Member Info for Mortality

Consumer cyclicals will bottom about 6 months before UK interest rates peak out. Same every cycle pretty much. Market is forward looking.

I think THG shares were up 80pc YTD whilst Asus shares are currently down 27% YTD.

I'm guessing of THG put out these results with the shares down 27% YTD the price would be roofing jt today.

Basically some positivity is priced into THG and nothing but negativity at Asos

I'm of the same view. £8-10 on the restructuring alone. £15 when rates start coming down and market starts pricing in cyclical recovery in growth.

If they had been missing forecasts so much they would have had to announce it to the market by now in the form of a profit warning. Like they did last year and 2019 I think. Pretty sure listing rules require you to disclose such bad news when you have it.

The lse is truly is a terrible place to invest. I have about 75% of portfolio in US stocks. The difference is stark. The UK has always been pretty lacklustre as long as I can remember. However, more recently its got really bad. Asos on 0.1x sales is pretty bad, but there are sooooo many companies, which aren't bad businesses on very attractive valuations.

... but I will avoid selling my US stocks to buy more UK stocks. You know why... cause the UK won't change anytime soon!

Forget the brands for a moment. Capital expenditure (software, warehousing, automation) in 2019 was £220m, 2020 was £116m, 2021 was £150m, 2022 was £180m, and in 2023 will be c. £75m. That alone is £741m of investment into the business / platform. That value neglects all the brand value built up from acquisitions and investment into sales and marketing.

Why wouldn't Mike Ashley be interested? He could buy the business at the current price based on the capex from the last 5 years alone, and get everything else for free.

Stand back a little. The shares have felt like they've moved a huge amount but for 5 months they have bounced around 4. Not the end of the world.

Lets see. Lots of company's are coming out with pretty patchy trading statements at the moment and shares are so low they aren't doing much. Usually because they have already been absolutely savaged. Asos might be a little different though on account of its balance sheet.

Marshalls, Fevertree, Keywords etc. etc.

Shein.co.uk web hits were also down 12% last month (same source) to put things in context.

Often in cyclical or temporary downturns the market frets that there are permanent structural issues going on.

This is probably no different.

Company's are obliged to release material deviations from results as quickly as possible. This is to avoid possible leakage.

The fact they did this on the 9th last year shows they have the results by now. The fact they are choosing to release them on the 26th indicates no material deviation.

9th September they warned last year.

11th September now. I guess if they had bad news to share with the market they would have had to release it by now.

Of course, but the facilities would be closed or reduced as they come due. The market would largely ignore the debt at that point.

I think consensus is for 160m net debt by 2025 with 80m ebit.

Hopefully management can demonstrate a turnaround in the next 18 months. Shares go up towards £8.

Another 20% placing at 800m raises the 160m to go debt free. This wipes out all those interest costs.

A lot of this is self reinforcing. A low share price means they can't raise equity to clear debt easily, which in turn worries investors, and forces the share price down.

The same will work in reverse. That is why the turnaround is so important.

The only thing that changed was management ballooned inventory £500m which we have had to write a large chunk off. Nick Beighton really was a plum. That £500m is more than the entire market-cap now lol.

I was joking :). Mainly pointing out that it is just as easy to jump to an extremely negative one as a positive one. Loss aversion leads people to worry more about the negative one that the positive one.

Ive worked out why they delayed the trading update... seriously.

Management are so busy doing due diligence with Trendyol, Mike Ashley and 20 private equity firm about a buy out at £15 that they need to push back the trading update.

I mean who cares about a trading update when the business is going private. The board have told them to do presentations to all these interested parties. Basically doing a beauty parade as we speak. Trying to find out which bidder to select.

You can almost smell the panic from the people that sold yesterday. In the calm light of day they realise it was a pretty insignificant reason to sell... and all the many reasons they bought in still hold.

I used to work in equity research (buy-side). I had a lot of interactions with the sell-side analysts. In most cases these 'analysts' will form a qualitative view on a stock. In this case Goldman's analyst wants to be neutral (i.e. sitting on the fence). Usually there are internal rules at these banks to keep their price targets within a range of where the price is now... you can't have an analyst with a neutral rating having 50% upside.

So... the analysts just fudge their models a bit. Move the DCF valuations around. Maybe increase or decrease the valuation premium or discount vs. peers. Sure enough, price target comes down to within the acceptable range.

Its largely nonsense. The time to take note is if the analyst spoke to the management team before putting the note out, and in the same note move their earnings estimates down. Then you should worry a bit that there is a downgrade coming. Maybe management gave them a steer.

I also found it odd they put a date for a trading update up. They don't usually do a FY update.

So management must have changed their reporting schedule. I agree with someone else's comment... if they were clearly coming in well below expectations they would have reported it sooner. We are well past their FY now.