Member Info for nevergonnaretire

Netz, although any highlight or focus on Asos is good, this news is Horse manure, and says nothing.."Every month, we ask our freelance writer investors to share their top ideas for growth stocks with you — here’s what they said for October!" May as well go down the pub and ask my nan.. am not saying that these so called freelancers are wrong as October would coincide with what Treacle has mentioned before.. a start of a new quarter or cycle, signs of inflation dropping, fuel costs certainly dropping, gas prices dropping from their recent highs, going into the business end of the year for retail, and any hint of asos doing well will mean a decent rerate!
Asos has good levels of net debt, but this has risen to £150million over the last few months, which suggests a burden on Free cash Flow. This is somewhat understandable with inflationary pressures all around us. Asos does have money reserves,(£300-400 million) I am unsure if they have a credit revolving facility. Overal debt is
certainly manageable but with the unknown upon us it definitely needs a lid on through either cost savings or cutbacks in capex..imo Asos will need incoming capital to either proceed with their growth targets (£7billion revenue in near future) by possibly acquiring new assets, or to shore up their balance sheet to weather the storm, how this 'injection' of money comes I am uncertain, but I feel we won't have to wait long to find out either way, October 11th.. Judgment Day.
Maybe I should rename it.. Re-rate Day :)
Best scenario: profit to aug22 £20million ish.. sales for the year in growth, forecasts for growth in high single digits, and margins back around 3.5-4% ish plus notice they have agreed a deal to buy Ted Baker.. then I wake up... :)

The people who keep on spouting takeover possibilities are the same people after making a quick buck in this share, just won't happen... but entertaining this possibility for ten seconds the more likely candidate if this were the avenue imo would be bestseller (top shareholder) to then incorporate into a newco with zalando.. or a company looking for online structure and presence around the world, but are they willing to pay £2billion for the privilege... hmmmm... the cost or synergy savings would have to be huge.

How much is Asos total asset base worth..? Inventory, property, intangibles etc..? I'd say in excess of £2billion. The issue which drags it back is total debt, shott and long term which I believe to be in excess of £1billion.. the short term will need to be dealt with, but longer term refinanced with good conditions, which again comes down to market conditions... lending rates increasing, which in turn puts pressure on margins! This is another key area to keep an eye on in results with a plan to get back to over 4-5%.
Once the uncertainty clears here, then we will see a fairer value.

£900 million..? I think our top shareholder would have something to say about it! How much did they pay for their shares..? Well north of £20 each..Norfolk & Chance comes to mind.. in fact if anyone would put in a low ball offer, it would be bestseller! They hold just below 30% I believe, none of the rest of majority shareholders would accept £9 per share! If a serious offer came, it would have to be over £2billion, but in these conditions surely not.. imo Asos will have to ride out the storm..

Enough drivel, time for breakfast:)

Unfortunately experience tells me nothing is baked into a share price, trying to dig out info is a pain... at the end of February 2022, ASOS had UK£469.3m of debt, up from prerty much zero a year before. However, it also had UK£406.7m in cash, and so its net debt was UK£62.6m in February, its now UK£150m!
According to the last reported balance sheet, earlier in the year, ASOS had liabilities of UK£959.8m due within 12 month period, and liabilities of UK£881.4m due beyond 12 months. Offsetting these obligations, it had cash of UK£406.7m as well as receivables valued at UK£96.1m due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by UK£1.34b. Not sure how much drawdown they have had.. this is where I need more experienced holders to step up and fill in the gaps..
Given this deficit is actually higher than the companies market capitalisation of UK£570m, imo shareholders really should watch ASOS's debt levels at the next set of financials on 11th October and going forward. In the scenario where the company had to clean up its balance sheet quickly, it seems more likely shareholders would suffer extensive dilution, would Asos think that they need to shore up the coffers for the next year or two..?
Is this why shorts are high or getting higher..? I don't believe it's just down to sentiment! The high rate of returns will begin normalising (Boohoo have said the same..) and freight costs are dropping, inflation is and will drop, albeit the fluctuating pound is in no way helpful, and with Xmas coming Asos inventories look strong.
In times like this you look for clues as to how things will pan out, I read the Boohoo update this week and took a lot of positives from it, no cash raise as the coffers were quite full, although caution was stated with guidance going forward, hence the drop to 30p then the large rise back to near 40p..
Next Plc update was another level to Asos, but still their share price got battered this week, this part is sentiment..
I'm keen to see how Asos will shore up the balance sheet, and what plans Asos has for expansion toward the UK£7Billion sales globally, with forecasts on 23 and 24, imo any dilution if it comes will underscore the share price, and finally put an end to the slide.
Also, if this happens, then surely they will use the update in October to state this.
I just hope that the new CEO has been using this quiet time to pull a rabbit from the hat, as having not heard much from him has bot been helpful to the slide in share price, although I'm not sure what can be said.
Do I believe that Asos will slide towards bankruptcy, as some would have you believe - Absolutely Not!
But do I believe the share price could return to the high double digits of old.. probably not.
Still sticking with my £8.50 end of year prediction, and if headwinds subside then £15-£20 certainly possible in 12-18 months.
I'm guessing most on here will be revising their predictions down...
Enough

