Member Info for LorenzoLynch

Sol,

It depends on which period of time you’re referring to.

The buyback is underway, and is roughly 66% complete. They’re not going to buyback all of the shares on one given day.

Yes, each day, less shares are in issue, so that boosts the EPS numbers, but at the moment, the share price is benefiting from the buying volume which is being generated by the buyback.

Moreover, the buyback is imo, priced in to the current share price. The market is aware of it, so will have priced it in imo.

Upon completion of buybacks, the share price usually dips a bit as the market knows that buying volume is going to fall, so some investors/traders trim their holdings. Also, there’s simply much less buying volume, so the sales of shares which would have occurred anyway, have more of an adverse impact on the share price than they would during a buyback.

Sol,

Why would the share price ‘go up’ after the buyback finishes?

In my experience, the share price almost always falls when buybacks end, and there’s obviously less buying volume moving forward (all else remaining the same).

Personally, I think there will be buying opportunity when the buyback ends.

Colinco,

I think those points are also valid.

I do think the value on offer is known to many though, especially after Paul Scott’s purchase, Richard Crow’s purchase and JKR (albeit much lesser know) also being invested.

The former two have worked in The City and have sung the praises of Card Factory in various podcasts.

I agree that it’s not really on too many radars though, as retail is so unloved, as are U.K. small and mid caps, and there’s so much momentum, positive news and volatility in other sectors.

Let’s not forgot about the technical ‘analysts’ as well who will be waiting for the chart to tell them something - see the breakouts from recent years for what appears to be evidence of this.

I’m very relaxed about holding this. My main issue is that I keep finding other opportunities, but when I compare them to my core holdings (this, JD Sports and BRCK), they really don’t compare in terms of value imo.

Bhaveen,

Tbh, I think there are several reasons (many of which I expect to subside fairly soon):

• it’s being punished indiscriminately by the market as it’s a retail stock (rising NI and NLW).

• other retail companies are struggling (this tends to decline as if its a straight read across, when it isn’t imo).

• huge capital outflows from U.K. funds = forced selling from institutions and (arguably more importantly in our case), a lack of free cash to purchase shares in new holdings.

• lots of U.K. investors have had their heads turned by the U.S. stock market rally and are now deploying their capital over there in the euphoria. I expect this to cool off very soon, as a lot of US companies are starting to post poor results.

The catalysts from the above are obvious, but something which is being overlooked: an end to the Ukrainian ‘war’ could result in Russian energy again being freely available to the U.K., causing energy prices to fall, thus enhancing the margins of many companies (especially retailers and manufacturers).

As the growth strategy unfolds, I also expect some positive news from the company. Moreover, a buyback? Increased dividend? A move to a net cash position? Positive contributions from acquisitions? There’s lots to like imo.

I think all of the risk are priced in 5 times over, personally.

DYOR.

Bhaveen,

It’s laughable that this has fallen by more than B & M bargains today even though they’ve just released a profit warning and it’s just another day at the office for CARD.

Remains my largest position.

Sol,

I think there’s about £8.7m of the buyback outstanding, which would equate to approximately 3.6 million shares being bought back if the share price remains stable and they keep buying at a reasonable pace before the deadline.

Pompey,

I’ve been looking at other stocks, so that has been a bit off my radar.

Thank you for input. I’ll review it when I get chance.

Also, well done all on the recent rise!

There’s lots of like about On The Beach, but imo, it’s a case of being the right company at the wrong price. In my view, the company is priced to perfection, with very little risk priced in, but I completely understand the case for holding this long-term.

There are some financial points I could highlight e.g. the share-based payments (this isn’t accounted for in the adjusted profit numbers).

Key risks which have deterred me from investing at this time and current share price (mostly from page 54 onwards of the annual report):

• The court of appeal judgment on banks such as Close Brothers and Lloyds focused on ‘hidden commissions’. If upheld by the Supreme Court, I think the legal implications could spill over into other industries.

• If a major airline collapses, then OTB are liable and they have to refund customers within 14 days or replace the holiday package. I understand that OTB has dealt with this previously with Thomas Cook and Monarch, however. A recession or the like could quite easily cause another airline or two to collapse imo… as could an air traffic incident, like those we’ve seen recently near Russia and in the USA.

• “some airlines reserve capacity for their own packages and can charge more for seats which are purchased via indirect bookings”, such as those from OTB. Could we see an increase of this from Jet2 and EasyJet etc? Also, with the recent success in the market, surely competition will soon be on the rise?

• Falling interest rates surely cause a hit to finance income for OTB?

• Regulatory issues, especially those relating to hidden commissions etc.

Personally, I think the other risks can be mitigated quite easily, but should any of the above events transpire, I would expect the share price to decline rapidly. Personally, I don’t think any of the above risks are priced in with the share price currently being approximately 18x-19x adjusted net income according to the numbers I’m looking at (will check the AR shortly).

Just my thoughts, and would love to hear a case for the fair value of the company being higher than the current share price.

If all goes well of course, there could be some serious upside here over the next 3 years, but I can see it heading the other way just as easily.

All just my opinions, do your own research.

Update:

I listened to the latest investor presentations, did some deeper diving, analysed the financials in greater detail and put together my own forecasts.

Long story short, I think the CEO’s ambitions are very achievable, and even with a fair margin of safety, there’s some serious upside in my opinion, and very little downside.

