Member Info for LorenzoLynch

HC,

Everything you’ve mentioned is the here and now…

Things can change very, very quickly.

You’re focusing on where the company will be in 3-6 months; but where will it be in a year or 2 or 3?

LME,

It will remain cheap, until it isn’t.

How often do we see investors kicking themselves after a re-rating upwards to fair value? ‘I saw the value there, but I sold out because of xyz’.

Do you back yourself and your research against the market? If not, you might be in the wrong game (and this isn’t an insult).

As for BAE and Diageo; the former has lots of growth already priced in imo. I don’t follow the latter much at all, but I do know they had some significant short-term tailwinds during the lockdowns and the Gordon’s gin craze.

Ironically, I held BAE around 4 years ago when I first started investing… I lost patience with it and sold at £6-something, from memory. I’d have trebled my money by now if I continued holding (not that I’d have held it for this long as I’m a hardline value investor).

JD is out of favour atm. There are far worse companies than this trading at 4x or 5x the p/e multiple imo.

The market is irrational and emotional; I think it’s wise to remain calm.

If you decide to sell, good luck to you, but I think you should settle your emotions before making a decision either way.

Accipiter,

Ahhh, I understand you now. I don’t pay much attention to the dividend, but I do enjoy seeing that money hit my account!

I noticed some fairly significant stocking issues at key periods in several stores (the only ones I visited) last year. I don’t recall seeing this mentioned in any of the RNS’, although another poster did mention witnessing the same thing.

This year, I’ve noticed a vast improvement in stocking, and a vast improvement on the gift side (selection and pricing points).

I NEVER buy gifts from CARD, but this time I was able to buy everything I needed for Father’s Day from there. Good quality stuff and great prices.

I do think management took their foot off the gas a bit last year and the Valentine’s selection earlier this year didn’t appeal to me, but I hope and expect to see a return to strong performance this year… assuming that Labour don’t throw a spanner in the works; as you’ve alluded to.

I could be wrong, but I expect Labour to give retail a break in this year’s budget, and instead shift their attention elsewhere. That said, if the retail industry is hammered again, some of CF’s competitors could go under, resulting in market share gains.

Many swings and roundabouts, but I couldn’t be calmer about holding this.

Lwhl,

I should have taken more notice! I did take a quick look, but it slipped my mind.

Any similar ideas are more than welcome (por favor).

I don’t pay my attention to charts, personally, although I do like to see a bowl forming, ideally.

I expect a swing on Monday morning, due to the U.S’s actions in Iran.

One one hand, the nuclear threat is reduced; on the other hand, there is increased threat of retaliation and increasing geopolitical instability.

It’s going to be a volatile period ahead, for sure imo.

As always, how we react to events will be more important than the events themselves in my view.

Accipiter,

This trades on a forward p/e of less than 6 (according to Stockopedia)….

It’s hardly a dividend only play imo.

I’m here SOLELY for the capital appreciation.

Jackdawr,

JD (like many other companies) was ridiculously overvalued 4 years ago imo, so this shouldn’t come as a surprise.

The share price peaked around £2.33, while net income was less than half of what it is now at around £240m per annum.

Reported EPS was only 4.61p, so it was trading at around 50x statutory earnings (according to Stockopedia).

Adjusted EPS (Stockopedia) was 6.4p, so it traded at around 36x adjusted EPS.

Similar P/e multiples today would see this trading at £4.35-£4.75, which imo, is absolutely ridiculous.

It now trades at 6x adjusted EPS by my reckoning (Stockopedia).

Context is key.

Imv, a company like this should trade at around 15x adjusted EPS when things are good and sentiment is positive, which would be around £1.80.

Uktonto,

An investor on the CARD board mentioned Dollar General to me a few months ago…. Looks like he played a blinder there!

We know nothing Tonto, we’ve never made serious money from these contrarian situations in the past, have we? 😉

AP,

I don’t buy a narrative, I invest in undervalued companies which have demonstrated a competitive advantage over a lengthy time horizon. Didn’t Nike admit that their direct-to-consumer strategy couldn’t compete with the likes of JD?

I only really speak of value, catalysts for growth and occasionally, economics. JD tanked because of 2 macro events: Reeves’ budget and U.S tariffs. That’s why I’ve spoken about macro on here.