All the data coming through suggests things are not as bad as what was made out to be, unexpected growth, no recession (yet), inflation easing..
Can only think the share price is temporary and manipulated!

Having read Next PLC update, I personally thought it was one of the best I've read in a long time, increase in sales and profit yoy, The downside is a reduction in full-year profit guidance, by £20m to £840m. It would still represent a 2% increase on 2021 though, and yet current sentiment sent it sliding 11%, plus ASC 7%, probably now thinking more of the same from ASOS.
Both Next and Asos current share price are ludicrous... both well run companies (Next probably better at this time) but sentiment is through the floor, just hope ASC don't have to do a cash raise to see them through the next couple of years which would be disappointing to shareholders given the current share price.

... over on Boo, now going blue!! Possibly using liquidity to begin to close them large shorts! Will the same happen here....

Be interesting to see the short positions over next few days.. with the increased liquidity (buying or selling) surely they will begin to settle up or buy back their positions..

Was after a quick trade this morning, but looks like the bounce is on already...?

Didn't look too clever update, I saw positive signs though, but doesn't look good for share price this morning..doom mongers out in force..!

Am not so worried about the shorts here.. they were higher back in 2019/2020 when share price was multiples higher than now, and within 6 months disappeared altogether, rinse and repeat!
It's the detail from Boo in the morning that's key, the forward looking outlook, cash on hand, I couldn't say when but this share is looking more and more like a coiled spring waiting for the glimmer of light to shine, let's just hope the update is reasonable, ours the same, and that there's no need for any dilution at these prices.. ill take dilution at 15 quid though.. lol

This needs good news.. not sure tomorrow is going to be it, revisit to the 5's anyone..? Or will it be on the back of a Boo rocket into the 7's..?

Are you Jon H..? :)

I agree, Where has all the money gone from last May..? Have they seriously burned through already? Why this stupid little placement / dilution which reduces share price by over 20%? Will they then need to raise in a few weeks again? Insane! Where has the increase in shareholders value gone that was promised in previous meetings?
Do I average down again.. think ill wait and see how this plays out.
Not much volume yesterday even at 0.4.

More and more new blood on here now.. more volume in the share last week or two as well, any glimmer of good news and this pops north.
Double figures way off though imo, more tax cuts to come..?

Interesting bounce and rise this morning.. Will it hold..?

Stock and inventory data... wouldn't ASC benefit from a stronger dollar / weaker pound.. by way of increased margins? Ie raw material paid in what currency? How much is paid in Dollars?
I see the times have leaked some Boohoo data from next week's results.. 34million underlying profit, a truly see much more detail than that and bot sure what (if any) impact it will have on share price..? To me, it doesn't feel as bad as what was made out to be, but devil is in the detail which I can't see..

I have £75k! I suspect many have a great deal more..
I do feel a little top-heavy though, the shorts increasing imo due to Boo.. as you say these 2 shares work in tandem.. it will work its way out soon enough, prob next year imo.