Member Info for LorenzoLynch

Apendragon,

Thank you for taking the time away from your lemonade stand to post on here today.

Thanks to your insight, I now realise that it isn’t about earnings, and I should instead be shorting undervalued, globally-diversified companies which have a strong competitive advantage.

Apendragon - “it’s not even about earnings”

🤣🤣🤣

I’ve heard it all now.

Unbelievable Jeff.

Somebody tell Warren Buffett he’s got it all wrong.

In order for JD to be taken private by Pentland, they would have to make a bid and this bid would have to be accepted by shareholders.

90% of shareholders would have to accept the bid.

Personally, I can’t see them crossing this threshold with an offer of under £1.20-£1.30, so why the panic over this?

I can’t tell if you some of you are being sincere, or trying to install FUD to bag some more shares on the cheap after selling into the recent rally.

At the very least, things need to be kept in context.

I topped up today (a fairly significant sum for a peasant like myself).

Do you own research and don’t let anybody on these boards sway you… certain entities want these shares on the cheap (even JD do, given the buyback).

I would expect that lessons have been learned from last year’s repeated misses on consensus estimates. It would make sense for targets to be modest this year, especially given the buyback.

Even so, Imo this is priced as if EPS will be 7.5p or something silly like that. I expect earnings to be much higher than this, personally.

I can’t believe how emotionally tied some of you are to short-term price movements.

If you’re not selling, why do you care?

If you’re looking to buy more, isn’t this a gift at these prices?

Yeah, some people have made a few quid by trading this during the recent rally… but so what?

I was massively overweight, so I had to trim quite a few shares near the top, but imo, these shares are worth much more than 93p a piece, so I remain invested and I’ve recently topped up again (win-win for me).

You own part of a company… I think it would be prudent to remember that, and to focus on the asset which you own.

If the market didn’t price assets incorrectly, there wouldn’t be any opportunities for significant returns.

Long may the volatility continue (until next autumn 🤞)

You haven’t lost a penny until you lock that loss in via a sale.

I’m going to continue ignoring the noise, and if the market wants to sell me some more shares at 70p, ‘in the 50’s’, or ‘3-4p’, I will gladly oblige.

Do what is best for you and do your own research. Ignore others (including me).

Fundamentally, there are so many similarities between the Buffett’s and Lynch’s approaches.

My strategy encompasses the things which they had in common: contrarianism, value, competitive advantage, simple businesses, strong balance sheets, manageable borrowings, emotional control, strong returns on capital employed, sufficient diversification (this takes many forms; not simply buying stocks for the sake of it) and staying within one’s circle of competence.

With the above rules in place, I think it’s impossible to perform poorly in the long-term.

I think it’s prudent to focus on the similarities between the best investors, and completely ignore the differences.

Rats,

Dark arts and black swans aside, I see a clear pathway to that outcome, personally.

Obviously, I have no idea what the board will choose to do, but why repeatedly publicly mention that they’re open to the idea of floating JD on the NYSE (if the stock doesn’t re-rate), if there’s no intention to do so?

Another round or two of buybacks in the interim would do nicely.

A dual listing is another possibility, but I wouldn’t expect such an aggressive re-rating in that event as U.K. investors seem to love selling up on the cheap for a quick buck; as recently demonstrated here. Maybe a p/e of 16-19?

Apologies, that should have been addressed to Beo…

Anyhow, an AI response:

Sure — here’s a brief summary of the key requirements:

🏢 To Take JD Sports Private (by Pentland Group):

• Scheme of Arrangement: Needs 75% of voting shareholders (by value) to approve — Pentland (with 55%) still needs support from others.

• Takeover Offer: If Pentland reaches 90% ownership, they can force the remaining 10% to sell (squeeze-out rule).

🤝 If a Takeover Approach is Made (by someone else):

• Pentland’s 55% gives them veto power — they can block any deal they don’t support.

• The board must act in all shareholders’ interests, but Pentland effectively controls the outcome.

✅ Pentland Can:

• Block third-party takeovers.

• Launch their own bid to take JD Sports private.

❌ Pentland Cannot (on their own):

• Force a buyout without reaching 75% (scheme) or 90% (takeover offer) thresholds.

• Approve a third-party takeover without minority shareholder support.

In light of the above, I can’t see this being taken over on the cheap and I think it ends up on the NYSE eventually, one way or another.

Smokey,

If that was the intention, I think they would have swerved some of the recent acquisitions and instead opted to use that cash for buying back shares in an aggressive manner. Don’t they need to own 75% to take it private? It’s not something I’m well versed in.

That said, if the share price remains at these low levels for too long (something I really cannot imagine with the tailwinds on the horizon), your theory makes sense in the longer term.

