Member Info for lordloadsoflolly

An interesting range of views on Nvidia here.

Though there seems to be some consensus that their current growth rate's unlikely to be sustained for more than another year or two.

Which is why I maintain SMT should be reducing their holding slightly & gradually over the next year. Doing this, they could easily retain a sizeable holding on their books at nil cost. Whether they will or not is quite another matter.

Once NVDA's growth starts to slow (which it inevitably will eventually), it'll be way too late to bank the level of profit that's currently on the table. And whilst agreeing there are significant differences between the revenues & profits of AI companies today and Dotcom start ups of the 90s, there are also similarities. Notably, company valuations at astronomically high revenue multiples by historical standards.

When people start saying everything's different this time round, I start getting REALLY nervous!

Remember Adastra?

Posting breathlessly until 7th February, implying IMM's share price was at bargain basement levels.

Since when it's dropped another 12% or so.

Then in a puff of white smoke, Adastracadabra suddenly disappears. As if by magic.

Hardboy - odd, as SP opened slightly up this morning before dropping at around 9.30am.

Hard to know if the fall's down to a new bit of broker research, a significant fund manager sale or just a delayed reaction to yesterday's RNS. There's certainly been more active trading today than normal, but values generally look small. The highest recorded trade I can see so far was for £55,645 at 9.30am (i.e. around the time the price fell significantly): www.londonstockexchange.com/stock/HAT/h-t-group-plc/trade-recap

Perversely, it could be that investors are slightly spooked by the news of yet another round of financing. Which I actually view as a positive. Amongst other things, it suggests the pledge book is continuing to grow and that H&T is therefore requiring ever more capital to lend out. Since it lends at far higher interest rates than it borrows, a growing pledge book should correlate - at least in part - to growing profit.

So in short, I'm not unduly bothered at this stage. Though I do still think yesterday's acquisition announcement was questionable to say the least. And that presentationally, the piecemeal funding increases have - perhaps unjustly - dented sentiment. As you say, providing March's update doesn't show further deterioration in H&T's retail sales and the outlook sounds reasonably positive, confidence should start to return.

No idea why LSE has suddenly removed every capital letter from my last post.

They were all there when I keyed it!

Let's see if this one's the same......

whilst ai is set to be huge, i also sense it's going to be the next investment bubble.

to me, valuations in companies like nvidia are increasingly extrapolating current growth levels and assuming they'll continue for the foreseeable.

as those of us long enough in the tooth to remember the dotcom crash know, nothing lasts forever. and valuations which assume otherwise are - eventually - likely to end in tears.

of course, nobody knows for certain when - or indeed if - any correction will come. so it's a brave investor who takes a bit of money off the table just as everyone else is piling in. and they're unlikely to get the timing right, so they risk criticism & derision when they do it. but personally, i'd like to see smt start reducing its exposure to nvidia. not massively, nor eliminating it altogether. just gradually reducing over the next year or so. sure, nvidia might double, triple, *****uple again, as it did between sept 22 & now. but equally - & history suggests far more likely - people will eventually realise even ai has a finite need for new chips. albeit a huge need.

and by the time that realisation dawns, it'll be too late to man the lifeboats. the dotcom crash was savage. i suspect the great ai boom & bust might also be.

Gotrader - will you EVER give up on your endless speculation about which fund's sold to which other fund?

All so utterly meaningless. Bottom line is the only thing worth focusing on with IQE is - er - the bottom line.

Phenomenal isn’t exactly the word that springs to mind with Rick IMHO.

I watched the recent Investor Meets interview with him & his CFO and found Rick rather unassured & uninspiring. To me, the CFO was far sharper, both in his answers & presentation style.

No doubt others will disagree, so best watch it yourself & decide.

DireCons - unless the messenger’s Tee Dubbya of course.

Hardboy - according to Thisismoney, H&T HAVEN'T acquired the Ilford property freehold:

"H&T will enter into a lease in respect of the store."

www.thisismoney.co.uk/money/markets/article-13108401/Pawnbroker-H-T-Group-acquires-pledge-book-Essex-based-Maxcroft.html

In terms of the new financing, according to UK Investor Magazine: "This takes total funding to £85m. Some of the new capital will be used to pay down the revolving capital facility (RCF) with Lloyds".

That Lloyds RCF was priced at 2.4 to 3.3 percentage points above the sterling overnight interbank average rate. Sterling's overnight rate currently stands at 5.19%, so I can't see them saving a great deal there.