I like how simple, realistic and cost effective the growth strategy is, and I expect this create a twin-engined effect alongside sector tailwinds.

I opened a position recently and I topped up today.

Any Norcros holders here? I owned it alongside Eurocell prior to selling both just before they tanked.

I’m very interested to hear any of your thoughts on it.

Thanks all for the balanced view. I think there’s merit in all of your arguments (a rare surprise on a bulletin board).

Dave,

A major concern I have is in regards to the amount of options being exercised (and then sold) .

The diluted EPS forecasts in the broker notes are a bit of a red flag to me.

On the contrary, there’s certainly lots to like!

Disco,

I respect your honesty, and I understand why you view Yu Group the way that you do.

I personally have no idea how sustainable these earnings are, and I’m struggling to find any decent info on this if I’m honest.

Is there any way of forecasting the impact of declining energy prices on Yu Group? I would expect some margin decline, but I wouldn’t expect a complete margin collapse.

That said, I wouldn’t be shocked if margins (and the share price) did collapse briefly. I wouldn’t be remotely surprised if this is £5 per share in 2 years or £30 per share…. But this is probably more a reflection of my lack of understanding, than of the reality.

Will the hedging agreement with Shell not ensure that margins remain fairly steady?

DiscoDave,

I’m not invested here, but I’m starting to research the company.

Just out of curiosity, I noticed that you only post on this BB. Why does this stock appear to be the only stock which you are interested in? And do you own any shares in it?

My main concern is how sustainable these earnings are moving forward, if you or anybody else could advise, it would be greatly appreciated.

Shaperite,

Do you genuinely think that CF is going collapse, because a rival company has started selling inferior products, in inferior stores, with inferior customer service, with under a significantly inferior brand name whilst fighting against Card Factory’s infinitely superior economies of scale and superior management team?

Honestly, your original post is one of the most ridiculous that I’ve ever read on a bulletin board, and that’s really saying something.

If you truly have this stance, you can easily refrain from investing in Card Factory and stick to your career in the circus.

All in my honest opinion.

Findme,

As always with any stock, it depends when you bought it!

If you bought at 1.5p, like GRH, you’d be sitting on a c.250% return, even now (after dire recent performance).

That said, if you bought a much higher share price, you could be sitting on a 100% loss now with PRD…. Well, according to Bold’s calculator you could be, that is… unbelievable.

I honestly can’t believe some people are out here paying bills and investing their hard-earned money, when they don’t even understand what a 100% loss is. Such stupidity fuels me with more confidence in my judgement here.

Dickie,

I’m not expert in this field, yet whenever I ask relatively straightforward questions about why ‘Bold’s’posts here or why ‘Bold’ is so negative, I never get an answer….

Anti-venom simply ignored me when I tried to ascertain his/her motive for posting on here.

Blatant disingenuous posting, in my opinion.

Little Nige might be negative, but at least he seems to have reasons for his negativity and he adds some comedy. He’s also been shrewder with regards to forecasting placings than most of us (albeit 30 of the last 5). Likewise with Jimmy23 (who has, in all fairness, offered many balanced posts).

Wiscos,

Have you seen the share prices of U.K. funds, especially those with smaller cap companies?

The likes of Paul Scott and Richard Crow have covered several funds lately which have had huge (and I mean HUGE) capital outflows.

It might not account for the big drop alone, no, but I think it’s a large contributing factor.

Also, I suspect that many fund managers have seen how CARD have still managed to perform exceptionally well after the interims caused panic in the market, and will now want to open a position, but they simply can’t.

Also, many professional investors will have sat on their hands until Darcy explained the expected hit from the budget, and the company’s confidence in offsetting those costs.

Paul Scott wasn’t invested in CARD until a few weeks ago… I doubt he’s the only City investor who has taken a recent liking to CF.

I suppose we’ll find out when capital inflows return to U.K funds.

Accipiter,

It says there aren’t any reportable open short positions on here. Where did you find this info?

Wiscos,

There are no reportable shorts at the moment, to my knowledge.

Personally, I think the share price is depressed, because CARD is mostly held by retail investors who don’t know their ar**s from their elbows. If a tech (or sexier industry) stock was growing like CARD, it would be £2.50-£3.50 a share imo.

Also (and I think this is the main reason for the depressed SP), most UK funds have had huge capital outflows during the past 6-12 months… which forces them to sell shares in all of their holdings.

If/when the U.S. market corrects (and I expect it to, especially with the tariff trade war), I expect capital inflows to return to U.K. funds, and I expect them to invest heavily in CARD. I’m constantly hearing analysts talk positively about CF, and several of them have been buying shares. Same applies to the likes of JD Sports and many other value U.K. stocks imo.

All in my honest opinion.

Laidback,

I’ll be amazed if this is under £2 this time next year, for a variety of reasons. I expect some serious tailwinds in calendar year 2026, and I expect existing headwinds to subside.

I think the SP will remain relatively depressed (under £1.20) for the coming months, however… and I intend to continue topping up during this time.

Bold,

How can you say with absolute certainty that MOU-5 won’t penetrate a reservoir which contains several TCF of gas?

Please explain.

Also, this is only one small part of the license area. Are you also absolutely certain that there isn’t multiple TCF of gas in the license area?

Lastly, my understanding is that we wouldn’t require multiple TCF in order for this for multibag several times. I think PRD could 10-bag, quite realistically. Even Ireland could make it multibag a few times in my opinion…. As could MOU-3… and so on.