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- Shipping costs falling
- Cotton prices falling
- Recent big director deals
- Shorts reduced from near 10-7% in a few weeks
- Fraser Group investment
- Most retail/consumer cyclical stocks rising
I predict a very slow and steady reduction in shorts due to the small free float here - Only way is up.
Why is everyone so convinced that this is going to be a takeover?
If you look at the wider market a lot of retail or consumer cyclical are rising at the moment? Boohoo, Ocado, Frasers Group, Next, have all risen over the past few weeks. There has also been a handful of chunky Director buys in the past 3 months of so.
IMO this is nothing more than a slight return/stabilisation in investor confidence.
IMO the recent update coupled with large investments from the likes of MA will increase confidence even though uncertainty remains. Falling sales shouldn't be the main concern at ASOS, they need to do something about their margins first ad foremost, so cost cutting/repositioning is the right way to go. If they can't make money on a revenue of 3.9bn there's no point worrying about falling sales 'revenue is vanity, profit is sanity' and everything.
Getting their costs under control is not only essential in the hear and now, but also means they could end up making far more money then the economy eventually does turn.
My take on this is that it's going to need patience. The cash pile is falling, although this is down to investment in France.. They sound pretty bullish in the update:
'The start of our investment programme in France has been very encouraging, and we look forward to seeing this campaign power our business performance over the next two years, replicating the progress we have seen in the UK.'
They have tended to try and under promise and over deliver on these since CC has come in. They could be lying but I think it's unlikely. I think the share price reflects the falling cash pile, and we are likely to stay at these levels until they can prove that the business is going to generate the cash they say it will.
With the new marketing strategy sales in France could increase very quickly as they are starting from such a low base. The share price will stagnate until there is some evidence that the corner has been turned.
Patience is all we can have IMO.
@Dubman
I don't mean to sound rude, but I think there's more to it than that. I've been invested in EVE for 2 years now and think the CBD oil is just the final piece of the jigsaw.
They have added several new products to their range last year which only came to market in the 2nd half , then when you add the CBD range, their overall product range is significantly larger. For this reason I'd be shocked if we didn't see a significant increase in revenue this year as they have added several totally new product lines on top of the additional advertising spend and efficiency improvements.
Many of us (long term holders) have been expecting a significant re-rate so it could just be that adding ANOTHER product was the final straw for the market. Small cap growth businesses have a tendency to swing from being extremely undervalued to being extremely overvalued and visa versa, and most of EVE's increases over the past 2 years have been 'spikey'.
We might get a slight short term retrace but this will continue north over the coming 12 months.
My 2 cents.
Interesting to see that at about 4pm the RSI fell to 34, but the share price didn't drop below 6.3, the second the RSI returned to 50-60 the share price went back to 7p.
I think any kind of buying strength and this will continue north.
Share price back pushing 7p with the RSI in the 50's.
This stock will go a long way north of 10p eventually. This may take some time, but as we've seen at various points over the past 12 months any kind of volume moves the share price in both directions significantly.
Not sure a takeover sub 20p would be physically possible to be honest, but that's only hypothetical anyway. The RSI has just hit 44 with the share price still at 6.3p - I.e 35% higher than it opened at.
I'm happy with the rise here, especially as I doubled down at 0.8p in March last year.
Do your research on the actual business before you post things like 'ramping' and 'de-ramping' . This stock is clearly headed north and there will be the odd bump along the way. I've had numerous people on here over the past 18 months tell me this was going bust, or would get taken over at 1p etc.
They have results due on the 21st of March, have just effectively broken even, announced another potentially massive new product line, and increased marketing spend in France. We're also expecting several other new products over the coming months.
If you buy a stock purely because someone on twitter told you to, you are bound to lose money.
Buy and hold.
Reading back through previous RNS it's interesting to see that the cash position at the end of Dec 2019 was exactly 8 million. (May RNS).
In the most recent RNS the cash position at the end of Nov 2020 was exactly 8 million again.
We must be pretty close to where we want to be surely?
@wyndrum - Don't exaggerate.
They do return to buy other stuff - The customer repeat rate has been steadily rising, this has been specifically referenced in more than 1 RNS statement.
It's not just about mattresses is it? EVE sells a whole range of products and intends to increase it's range further, this is the entire point of their new strategy. A bed is generally a one off purchase - Pyjamas, bed sheets, and pillows are not.
@wyndrum
Of course it makes a difference - It might not make a difference on that one sale, but an increasing number of EVE customers return to buy something else again - that's the point.
@Lemming99
I accept that but I'm using that as an example, and the number of sales they make isn't really my point. The point I'm trying to make is that this would have to be a spectacular failure not to have a significant positive effect on sales for the period. E.G if they sold half that figure (40,000 units) for the period it's still significant new sales. I agree the main point is marketing here and this is basically free exposure which will increase brand awareness and drive traffic to the site which is what we want right?
@wyndrum - We don't know exactly but I'm certain they did mention that it was at profitable rates in the RNS/update? either way its a significantly cheaper marketing exercise than previous attempts, especially when added to the the 25% sales increase in Q2.
@wyndrum - Respect your view point but disagree.
EVE have several new product lines entering 446 boots stores (+ online) over the next few weeks. The prices ranging from £6 to £25 (on my research). if each store sold an average of 2 products a day for the next 3 months you'd be looking at just over 80,000 units, but don't forget they sell on the boots website as well.
These are pretty rough numbers, but I think it's unrealistic to expect these new retail partnerships to push sales up by quite a bit.
It's admittedly small, but there could be a dozen reasons why she has bought that amount, but I wouldn't think she has bought because she thinks the price is going to go down....
Maybe she had 4k+ knocking about not doing anything?
Maybe it was inherited?
Maybe she sold shares elsewhere and decided to top up while the price was down?
Maybe she has sold a personal item and wants to put the money somewhere?
@wongtogo
Errrrr Q2 Sales went up 25% and guidance has been upgraded?
I've said before, when the new strategy was put in place they exited several sales channels and in some cases entire markets (Germany) - This pushed sales down a long way. The fact we are basically 'level again' proves that the sales we are targeting are growing and have been for a while.
@LondonInvestor
I don't think it's nuts to be excited about a totally new product range and revenue stream.
What is totally nuts is to base an investment decision/opinion on your own personal, and exaggerated view of boots which has no basis in fact at all.
I don't shop in there but millions of people do, you might think it's a dreadful store but millions don't. EVE's marketing strategy is based on a lot more than one persons view.
It generates masses of exposure at the peak point in the year - what is nuts about that?
I would expect some if minimal visibility on Eve's trading before March as some of these partnerships begin trading in October in the run up to Christmas (we had positive updates around Christmas time this year). They are extra product lines in extra channels so I see an uptick in sales it's more a question of how much. It could be that we get a few short updates from CC in various magazines as we have had over recent months.