Member Info for LorenzoLynch

Should I report Paddy, Pokerchips and PFen missing now, or should I give them 48 hours? Still waiting on stock suggestions from the above gentlemen, as expected. It’s still early days of course, but I’m enjoying this little taste of what is to come

I really appreciate it when people scrutinise my holdings, but some of the blatant de-ramping on here is beyond a joke. Can you guys please suggest some stocks to the rest of us that have higher potential upside than CARD and less risk, cuz we’re all clearly clueless. God knows why you’re still wasting your time posting here, relentlessly talking about the potential RI like it’s the end of the world. You’re actually embarrassing yourselves. Yes, we might see another dip at some point... isn’t that the norm for every single stock that’s ever floated on any exchange? Absolute donuts

PFen,

Talked up? By who? I’ve only seen objective posts or overly pessimistic posts on here recently, albeit I don’t check the BB too frequently. If you honestly think the stock is doomed and CARD are going bust, why don’t you cut your losses and sell now? Isn’t 30p per share better nothing? Or is all hope not lost? None of us have a crystal ball, but I’m invested here because I see it as an undervalued turnaround stock with a good growth strategy. The fundamentals look acceptable to me and I think an equity raise will be suffice to keep the company alive. Just look at the money that has been raised elsewhere during the past 9 months or so; CARD has much better prospects than most of them. I know nobody seems to care about profitability in today’s market, but I do, and this is usually a very profitable company for its market cap. If I had the means, I’d buy the whole company today as I’m confident that I’d make my initial investment back within the next 5 years, so why would I not invest in the stock?

If I’m wrong, so be it, I’ll fall on my sword, but tbh, I feel confident in my analysis. I only hold 9 stocks atm, so I don’t take buying stocks lightly. I let pessimists cast doubt into my mind when I invested in Reach @ around 55p... I won’t be making the same mistake again

No negative changes to the fundamentals and generally positive changes on the Covid front, yet the share price has fallen to 33p... A nice buying opportunity imo, if you’re looking to hold long-term and believe that the company will survive. I didn’t foresee it falling beyond 35p again, but I’m glad it has done.

Personally, I think the main the reason for the share price remaining depressed here is that so many CARD investors are basing their views on price movements (like PFen does) e.g. ‘the share price has dipped again, I must be right in thinking that the company is finished... I better sell’ or ‘the share price has dipped again, so I must have been wrong. I better sell, and if things pick up, I can buy back in again anyway’. I don’t think it’s a coincidence that CARD swings the way it does based on nothing more than wind direction. Btw, that’s not a criticism PFen, it’s just an observation. If I was holding at 95p or so, I’d be frustrated as well, and if you’re already heavily invested, the most prudent strategy would be to wait until the turnaround is well underway.

CardInvestor,

When me and my dad (another CARD investor) saw Moody‘s salary raise in 2020, we were equally concerned. He evidently only cares about lining his own pockets. Our hypothesis was that he delayed employing a new CEO for the sole purpose of increasing his salary (whilst implementing nothing beyond basic cost cutting measures; something I imagine the average store manager could have achieved for peanuts). Whenever I criticise ‘management’, it is mostly Moody that I’m referring to. I can’t even comprehend the level of his short-sighted greed, especially in the current circumstances. I’d be far more keen on this company if he wasn’t a part of it

Carllapos,

I agree. For me, CARD isn’t a screaming buy today, nor is it a strong sell. Depending on one’s exposure to the stock and risk appetite, I think it would be most prudent to either hold, trim or buy the dip (in tranches)

Some very useful posts on here today, as always, but what did some of you expect from today’s update? Is it news to you that there’s a pandemic and stores have been closed? Were you unaware of Card Factory’s current inability to throw millions at an ad campaign for their online services? One or two of you seem to have been expecting that even though you allegedly think the company is on the verge of bankruptcy. Now, I’m not sure how, but according to the RNS, net debt has fallen.

The real negative in that RNS was in regard to breaching covenants later month imo. While such a thing is obviously better avoided, are CARD the only company in this situation? Far from it, I would imagine. Does anybody know what impact a breach of these covenants is likely to have? With the levels of support we’ve seen this from govt, lenders etc, I would be surprised if CARD weren’t able to negotiate a extension, or the like.

Overall conclusion: they’ve weathered the storm effectively, but could have done so much better if they had a stronger balance sheet and better management at the start of all this. That said, if they had done that, the SP would likely be c.£2 now imo, hence the opportunity to purchase shares here on the cheap; you’re not going to purchase a perfect company with a p/e as low as this without getting your hands dirty, unfortunately. If that exceeds your risk tolerance, you could always become a shareholder a few years down the line. CARD have had a poor year due Covid-19 and lockdowns, not bad management or a failure to market their online services effectively

I'm not overly surprised at the U.S. sell-off today. You can always rely on British investors to back companies with solid fundamentals and U.S. investors to pump & dump good quality, profitable companies while they 'buy the dip' on fraudulent, debt-ridden, loss-making pennystocks on their CFD accounts, because 'it could go to £1,000,000 per share if the dinosaurs come back'. Yes, $1,000,000 'per share', because market caps don't exist in U.S.A judging the valuations of many of their stocks.

I might be wrong, but if I was to hazard a guess based on what I've seen from most U.S 'investors', I reckon many of today's sellers will be back in when this eventually enters bubble territory.