It's all starting to look a bit more haphazard to me. Funding has been increased multiple times in recent months, some of which now looks like it's going to be paid down in favour of using yet another new lender. Fair enough if it saves them money overall I guess. But why keep raising finance piecemeal? To me, it's beginning to come across as a bit more tactical than strategic - more whimsical, less planned.

Personally I'd have preferred them to raise any additional capital by offering fixed rate preference shares to existing investors. I, for one, would have happily subscribed to H&T preference shares offering, say, a 7.5% annual dividend, redeemable at par after 5 years. But I suppose this might be a less predictable/more costly & cumbersome way for H&T to raise the capital it feels it currently needs.

Whilst I normally have total confidence in H&T's management, the £11.3m acquisition of selected Maxcroft assets looks dubious & EXTREMELY overpriced to me.

As far as I can see, Maxcroft only has one outlet. Google it. It looks like a small converted house in a largely residential, non-retail area. And the main acquisition is their pledge book, valued at "just" £6.1m. Plus they'll assume the cost of Maxcroft's five (yes, only five) employees.

I get that Maxcroft's customer profile offers diversification, with a far higher pledge loan mean value. I also realise its employees may have some expertise in targeting a different customer demographic. But £11.3m? Really?

That said, so far the market has reacted positively to this morning's RNS, including news of an additional £25m financing at relatively high fixed interest rates.

If the share price nudges slightly further up, I'll be banking profits on the additional shares I bought at 319p when their TU was first released on 23 January. But that would still leave me with a sizeable holding here, as I remain confident in H&T's 1-2 year prospects. Just don't want to be over-committed to any one company.

In terms of the SP drop - though it was announced 11 days ago, news of Opti's auditor swap may have shaken confidence.

It's not 100% clear to me whether this was Opti's decision or the auditor's, though the phrase "its termination as auditor" suggests the former.

The RNS does state the old auditor "is not aware of any circumstances connected with its termination as auditor that it considers should be brought to the attention of the Board, creditors or shareholders of the Company."

Even so, there's always a reason (though it could be something as innocent as cost / culture clash / perceived incompetence of former auditor).

Dallo - it would be good to get an acknowledgement though, just so you know she received it.

There was a trading update on 28th Feb 22, but nothing around that date last year.

So as martinu rightly said, they're ad hoc.

Basterman - you say "I don't think Cliff has any idea of when, how, or even if he will exit. There are so many factors to consider it's not feasible to make such a commitment to investors."

Problem is, Cliff is on the record several times suggesting the initial holdings would be exited (and a special dividend distributed) within the next 1-2 years. And we're rapidly getting to the end of that period now, as he started saying this some time ago.

I wouldn't mind if he'd never suggested as much. Nor would I ever have invested in the first place.

And that's the crux of the problem here - investors have been deliberately misled. Which is why Tek is trading at such a discount to the sum of its parts. And is likely to continue that way unless Cliff rapidly delivers on his promises.

Badsterman - assuming Tek is now exploring new opportunities (which will presumably require significant funding to get off the ground), how exactly will existing investors ever get a decent return?

Sure Tek still has stakes in its existing holdings (which - with the exception of Salt - have lost significant value since IPO). But if Tek has to dilute these stakes even further to fund new initiatives, when will investors ever be able to extract any benefit?

I believe this lack of any clear exit strategy for existing investors explains the continuing heavy discount to NAV.

Pedro61 - Last year I'd have said the same.

But since then - with an imminent Living Wage rise & a sticky retail backdrop - I'm not sure 500p+ is achievable this year.

That said, I fully expect the share price to rise above 400p at some stage before 2024's out.

GrowthmanPO - yes that's certainly been the pattern here in recent years.

I doubt it'll be any different this time and only expect growth to start building in the second half of 2024 at the earliest (if then/ever!)

All the posters writing excitedly about the recent small uptrend should perhaps remind themselves that this time last year the share price was double what it is now. That said, I do expect significantly better times lie ahead. Just not quite yet.

Djframboise - you carry on labouring under that assumption then, as it obviously makes you happy.

ICB888 - maybe, but surely that discount tells us something (namely that investors don't think Tek will ever crystallise Salt's current full paper value)?

How else do you explain Tek being worth less than its current holding in Salt alone?

Djframboise - wrong on every count I'm afraid.

1) The last time IQE closed below 20p was just under a month ago. Check it out on Google if you don't believe me.

2) You've no way of knowing why the price has drifted back over the past couple of days as my post highlighted (again, look on Google if you don't believe me). It might be down to selling. It might be something completely different. So equally, you've no idea whether or not we'll soon see another rise.

Apart from that your analysis is spot on, so jolly well done.