Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
HKK I’m not sure that using current metrics to compare valuations with competitive companies is all that informative if you don’t take the respective growth rates into account. Even small difference in grow rates, when compounded into the future, make a big difference. And the growth rates of DT and CRWD and S. are different.
Most brokers will be taking a view on where these growth rates are going, and using DCF analysis to come to a valuation. it is of no surprise that there is a large spread in these valuations. I would put more credence on the average broker values you gave, than using comparison of current AAR numbers.
Personally I think the valuations of CRWD and the like are in bubble territory.
Cr888 I am one of the idiots who sold out some of my holdings earlier last year for a small profit. This idiot invested the proceeds in Nvidia currently 150% or so up on my purchase price vs DT currently up 40% on my sales price. So sometimes it is good to be an idiot.
I remain a strong believer in a buy and hold strateg and I still hold DT shares, but when opportunity knocks …………
BS Question - If you built up your position by “price cost averaging” why do you “I lament the lows”? Surely, if you want to build up a position in a business for a long term hold, I would have thought, you would want to celebrate the lows - at least while building up that position by price cost averaging.
Here HKK one for your list. In The Times today:
“Darktrace, the cybersecurity business, rose 17¾p, or 3.9 per cent, to 476¼p after Bank of America upgraded it to “buy”. Analysts at the bank said improvements at the Cambridge-based company had given them confidence in its continued growth.”
SW77 you raise an interesting point - investing is about both about wealth creation and wealth preservation (if you have some wealth) and my portfolio is split between the two. And W, you are right about Black Swan events.
To protect my wealth, about half is invested in trackers. For growth, I once had about 30 stocks - far too many to fully understand and follow so I am now aiming to hold no more than 10 quality companies, Microsoft being my favouri long held company, along with REL in the UK. I’m not smart, or brave, enough to whittle it down to 4.
DT, together with some exploration stocks, form part of my limited speculative portfolio - buying into them with the initial expectation that they could become 10 baggers in a reasonable time frame. I no longer think DT has any chance of meeting this expectation, but it could still be a worthwhile investment if performance improves.
It has been an interesting journey investing in DT, and I have learned a lot holding it. First time I came across negative working capital - fancy your customers bank rolling your business and not having to borrow money from a bank! No debts to a bank, only to your customers!
Ok - each to their own. I prefer now to only invest in companies in which I have a deep fundamental understanding, and in which I have sought to build up my own competence to be able to assess itheir long term competitive advantage.
I, too, used to think that diversification was a good thing, but now I prefer to invest in only a few companies that have proven sustainable competitive advantage - very few have - and which I understand. Buffett recons you only need very few, and I now tend now to agree.
Always a surprise to me that people invest in companies/businesses they know so little fundamentally about. But, I suppose, if you are a trader or speculator you don’t need to know. The whole financial strength of DT depends on it providing SaaS and being paid up-front by subscription.
In the end it is our decision after a recommendation from the BoD - and then only after a deal is negotiated by executive management or, if hostile, directly. We own the company after all - as does Poppy as a shareholder too. Apart from agreeing or otherwise to director nominations, and the payment of dividends or share buy-backs, it is one of the few rights we have. Very few of us exercise that right.
Straightaim - yes net ARR added, expressed as a %age, is the second derivative of AAR- rate of change of the rate of change of ARR- (or the rate of change of the growth rate.) This was slowing (decelerating) but is now now increasing (accelerating) although way behind the 27% being achieved by Crowdstrike. This makes simple comparisons of value so problematic as most of the intrinsic value is from future free cash flows. Projecting forward a 5% growth rate vs one of 27% is quite marked.
The problem DARK currently has is with the rate of growth of new customers as the growth rate has been declining since IPO impacting the net AAR added figure. Current growth of ARR/Revenue has depended to a significant extent on up-selling add-ons (see RNS).
They gave reorganised their sales forrce so the hope is that this will continue to improve.
K - this is an auction, (UT), and, as in any auction, there are usually many buyers buyers and sellers. But in the end 392785 shares will have been bought and an equal number sold. Basically if there are more wanting to buy, than those wanting to sell at a given price - hence driving the agenda -it will be classified as a buy. And visa versa. I don’t think the auction numbers are included in the daily volumes/.
The arithmetic. Is number of shares 392785 * price in pounds 4.361 = 2m. If more than a million the value is always rounded to the nearest million.
UT means an Uncrossing Trade (auction). O means a trade with a MM. A means an automated trade through SETS .
Volumes are not what they seem. One share bought and then sold by a MM counts as a volume of 2. One share bought and matched with a sell in SETS counts as only 1. Crazy but there it is.
SW77 - Surprised you quote Jessie Livermore. Wasn’t he a day trader using technical analysis and shorting strategies -the very antithesis of Buffett’s approach. Mr Market is often wrong - is that not what creates opportunity to buy a slice of a business cheaply - or exit at crazily high prices.
`SW77. If the growth rates change direction as forecast by DT., I think your optimism iwill be well justified. I would concur with your view as to 25% undervaluation on current fundamentals But, as we know, Mr Market is a manic depressive and will continue to swing from being over pessimistic to wildly optimistic. So what the SP will do in the short term I cannot hazard a guess.
I thought the next results were only due mid-september.
Next week we should get a trading update on customer numbers, revenue and AAR and their respective growth rates - the latter have been showing a decelerating trend over the last 2 yrs. DT said they were expecting the growth rates to stop slowing, or even start reaccelerating. Let’s hope this is the case.
All their competitors Crowdstrike, SentenelOne, Fortinet, Palo Alto etc. report fierce competition but with an otherwise healthy demand for cyber security. There will be winners and losers on the way. Does DT still have sustainable competitive advantage we all hoped it had with its still unique approach is the question I am asking myself?
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“A company listed in the FTSE 100 is only ejected if its ranking drops below 110. Similarly, promotion into the FTSE100 requires a ranking of 90 or higher.” It will need a market cap of approx £4.3 B to match position 90.
*Minus (-) 1890/31.
Getafgrip - Do you regard ROO as being s good investment?
By the way, ROO is not yet bottom line profitable (E = net profit = -31m in 2023) This would make the PE ratio minus1890/3. Revenue will need to rev up from the current 3% growth rate IMHO.
HKK - are your revenue numbers for CRWD correct? They report a year-on-year figure 0f $3.06b in their latest update.
As the future value of CRWD & DARK largely depends on future earnings, I think the growth rates are much more important than current metrics and should be modelled in any comparison. For instance the latest revenue growth of CRWD is 36%vs DARK of 27%. And the net AAR added of CRWD is accelerating at 27% and DT decelerating by 10%.
I don’t dispute the valuation difference is huge. To my mind it is probably a little of CRWD being overvalues and DARK being undervalued. How this impacts the worth of the customer base I have no idea.
Incidentally CRWD seems to be able to get $130k revenue per customer and DARK $60k.
SW77 =Spot on, reminds me of a Buffett comment in his 1997letter to SHs
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A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves.
But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the "hamburgers" they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.
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They would need to take great care that they did not fall fowl of the insider trading regulation - “‘the illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information”. Would they be that careless?