Good note on buying dividend stocks, BP mentioned, today is a good day to buy -https://thecollective.finance/2021/01/turning-dividend-plays-into-100-tax-free-returns/
Great buy at anywhere under 10p, great stock to own over the next year - https://thecollective.finance/2020/12/dominos-pizza-poland-dpp-the-lack-of-scale-has-been-addressed-200-upside/
Domino Pizza Poland (DP Poland) is a much better value proposition, why pay 4 x revenue for DOM domino us when you can pay 1 times revenue for DPP!
https://thecollective.finance/2020/12/dominos-pizza-poland-dpp-the-lack-of-scale-has-been-addressed-200-upside/
DP Poland is a much better value buy - https://thecollective.finance/2020/12/dominos-pizza-poland-dpp-the-lack-of-scale-has-been-addressed-200-upside/
Potential 150% + Upside - https://thecollective.finance/2020/11/tp-icap-tcap-insider-buying-150-upside/
Yes, some interesting block buying going on at Headlam - https://thecollective.finance/2020/10/headlam-head-l-significant-block-trades/
Here's another interesting article on this stock - https://thecollective.finance/2020/10/hostelworld-hsw-l-travel-restrictions-aside-could-the-management-be-doing-more-for-shareholders/
Interesting research note on Headlam, always good to see insider buying - https://thecollective.finance/2020/10/series-part-headlam-plc-head-l-the-leading-carpet-distributor-in-the-uk-a-dividend-grower-and-insider-buying-100-upside/
Interest buy perspective on MAB - https://thecollective.finance/?p=88
Post Lockdown the Millennials and the Zoomers are going to get out and explore – Hostelworld (HSW.L) has 200% upside on a 2 year view.
Post lockdown there will be major demand for the young budget conscious traveller to explore, socialize and interact. By the new year, global youth will have been starved of ‘experiences’ for close to 12 months with significant disruption to their lives and often trapped at home. Pent up demand for a budget hostel and backpacking is significant once lockdowns dissipate. This month, September 2020, Hostelworld released an interesting survey based on a survey of over 3,000 backpackers. The main points a) 52% are ready to travel within 6 months b) 55% expect international travel to be available in 2021 c) 56% of Americans were planning to travel domestically. Given restrictions domestic and short haul has represented 2/3rd of its booking for Americans, British, German and French nationals. However, they need flexibility given the uncertainty and Hostelworld has accommodated with non-refundable but flexible rate.
The company benefited from a capital raise in H1 of 15mn euro and has very little long term debt at 3.5mn euro (but, like a lot of businesses payables have grown to 17mn euro with employer contributions being a big driver). However, these obligations are more than covered versus 33mn euro cash on balance sheet at the end of June. This means the cash on balance sheet remains close to 50% of its market cap. The cash burn in H1 was controlled (thanks to a reversal in working capital and pushing out payables). This will mean the equity value is supported with a high net cash position.
What is Hostelworld worth?
Lets look at revenue multiples as earnings have been decimated. Historically the company has traded around 2 to 3x Revenue (EV/trailing revenue).
When the revenue growth rate was higher in 2015 to 2018 the market afforded it a multiple of 4x EV/Revenue.
Analysts expect that by 2022 it will have recovered its 2019 revenue of 80mn euro. We believe the pent up demand to go backpacking will be significant.
Let us be conservative and put Hostelworld at 2x trailing revenue for 2022, this would imply an enterprise value 160mn (2x revenue). If we add back net cash of 30mn this points to an implied share price of 1.7 euro versus 0.59 euro currently (note the liquidity is on the UK line, 55 pence).
Conclusion
Hostelworld is an industry leader, with cash on the balance sheet to deal with an extended lock down. We believe the shares offer 200% upside on a 2 year view. The youth will go travelling again and a travel lockdown will not continue indefinitely. Now is the time to start accumulating.
Read this today, makes sense so bought some Hostelworld as a hold. https://thecollective.finance/?p=67