Member Info for RunThoseProfits

As expected, Simon Thomson of the IC has provided a quick update following today's trading update recommending the shares a buy.

This share has been undervalued since early summer last year. It's undertaken a couple of earnings enhancing acquisitions that are not reflected in the share price. I'd expect an updated view from Simon Thompson in the IC in the next few days following the trading update. This is a very sound business and I've no doubt its share price will climb closer to its former highs earlier last year, and far higher in the longer term.

The amount of warrants outstanding is lower than that. The following statement was taken from a GMS presentation in Sept 2024 ) from their own website): "GMS has issued warrants that allow for the subscription of 137 mn shares at a price of 5.75 pence per share; issued to the banks as part of the historical restructuring. As of June 30th, 53.5 million shares were issued, and the balance of 83.5 m await remaining warrants yet to be exercised. Warrants will expire on June 30, 2025" - I agree that the outstanding warrants will weigh on the share price. Hopefully an update will be provided with the final year trading update / results.

In his IC article on 8th Jan, Simon Thompson had set a conservative target of 25p. He also noted the prospect of a possible dividend yield of 4.8-7.2% once net debt fell below 1.5 times cash profit. At the time of writing GMS was on a multiple of 4 times 2025 cash profit estimates to enterprise valuation. It's ridiculously underpriced.

The fund is up c. 30% in the past 6 months. Yes, the fund had a very bad period around 2022 but as AquarianAge has noted, the fund provides access to some potentially extraordinary companies such as SpaceX. This is a log term investment which has proven itself. You just have to be prepared to ride out the dips. I disagree with Saba's interest, and most seem to agree from what I've read.

Thanks InvestEverything. Interesting share this. All the raw data suggests GMS is materially undervalued - and yet the share price is being held back, I suspect by the in specie distribution from Seafood and, I suspect the uncertainty of the warranties which expire in June. I would hope to see these progress significantly once these two points are behind us, assuming the next trading update maintains or improves upon their current trajectory.

Does anyone have information on the status of the outstanding warranties and the likely impact on share price should these be exercised?

Simon Thompson posts another strong buy recommendation in IC today.