I do, however, think a takeover in the short-term at say, £1.50-£1.60 to take it private could be on the cards from say PE, so that they can re-float JD on the NYSE just after the World Cup earnings are shown in the income statement.

Management have mentioned moving to the NYSE on more than one occasion now, so I think it will switch over when the market’s appetite is right for this type of company (and once earnings are cyclically higher).

Taverham,

As I said on here previously, I believe the plan is for JD to:

1) experience a nice boost in earnings from the club World Cup, followed by an even bigger boost by the real World Cup next year. This, I believe will be especially beneficial for Hibbett (and I think this was actually one of the main reasons it was acquired before this boost in earnings).

2) In autumn 2026, leave the LSE and join the NYSE, causing it to rerate to say, 22x - 25x those inflated earnings.

This is when I plan to sell my shares.

22 x (say) 15p = £3.30.

Savaloy,

So these segregated funds (or the TFRS) have to be deducted from the cash pile on the balance sheet, right?

It’s why I sold out of PLUS, personally.

Can’t for the life of me understand the discussion about the dividend, but if we assume an EPS of say, 12p+ moving forward, the company could quite comfortably pay out a dividend of 6p per annum….

This would equate to a yield of around 7.5% with a dividend cover of 2x.

So yeah, if the growth opportunities dry up and this becomes a dividend play, I think the stock would rerate to around £1.50 (4% yield).

Some info (AI generated):

FIFA projects that the 2025 Club World Cup will attract over 3.7 million fans across 63 matches in 11 U.S. cities. This figure includes both domestic and international attendees, though a specific breakdown of overseas visitors hasn’t been disclosed.

With an average stadium capacity of approximately 57,500 seats, the total number of tickets available for the tournament is estimated to be around 3.6 million.

….

Could be one or two sportswear sales, no?

Rats,

I spoke to staff at one of the branches in a major U.K. airport recently, and we both reached the same conclusion: it’s very over-staffed.

He did explain that there are incredibly busy parts of the day, but it’s mostly an absolute doddle working there.

Reducing staffing costs is certainly a lever which can be pulled imo, and it should be!

I’m no expert in these situations, but it sounds to me as if an institution are trying to apply pressure for the dividends and buybacks (really haven’t had much time to follow the situation btw).

On that note, I expect to see a lot of institutional buying once dividends are reinstated, although for the betterment of the business I wouldn’t rush into this personally.

I wouldn’t bank on it being a slow burner to 25p though. Each positive trading update seems to come as a surprise to the market, and now interest payments are much lower, I think the next update could be beautiful.

One thing I love about how this company has performed in recent years is the consistent improvement. It seems to be an exceptionally well ran ship.

Smokey,

Imo, the main reason it’s still trading as such low levels is because the market feels like it missed the boat, and is now hoping for low entry again.

It may come… it may not.

Also, I think investors are often reluctant to buy a higher prices than others recently paid, and momentum traders will have jumped ship in the mid 90’s.

I imagine that there is some serious money waiting on the sidelines here for either a rally, or to buy up any dips…

I topped up on the bell this morning.

As suspected, a flash in the pan.

People seem to think that Presidents alone run countries… they don’t.

They’re mostly a figure head, or in the USA’s case, a figurehead + the ability to usher in certain ‘executive orders’ when they want to play dictator, and a few other duties.

As stated by JFK shortly before his assassination, USA is mostly ran by people who are not elected. Trump has also alluded to this on many occasions, and ended up losing part of his ear, coincidentally.

I digress, but something for the 50’s, 60’s, 70’s and 4p crew to think about: stocks don’t know that you own them.

Surprised that this hasn’t absolutely rallied…… yet.

Pasty,

Does that mean 70p or 79p? Just out of curiosity.

The cloak and dagger de-ramping crew seem to be in a serious panic/frenzy today…

One can only speculate as to why.

One might suspect that they must have some serious money on the line here, and are hoping for the share price decline with every fibre of their being.

Unlucky fellas, and yes, we all see straight through you. Whatever your hidden agendas may be, your execution appears to be even worse than Paul’s.

LWHL,

Overall, I think swerving companies with pension deficits is usually the smart move... Just look at Reach, for example. Ironically, I rode it from 60p (ish) to £4 when I was starting out, because I didn't understand how the deficit was impacting the cash flow statement (I thought it was accounted for in the income statement).

In Reach's case, the market was expecting the pension to move into a surplus, but it didn't materialise, but fortunately, I'd jumped ship by then.

As for the £10+ valuation, YOU isn't worth this now imo, but if the management teams targets are met, I can see this trading at £15+. It's a big IF, naturally, but many of our competitors appear to have shot themselves in the foot with fraudulent data etc.

For me, it's worth around £4.80-£6 at present imo; depending on if they hit consensus estimates.