Stefan Bernstein explains how the EU/Greenland critical raw materials partnership benefits GreenRoc. Watch the full video here.
At the start of the year the company had circa $300m of cash, with a dividend declared of $30mil and share buy back of $50m. So at this point if I haven't missed anything the company had non committed cash of $220m. If this year they are going to have $780m of net income and only distribute 60% i.e. $468m, this will leave a balance of $532m. This ignores the lag between earning and distribution. What is the huge excess required for?
nen, given we are both in Fundsmith and Smithson you might like Alliance Technology Trust which is another of my core holdings. Its a bit more volatile but it's long term performance is actually better than Fundsmith. I think a lot of people miss it because its an investment trust.
I suspect a high level of volatility is going to carry on for at least the whole of 2020 aided by the US election in November. All of this time Plus will be recruiting new customers which will help future trading. The high cash balance at the start of the year probably means that 100% of cash will be distributed by share buy backs and dividends. I bought more of these today because whatever way you look at this its incredible value.
Bloomberg have now amended their estimated PE for Plus500 based on 2020 forecasts to 4.06. Presumably this is as a result of revised forecasts that must show an increase in earning on 2019 of 176%. This PE takes no account of the $515mil cash balance which is probably growing at $100m a month. At some point this share price is going to take off.
Actually, unless you are in a hurry to sell, which I am most definitely not, the longer the share price remains at this very cheap level the better. This allows the company to buy back even more shares than it could if the price were higher and our % holding therefore increases even faster.
The phrase I find interesting in todays trading update is "revenue and profitability for the full year is expected to be substantially ahead of current consensus expectations, as revised following the Q1 trading update on 7 April" The current consensus expectations were for a 90% increase on 2019, according to Bloomberg, so were are now talking substantially ahead of that.
I can't see any RNS today but found this quote in the media. Anyone else see the RNS today on LSE?
Online trading platform Plus500 said on Tuesday that it continues to see a "significantly increased" level of trading activity amid heightened market volatility due to the coronavirus pandemic. The company reiterated what it said in an update earlier this month, that full-year profitability is set to be "substantially" ahead of current consensus expectations.
Performance across all financial and operational KPIs remains very strong, it said, adding that it continues to attract significant numbers of new customers at an attractive cost, with increased levels of activity from existing customers.
Revenue from customer income in the first half to date remains at record levels and Plus500’s financial performance in the second quarter is continuing to show further momentum following an "exceptional" first quarter, the company said.
In addition, it has continued to experience strong gains from customer trading performance, which is expected to be neutral over time.