Member Info for lemonade311

This is the dumbest thing I've read all week.

You post way too much crap.

Selling a company just because other people sell is the dumbest thing I've heard lol

Nobody was all over this. It's an illiquid stock run by scummy scam artist management with a failing product. This company is worth nothing.

The leases are equivalent to debt.

The market can be very stupid.

in March 2020, jet2 share price went from £20 to £1.2 (doesn't show this on google), I remember because I bought tons at £1.2.

It then rebounded to £12.

Was jet2 business model broken? nope, just short term issues.

Same here imo, investors just can't help panicking and following the herd.

They do have debt, leases count as debt essentially because if you stop paying them, it's like a default.

So the main thing is inflation. This drives interest rates up which drives 10 yr gilt yields up.

From what I believe is, this spike temporarily caused liquidity issues because forward funding dried up. Also instutional buyers have less reason to buy BTL when 10 yr gilts skyrocketed because the risk-free yields on these now made WJG properties a lot less attractive.

However, rent yields are increasing at the same rate as inflation, and as inflation comes down, the 10 yr gilts should come down which will make the BTL's much more attractive to institutions again.

Also, there's a risk with forward selling I presume, where built materials skyrocket but you have already sold the property, this means that the sell price has been locked in but the build price could still increase when they build it? Not sure if WJG mitigates this somehow, maybe with futures on the building supplies? I wish I knew the answer to this...

TLDR: WJG heavily affected by inflation & interest rates.

Their is nothing that suggests a future improvement in ROIC, margins or revenue.

Company is destroying shareholder value consistently.

This is a classic value trap in it's current form imo. Shares are worthless until new management comes in or they pivot away from this f1, warhammer crap.

How did the directory buy 800k shares at 35p when it never hit this price?

Is it an off book trade with an institution? Anyone here know?

Indeed.

I just saw this and bought myself.

The results are significantly better than h1.

The catalyst for growth is when inflation stops going up obviously.

Their E/V is £24m.

They will probably hit > £4m oper. cash flow next FY.

That's an Oper. cash flow to EV of 6.

Considering this was a growing company before the macro stuff happened I think this is a long term buy and hold for good returns.

They bought companies at peak bull/bubble market.

The acquisitions were most likely value destructive. Inflation hurts them because they can't pass on the costs to retailers fast enough so they eat that loss.

These results were decent though imo

It's not oversold if the directors love destroying shareholder value and the company is worth nothing...

who cares what that bot generated **** website says.

and anaylsts who just follow the stock price.

Indeed.

I own no ASOS but how can the CEO go from saying an equity raise is not happening to weeks later doing an equity raise.

Nobody has confidence in anything ASOS says now lol

Semrush traffic shows a big bounceback too.

And yet the stock just keeps going down, more cheap shares I guess (hope i don't regret saying this :D)

Actually I might be wrong here.

If the bank takes into account Cash held in trust accounts into the ratio which I presume they actually do..

Not 100% sure on this but it seems they refinanced on 7th Dec. 2022 their RCF to have 2:1 net debt to EBITDA -> 2.5:1 net debt to EBITDA.

EBITDA was £7m~.

Cash at bank was £9.6m

Debt is £30m.

So Net Debt = £30-£9.6m=£20.4

Net Debt Ratio to EBITDA = 20.4/7=2.9

This is breaching their 2.5 max Net Debt to EBITDA ratio right?

I understand that a lot of their cash is in trust accounts which will free up after August holidays but can someone verify the above that they are breaching their RCF and are in technical default here?

So marketing to sales ratio is worse than 2019 when I had a look. However we are in a recession right now so it's expected.

And the margins are down heavily because of increased wages (new headcount) and marketing spend.

But if we put this into context, this is still investments for future growth, along with director buys and the share price is 25%!!! of what is was in 2019.

This seems quite crazy to me.

Does anyone know why the market is down 12% on this stock today specifically?

I can't find anything but positives in the RNS, considering the stock is down -75% from Mar. 2020 and this seems like a good RNS.

The only thing I can think of is people are selling due to the negative EPS which was caused by increased investments/wage rises due to headcount growth and cost of living increase in UK.

Any ideas anyone?