Member Info for MarkBellUK

Good finish to the week; I thought we might pull back a little today but there was an influx of buyers nearing close

>If the belief in StrikeX's technology and potential is so strong why write off the investment as worthless?

It wont be written off as worthless. CMC will get full tax relief on the impairment loss and the value of the asset with be reflected as an intangible as its software. Quantifying the value of an intangible asset, in this case software, is notoriously complex so offers an opportunity to offset tax whilst adjusting its value yoy to suit. Remember they've swung into profit of £49.6m from a £2m loss so the timing of the write down is perfect

Yes written off for the purposing of tax via an impairment loss, but it doesnt mean they havent incorporated the technology (the Group continues to support Strike X and its strategic objectives)

I think its more wishful thinking (you could argument mine is but its backed by fundamentals)

More to the point seldom have a seen a double broker upgrade for a stock to then pull back circa 16% over a week!

They also need to be aware it could go back to where it was in April 2021 @ 559 and some given the complete restructuring of the business.

I keep forgetting to mention the blockchain pot CMC has cooking the background

Toli what makes you think that from the book? Pic here

https://ibb.co/BrmvjWH

I dont see it? Book is still sell weighted?

The thing with CMC is, just as quick as it drops it reverses. The question is when not if IMHO. I just sit it out rather than trying to trade it as painful as it can be/is

The problem we now have is many people are still holding a significant gains given the exponential rise in price this year. Couple this with a general panicky and volatile market and some will opt for the perceived safety of cash.

My focus is on the 10 million+ Revolut users of which 650,000 activity trade and will do so via CMC as of 2025. ASB also have 1.5 million customers but Im unsure on there trading %...thats on top of this years numbers which were superb compared to last

CMC Markets (CMCX) has bounced back from a tough period in 2023, with the return of volatility turbocharging profits.

The trading platform grew net operating income by 45 per cent to £177mn in the six months to 30 September. Trading net revenue – which comes from transactional spreads, commissions and certain financing charges – rose by 50 per cent to £131mn, and CMC noted strong performances from both its institutional and retail segments. While active client numbers declined year on year, this was offset by a 60 per cent increase in revenue per active client to £2,984. Management attributed this to a bigger pool of institutional and high-net-worth investors.

Meanwhile, high global interest rates drove income from client cash balances and the company’s own funds up by 46 per cent to £23.4mn.

Profit before tax came in at £49.6mn, compared with a £2mn loss this time last year, and the dividend more than trebled to 3.1p a share.

Despite this impressive rebound, however, shares in the company fell by 16 per cent in the aftermath of the results. It is possible that the market was disappointed by a lack of guidance upgrades. CMC said it still expects to achieve net operating income of £333mn this financial year – in line with last year. Meanwhile, operating cost guidance remains unchanged at £225mn.

There was also a clear slowdown in trading versus the second half of the last financial year, when revenue jumped. However, staff costs fell compared with the second half of last year as a result of job cuts, and total operating margins were broadly similar at 30 per cent.

According to FactSet estimates, CMC trades on a price/earnings ratio of 13 times for this financial year. Peel Hunt has published a more optimistic set of profit forecasts, and has the group on closer to 11 times, following today’s share price fall.

Peel Hunt said this valuation “does not look overly demanding” given the potential for continued revenue and profit growth over the next few years. The broker also flagged recent deals with Revolut and ASB Bank in New Zealand, which could boost revenue in the future.

We broadly agree with Peel Hunt’s conclusion, but stress that CMC Markets – together with its rival Plus500 (PLUS) – are notoriously volatile, and visibility is poor. Buy.

Last IC View: Buy, 301p, 20 Jun 2024

“The stock market is a device to transfer money from the ‘impatient’ to the ‘patient’.”

Warren Buffett

I too have circa 280 as support but we have gone into oversold pretty quickly today!

RSRCH: Panmure Liberum "PANMURE LIBERUM: PayPoint: Progress to £100m EBITDA"

fyi Excellent broker note available on Research Tree

CMC Markets Plc : Peel Hunt raises target price to 360p from 330p

CMC Markets Plc : RBC raises target price to 350p from 330p

Jefferies raises PayPoint price target to 928 (722) pence - 'buy'

Ridiculous drop, I suspect simply people taking profits on news. Great time to top up

ASB Securities, launched in 1999, remains the largest online broker in New Zealand in terms of trading volume and active customers

Longtimeinvestor

Price: 608.00

No Opinion

RE: Just sold13 Jun 2024 22:41

Mark

''when these are going back to the £8+ range''

The market will decide that, as it does everyday with the valuation of Paypoint - I am afraid that your statement is pointless as it is not stating a fact, but is written as if a fact..

Sometimes you just gotta laugh at the stock market and buy more!

It will catch on soon enough

Strong numbers and reduction in overheads.

Im sure we will see more on Revolut in Novembers interims. Would be nice to bag more clients who use the API backend like Revolut, but they've already said they are close on other deals

Smart investors dont trade