Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
@wyndrum
That's the one! As I say, I'm new to charting.
I'm not so much looking to trade or buy more, but with future prospects looking good (although maybe distant) I'm just wondering if we are somewhere near bottomed out. I expect the retail partnerships to have driven substantial improvement at the next update so I'm happy to wait this out.
I'm quite new to this charting business but looking at the RSI makes interesting reading.
The RSI has been as low as 25 in the past 2 days (oversold) and the price hasn't really moved down that much (we sit at 5.5p at time of writing). Looking at past patterns we've created a lot of room, and any RSI movement in the other direction should cause a tidy rise again. This is typically what's happened before although there seems to be a lot of room this time.
Anyone else got any thought on this?
@londoninvestor
OK, my thoughts are:
A) Boots specialise in selling self care products whether that be, make up, aftershave, supplements, over the counter drugs etc. A large portion of their products are already expensive and as they are mostly in the same sector Eve's products are now getting in front of consumes who are likely to buy them - Argos isn't exactly a good match for this.
B) It gets them exposure in 448 stores which is an awful lot of additional marketing, but not only this it's targeted specifically at the people who are likely to buy their stuff. Again what percentage of argos customers actually go in their to buy a mattress?
All opinions welcome I just think there's far more logic to this than meets the eye.
@londoninvestor
OK, my thoughts are:
A) Boots specialise in selling self care products whether that be, make up, aftershave, supplements, over the counter drugs etc.
@londoninvestor
Not sure what some people are expecting?
- Boots partnership gives brand exposure in 446 stores.
- New Partnerships with Olivier Desforges (bedroom & Bathroom specialist)
- 'Eve will be launching a weighted blanket in the autumn to aid a good night's sleep under the new 'well slept' range of sleep accessories, as well as adding to its ranges of bedroom furniture and bedding.'
These all seem like pretty targeted partnerships to me that give a lot of exposure, and will result in increased sales. Added to which presumably they are profitable as that's the focus.
Then again if you are a trader expecting them to have sold a bzillion mattresses in a fortnight??
@wongtogo
I think the point is that they have completely cut advertising spend and sales have at least remained roughly flat (23.4 million last year). They also closed several sales channels such as the original partnerships (not selling at profit).
Bearing this in mind I think that in real terms sales (the ones we want anyway) must be going up very quickly as they have effectively slashed sales, and then caught themselves up again in the space of a year. They are now in a position where they can turn the marketing taps on again (but efficiently, with the help of the new agency).
I think in real terms sales are going up faster than it would appear.
What I find interesting from this update is that sales are expected to be 10% higher than estimates made only 3 months ago.
CC Said: "This guidance upgrade is evidence of our momentum and the success of our rebuild strategy, against a backdrop of a consumer landscape shifting to online and market trends in favour of homewares and sleep wellness. Whilst economic uncertainty is likely to remain for some time, we are starting to look beyond our rebuild strategy to the next stage of growth."
She talks about moving onto the next stage which is 'growth'. To my mind this implies that sales are growing very, very quickly when they haven't even started trying to grow yet. Profitable sales have clearly been growing for some time (revenue now back to about where it was last year circa 23m) despite significant cuts to marketing spend.
If this is the case then estimating sales although worth doing, will probably be difficult as a decent marketing campaign guided by CC could cause sales to pop up a long way.
(not that I'm complaining) :)
The main positive I think is that including this RNS and the recent one (Dr in the US) we now have circa another 17-18% of the stock in 'sticky' hands.
Interesting looking at the RSI pattern over the past few months, are we expecting another pop tomorrow?
I managed another 35,000 at 4.2.
Ahhh I remember Samkk..... I wonder how his mattress store is doing?
@wyndrum
Thanks for your input over the past few days, very useful
Bloody hell, I didn't know he had that many - Well there's the answer!
@Lemming99 - You may be right, I'm not 100% sure it was 12 it just seemed to stick in my mind - Your the man with the numbers haha!
@wyndrum
Agreed!
But the shares in issue have doubled since they listed to 278 million at my last check. The price has gone consistently from 0.8p a few months back to 3.5p. In the grand scheme of things the stock is actually re-rating consistently and quickly, that's the point.
@wyndrum - I can see that haha!
1) You say that the increased sales are down to COVID but that isn't totally true (although has probably had an effect). Originally EVE was blowing money on advertising and effectively buying customers. They cut their advertising understanding they would lose sales short term with the view to growing profitably, but critically the point is they weren't making money on these sales.
I think when you look at sales prior to COVID they were probably growing anyway by this stage (they were so busy over Christmas and Jan they couldn't keep up with demand). They were already breaking even at operating level before COVID came along and some of this must have been down to increases in sales, especially with retail partnerships thrown in).
2) Woodford owned nearly 12% of the company (EVE was thinly traded at the time). That coupled to his profile and the fact that several of his other stocks went the same way, I'm not sure it's physically possible for his selling to have not affected the share price?
@wyndrum
A certain great investor once said 'in business the rear view mirror is clearer than the windshield'
Over 18 months Eve has turned from losing 20 million a year to basically break even. There's now a highly experienced and competent management team, the figures for repeat customers increased substantially, and they've totally changed the way they advertise, to both reduce costs and be more efficient at reaching their target audience.
It's important to be balanced with views, but whilst no doubt possible, this business failing never seemed logical to me. All views welcome... that's why we are here
I agree, there need to be an exit plan, but we are all in this to make money aren't we?
The science of the market shows that people follow each other, and with major interest in the shares I can only see it moving in one direction. There's a chance this share could re-trace but with a MCap under 9 million and business performance, and interest improving I don't think it has a great deal of room to retrace.
I could be wrong, but IMO this company's share price isn't close to matching its performance, and I think the major interest in shares shows that.
Well done to all those that have made money, I doubled down at 0.8p and am now up 17% overall.
I see a few posts on here about selling out, with the TR1 and the possibility of more in future I'm curious as to why people view this as a sell? Why would you sell a very small, growing company just as the big money starts to get interested?
Ok, I was being slightly vague as there's 273 million shares in issue (roughly).
The point I'm making is that the business is realistically in better shape than it was then and now it's more about proving to the market it can grown sales and keep margins the same.
It still has to do this, but if it can I think that's a very realistic target over the next few years. We don't know for sure what will happen but if the trading update exceeds expectations again, and if by a distance, it might get near there in the medium term.
I'm a long term holder here.
My exit point will be 50p where I'll sell some, depending on future out look etc. It's worth noting that 50p would give us a Mcap of 138 million which is about where we listed (before anyone jumps on it).
Good luck to all.