How do you know this? Are there any other reasons for the sudden rise. I've been contemplating opening a modest position, but I don't feel like I can accurately predict future earnings for MCL. Any guidance would be much appreciated, cheers

TomBeef,

Exactly my thoughts. January was always going to be a quiet month for us anyway. Opening back up a week or two before Valentine’s Day would have been ideal, but it looks like we’ll be relying on online revenue instead now. Our priorities need to be keeping costs to a minimum and increasing our online presence, for now; at least we can control such matters to a degree.

In terms of the share price, I’m not completely surprised that we’re seeing weak hands again, but the part of me that still believes in humanity expected most people to have enough vision to see beyond the next 6 weeks, but evidently, I was wrong. Oh well, it provides us with another buying opportunity. I could be wrong, but I think a lot of today’s sales are due to the expectation that the SP is going to dive. If the next earnings update is positive, I think we’ll see a rapid recovery here. That said, as I’m writing this message, the share price is recovering!

The main thing I’ll be looking out for over the next few weeks is an effective advertising campaign for our online services. If there isn’t one, I’ll start having doubts about the competency of management as there’s no plausible excuse for failing to do so imo

Plymouth and JNix,

I agree with you both. I also think PFen could be right about institutional investors swerving CARD until the dividend is restored. I believe that once we return to (somewhat) normality and the dividend is restored, CARD will start receiving some serious attention from analysts, fund managers and tipsters.

The above recently happened to one of my other holdings when a fund manager highlighted it, causing it to rise approximately 40% with no fundamental changes to the company, albeit that company did (and still does) have a stronger balance sheet than CARD. I still have no significant concerns about this company and I'm glad that they're cautiously riding through the storm whilst keeping expenditure to a bare minimum. I will however, have much higher expectations once the recovery is properly underway.

Merry Christmas all

Ammu,

With the company currently making a loss, operating in a low margin industry and failing to create even decent returns on their invested capital, I can't say I see their cash situation as overly important. Don't get me wrong, I think the net assets are a big positive, but enough of a reason to take this stock to over £2 per share? I doubt it. That would leave absolute no margin for error; which is quite concerning, especially when you consider that over 50% of their current assets are 'trade/receivables'. Will they receive every penny of that? Furthermore, current assets don't quite cover current liabilities, even when those receivables are included. To conclude, there are a lot of question marks here imo, and at to warrant £2 per share, I would expect a much more positive overall picture. I think the current SP is acceptable and I think those invested will probably make a nice profit, but it's not for me right now. If it sees 80p-90p per share again, I'll consider an entry, but until then, I'm happy sitting this one out

Imo: due the underwhelming earnings that are forecast for the company in FY21 according to the most recent annual report.

Revenue forecast for next year is c. £1.2bn with an operating margin of 1.5% = £18m. Deduct central costs of c. £10m and you're left with £8m net income.

@ £2 per share, the market cap would be around £222m. A net profit of £8m would leave GFRD with a P/E ratio in excess of 27.5. I personally wouldn't pay anywhere near that premium for a company that appears to have low growth potential and operates in a capital intensive industry.

I was invested in GFRD earlier this year, but when I ran these numbers, I sold immediately for a small loss just before the big decline. If you do continue to hold, I wish you well. I haven't looked into GFRD's forecasts beyond FY21 btw; you might find value there.

Hi all,

I’ve been invested in RCH for a while now (I bought at 55p), but regrettably, I didn’t invest heavily as I wasn’t overly impressed with the balance sheet and I thought I’d have at least until the end of the year to continue adding at sub-£1, but that seems like a pipe-dream now. I’m aware of the catalyst for this recent surge, but does anybody know of anything negative on the horizon that could take the SP to below £1 again? I’m assuming that some traders will jump ship once the SP consolidates, but aside from that, I’m not really aware of any

I agree that the marketing campaign will be much more effective once these new services are on offer. What sort of timeline are we looking at for the introduction of Click & Collect?

Hi all,

I've been following this chat for a couple of months now and I'd to say thank you to everybody for their contributions. I don't want to repeat what has already been said, so I'll try to keep this as concise as possible. Disclosure: I am invested and will continue to cost average for the foreseeable future.

My main concern prior to the half-year report was net debt potentially increasing, as there is an absence of tangible book value; thankfully, it didn't. I'm pleased at how management are focusing on the long-term future of the company by protecting the balance sheet.

My other concerns: 1) Still no CEO. I expect that this is due to the BOD wishing to keep costs low until there is more economic certainty and opportunity for growth. I see an opportunity for overnight SP growth here however, as a positive announcement could send this upwards at a rapid rate. 2) No T.V. advertising campaign. As people try to reduce their expenses, I think CARD could benefit massively from reminding people that they could save north of a £1 on each card they are buying. They could also advertise the website via the the ads. No brainer imo.

Key positives: 1) When EPS returns to 15p per share or so (FY22 perhaps?), we all know where the SP is going. 2) Lots of turnaround potential, even with a mediocre CEO at the helm. 3) Fantastic moat: valuable brand and who can compete on price? 4) Future growth via new products and expansion abroad & online . 5) Their ability to raise prices without significantly adversely impacting on demand.

Lastly, my theory on why the share price keeps falling is that so many traders/investors are trying to time the market with this stock. There's a reluctance to hold, because the herd keeps thinking/saying 'this is going back to 30p'. It's a self-fulfilling prophecy and won't happen forever. I expect the SP to stay fairly flat until December, unless there is a significant catalyst for growth e.g. vaccine, competent CEO, which is very possible. I'm happy either way. Anyway good luck to all and don't be swayed by the noise; that includes by me, I'm just sharing my perspective.

Oh and Bob... 10p per share? Have a day off mate :D