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With this morning's continued rise, SP now risen 50% in 10 weeks since March 13th announcement, well done to anyone who bought in at the time, if you are looking to sell - which I'm not - my advice is not to sell for quite a while yet, the TERP price of �2.24 will be breached in this financial year.
I was in Philly last week, same experience as recent work in UK, long days, didn't want restuarant food, got my food to go at local convenience stores and this product is literally hopping off the shelves in US. Unfortunately for GNC SP, our stockbroker and hedge fund friends obviously don't rely on food to go, but if they did some real research at the frontline, their views might change. GNC has the same predictable demand guarantees as undertakers and barbers, so when the strategy execution begins to deliver in US, we will all look back at how insanely cheap this SP currently is and at how stupid the analysts were in not recognising this. The cautionary note is that if the executive team don't deliver the strategy in the current financial year, definitely time to join Wenger on the sidelines.
Book your ringside seat for May 22nd, anything remotely positive and I expect TERP levels will follow swiftly. Given no more dirty linen has appeared since March 13th - and the stains weren't strategic - I personally would not like to be holding a short position
CEO has taken up 47k shares from Scrip offer at stg2.17, and Chairman has also taken up his Scrip allocation, another loud and legal insider statement about where the company is going, both have taken a hefty paper loss, may explain the recent small rise from what is hopefully the SP floor. Im assuming the May trading statement will still be published even though unplanned statement issued in March, that will be the key next date. CEO expecting the results to be in line or better than the March update imho.
Was in UK this week, long days, didn�t want to eat out all the time, used M&S Simply Food outlets a few times, all shelves packed with GNC product and selling fast. When GNC finds the right format for US operations, I may not have to work many more long days
SP is in such a surreal space, I'm not qualified to explain why, a part of me is praying for a bid to appear, but then I'm thinking that if it did just to take advantage of the current crazy weakness, it will be rightly rejected out of hand by the board, but it would at least set a SP level based on some financial logic. The strategy is good, the execution has been poor - does anyone know a US based player in this food to go space who is top notch at managing supply chains ?
Yes, on the call today, CEO confirmed the dividend is not changing. Still forecasting �100+ million in operating profit for FY18, the EPS guidance pull back is 6%, the SP pullback today is 30% from what was an already deflated SP to begin with. At this stage, I�m expecting the next season of Netflix �Dirty Money� to feature the funds who have attacked GNC
https://shorttracker.co.uk/company/IE0003864109/ is a listing of the GNC shorts, about 10% of shares, maybe 70 million in total, about 15 million shares bought this morning out of 23 million traded already according to LSE, and maybe a lot of big positions being settled but not yet showing, so hopefully this "event" will see the majority of shorts finally leaving the stage and allowing the SP to trade on it's fundamentals. It's a courageous call for the board to come out with this update at this stage - on the call this morning, it was mentioned that news like this would usually come out in May with the normal trading update. IMHO they have done this to flush out the shorts, but they could loose control of the situation very easily. While I still don't doubt the business model, the whole SP saga over the past year is totally unchartered territory for GNC as a company, the board really has to step up now.
New RNS, trading update, Cheltenham might have been a better option, I did top up! No idea what way SP will go today but it could be ugly. The update is not saying anything negative about the underlying business, the restated guidance is as a result of one off proactive steps to manage capacity and costs in US. Coveney is definitely on notice if restated guidance is not achieved.
Anyone got a view on the latest RNS, Melqart Asset Management (UK) Ltd -"an event driven hedge fund" - have built a potential 6% stake using CFD's. I'm not an expert on derivatives, but in the last week we've now had a value investor increasing stake and a hedge fund taking a punt. I've said it before, if GNC's peers are not running the rule over GNC at the current SP, they are being negligent, I would not be at all surprised if a bid appears. I've never been a short term investor in GNC and I'm already well above water with my existing GNC shares over 20+ years, but I'm getting seriously tempted to top up. Given the week that's in it, it's either this or Cheltenham
Deadline early next week for selecting cash or shares from last dividend before AGM, scrip offer much higher than current SP, I expect to see all officers take up the Scrip offer like last time and confirmed in RNS’s, that’s all you need to know about the eventual trajectory for this SP
Now this is opinion, not advice. CEO reconfirmed commitment to dividends at current levels, payout is 40% of earnings, which is 5% yield if you bought in recently. The dividend alone is one reason why I’ve never sold over 30 years. Second, the market will eventually believe what the company is predicting and the SP will respond accordingly, could be at least 6 months or next interim. Third, if a smart player does make a bid, the SP premium the board will insist on will be very sizable. Only upside imho.
Just reading now some of the on-line press reports from AGM, wondering if I was at the same meeting ! although the only folks I saw writing looked very young, so I'll forgive them. Bottom line - yes 2017 had TACTICAL short term operational issues, and all of these are fixable - although the ERP write off is truly a horror, an ERP deployment for a company with a simple bill of material and master data ( sambo's ), short manufacturing cycle times and practically zero finished goods inventory because of short shelf life should be paradise for a competent supply chain organisation. However you can buy/hire this skill. Don't confuse tactical with strategic issues. GNC excels in strategy and is producing the financial results. This is what makes the SP disconnect so hard to understand.
Attended the AGM today, chairman got his retaliation in first by acknowledging 2017 operational speedbumps, CEO remuneration and SP volatility. Long Q&A session but no-one asked about SP performance, despite company loosing �120mln in value during the morning of the AGM. I was going to let rip about SP but decided against it, the future outlook is compelling and positive by any measure you pick. As I've said before, this SP doesn't follow a conventional trajectory. I'm at a loss to understand the reasons why the SP is performing the way it is currently - even the hedge fund short positions make no sense unless there is something else going on. My biggest fear right now is that a US buyer is in the background waiting to pounce, GNC has become a significant early stage player in the US market and is attracting interest - and the US don't do friendly interest, they move quickly, ruthlessly and will leverage all market mechanisms which are remotely legal to drive the hardest bargain possible. I hope the board has a clear plan on how to defend the value of the company, it would be such a shame for excellent strategy to fall victim to "the smartest guys in the room".