Moreover, interest rates have risen in recent years, but now we’re starting to see declining rates, albeit with the U.S lagging behind. What happens to consumer discretionary businesses when interest rates fall, causing mortgage costs to fall and lending to become more available?

‘Sentiment is shot’ - hence the opportunity to make money here imo.

‘Declining margins’ - as above, rising interest rates, economic uncertainty, minimum wage increases and higher taxes. JD could easily reduce their headcount if necessary imo; resulting in higher margins. If Regis doesn’t do this, I think he’ll be replaced sooner rather than later, by a CEO who will.

Negative sentiment isn’t caused by poor performance, it’s caused by negative expectations for future performance. The market is always forward-looking (unlike yourself).

Really? I trimmed in the mid-90’s because I was made too over-exposed here, and I started topping up again in the 70’s… so no, I don’t buy in the morning and sell in the afternoon.

I sit on my hands until there are significant swings in a share price.

Right now, I’m relaxed about my holding. If we see sub-70p, I’ll top up again. If/when we’re back in the 90’s, I’ll reduce my holding slightly, so I’m not over-exposed.

It must be such a depressing existence, being so full of disdain for others.

Apologies Apendragron,

I didn’t realise that observing psychological differences between the two genders was ‘mildly sexist’. I also didn’t realise that sexism could be ‘mild’, but then again, I’m not a superstar big shot like yourself.

So seeing more value in a stock as the share price falls, whilst the fundamentals remain seemingly stable is acting emotionally? Some more divine wisdom that you should consider sending Warren Buffett’s way. Really clever stuff.

How is the brand in a death spiral? I take it the brands it sells are all in death spiral as well, and we’ll soon all be walking around naked?

With ever increasing revenues in the sports industry, I fail to see how the sportswear industry is going to die a sudden death, but then again, I’m a ‘limey’.

Oh yes, but the market also stated to see value a few weeks ago, did it not? I expect it to see value again the future. Industries often fall out of favour momentarily; hence why contrarian investing exists and is usually successful.

Without negative sentiment, how can present value ever exist in the market?… don’t worry, I know you won’t be able to answer that question.

I will indeed. As I’ve said before, it makes no odds to me what direction the share price moves in. I’ll trim/sell on a big rise, and I’ll top-up/buy on any dips.

Again, which country are you from? I’d like to avoid it.

With women I’m romantically involved in, I often add ‘right now’ to the end of their sentences, as in my experience, they are more emotionally-led than us men.

For example, ‘I love you’… right now.

‘I want to spend the rest of my life with you’… right now.

‘You’re the only man I’m attracted to’… right now.

I also apply this to share prices. JD’s share price is on the decline… RIGHT NOW. Does this mean that the decline will continue forever? Possibly, but I doubt it.

The share price recently rallied over 47% in about 6 weeks. Naturally, some profit has been taken off the table, but will this kind of rise not occur again, when sentiment changes?

Zoom out a little bit.

Put your feet up, chill out and have a good weekend all.

Share price only matters when you’re buying or selling… personally, I’m buying.

The lower it goes, the more I buy. It’s a very simple concept; provided that you’re confident in your research and judgment as an investor. If not, then a falling share price is the least of your problems.

Apendragon, as you’re 100% confident that this is going to keep falling, why not spend even more of your time on your Xbox while you passively make millions from your short position?

Apendragon,

Which country are you from?

Also, congratulations on your recent trade; your demo account must be flying.

Falcon,

I have no idea what the lemonade stand chief executive is talking about most of the time tbh.

Just seems like an emotionally-charged, bitter, low IQ individual who has no understanding of contrarianism or value investing.

Some of his shorts appear to have been successful though, so he seems to be earning a few quid from his ‘technical analysis’.

While I find slightly detestable, I wish him well, because he’s risking his hard-earned money like the rest of us.

I do think he’ll get a spanking here at some stage, however. I think he’s playing with fire.

Nonsense,

Agreed that it’s been an underwhelming turnout so far, but these are the Micky mouse games so far, and even those who are staying at home will be more inclined to buy sportswear and football tops/boots etc.

Attendances should rise drastically in the latter stages as the fixtures become more appealing.

