Asos, Ocado etc.
My only criticism would be the size of the profits they have made vs revenue but, and it's a big but, there are making the right noises regarding Germany and I can only see demand increase so I suspect profits will follow. However, this fall is overdone but welcomed as its providing me with an opportunity.
I only stated Carney as I haven't heard the views of Andrew Bailey on inflation and interest rates.
However, that being said, the BoE still comprises of a 9 member committee and Mark Carney expressed the views of the BoE committee rather than his personal view, of which the majority are still on the committee. Furthermore, the Governor has the deciding vote in a 4-4 outcome, not to decide the interest rate policy of the BoE himself.
I imagine the BoE committee haven't radically changed their views.
From a rates perspective, its been known that Mark Carney was in favour of when starting to increase rates would only do so in a measured manner and not 4 or 5 rates increases in a year. I'm assuming the same will be done whomever is the Governor when rates start to rise.
The only exception to this is if inflation really starts to rise. The BoE at that point will have to balance between inflation on one hand and debt defaults on the other.
RE: My two cent logic on the vote06 May 2021 11:09
Although I think the vote will pass, I can understand why people would vote no. Its natural human behaviour when feeling resentful or angry that you want to spite them, irrespective of if it negatively impacts themselves.
RE: DIRECTORS NEED TO BUY IN AGAIN!06 May 2021 11:03
If you've been here for the past year then I'm assuming you expected a nice rise into the results which failed to materialise and now the SP is getting close to your entry price, if its not already passed.
I'd rather they focused on generating 40% growth rates and exponentially increasing profits than buying shares because of some arbitrary range created by nervous investors.