The proper World Cup next year is the big one. That will see sales significantly increase for us in all of our regions imo.

No reference was made to the club World Cup in the updates, from memory, so I think and hope that it wasn’t factored in…. Agreed that it would be concerning if it is baked in.

Nonsense,

In short, because the club World Cup is a positive catalyst. I certainly don’t see it hurting sales.

I agree that the bread and butter is economic growth, increasing consumer sentiment, falling interest rates and so on etc, but I’d much rather have a tailwind than a headwind.

There’s potential for a nice upside surprise in the next update. Such matters don’t govern my investing decisions, but JD is evidently quite heavily traded. Any bad news and it really seems to tank; any positive news, and it seems to go on a rally.

I just top up and top slice for rebalancing purposes.

What the hell is going on here?

Big selling from 2 directors (around 4m shares sold in total; c.1.2% of the company, I believe).

Alan and Sarah Simpson sold around 3.5% of the company.

Octopus seem to continue buying, with a c.2.5% purchase on the 11th June.

Toonman,

Coincidentally, I was speaking to an investment banker a couple of months ago at a bus station (he was on his way back to Frankfurt, and I was going to Cologne).

The bus was delayed by almost 2 hours, so we spoke about investing, his career (he was explaining how the market is incredibly efficient now due to algorithmic trading, but I couldn’t make much sense of it tbh) and my investing returns (which he said was world class).

Anyway, he worked/works for Citibank.

I explained much of my investing thesis to him and he explained that he’s heavy on U.S tech etc.

When he asked me what I hold, I refused to share the stocks, because of how small their market caps are, but I did mention 2 stocks which I own (where I thought it wouldn’t make a difference if he started to buy some shares).

The 2 stocks I named: Card Factory and JD Sports.

Now he was a young fella (25-27 would be my guess), so doubt he has a senior post and I can’t recall his exact job now (he’s worked for 2 different departments). Wouldn’t surprise me if he passed that info on.

I did the same a while back with a Spanish investment banker I befriended in Budapest. One of the stocks I mentioned to him was PLUS when it was around £26. I still have his instagram, so I might throw this his way 😂.

Crazy coincidence though.

Who is buying shares?

JD Sports.

Norges Bank.

The CEO bought just under 110,000 shares prior to the buyback @ 90p each (and owns around 5,000,000 shares I believe).

Why?

Who is selling?

No Directors.

No institutions with a notifiable position.

Why?

Rats,

Honestly, I think this whole idea is blown way out of proportion. I’ve avoided stocks in the past where this was a real possibility, but I see no such concern here.

With Pentland owning c.52% of the company, they would need 23% of shareholders to commit financial suicide to delist; something I really cannot foresee.

If this was their intention, I think the buyback would be much more aggressive, with dividends being suspended etc… even then, it would take an exceptionally long time, and any huge buybacks would probably cause a share price rally anyway, providing concerned shareholders with an exit route.

Storm in a teacup imo.

The real risk here imo, is us being taken-over with a low-ball offer, of say, £1.20… something I wouldn’t cry too hard about.

This very thing happened to me a few years ago with SCS… 60%+ profit in a morning, from memory. Low-balled, yes, but I was able to redeploy that capital elsewhere.

Rats,

• Simple majority (50%+) gets control or most routine approvals.

• Special resolution (75%+) is required for delisting, going private and compulsory squeeze-outs.

If Pentland get to a 65%-70% stake, then I’d say it’s time to start worrying.

At 52%, I don’t see how they can shaft shareholders, personally, and yes, any offer (from Pentland or anybody else) would realistically need to offer a sufficient premium to the market.

If Pentland were looking to bid for the remaining shares, surely they’d have done it by now in the 70’s or 60’s?

Apendragon,

Remember when you were short on PETS at around £2 a few months ago?

Apendragon

Posted in: PETS

Posts: 398

Price: 200.20

Strong Sell

Retail on its lst legs

14 Jan 2025 07:44

Oh dear more bad news. 180 by TU??

Has it hit 180 yet? Was £2.66 the last time I looked a few minutes ago.

Ironically, lemons, much like shorts, often get squeezed.

Interesting take on the technicals though. What’s your star sign?