Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Ragtrade, with respect, I think the opposite has been the case. It is generally accepted that the unseasonal weather in the summer may have subdued sales, whereas I suspect the good weather from the end of August has improved things a bit
Regarding the poor summer weather, Kingfisher - B&Q (the 3rd highest shorted share) reported disappointing half year figures yesterday blaming the weather and macroeconomics. The shorts had a great day. As I've said before, it's silly to totally ignore them when the percentage is that high. Notwithstanding a probable decline in sales (maybe if of 10%or so), I think Asos shares will be okay if they can demonstrate that the cost savings are coming through as projected. If they are, the rest of things should eventually come good.
Jtrade1....I understand your concern. Declared shorts have risen from 2.17% three months ago to 6.76% now, by far the highest on the whole stock exchange. Anyone who suggests ignoring this aspect is just hoping the problem will go away of its own accord. Maybe it will, but the message it nevertheless gives is that one should be cautious about buying when the professional gamblers are betting on being able to buy back cheaper at a later date. It is of course just one of a number of indicators.
Regarding Frasers derivatives dealings, there's a further 4.54% due for expiration in October. One previous commenter on here suggested that as all these 'sell puts' were on 'physical' shares, MA was expected to receive delivery. Well that hasn't happened this month.
As for explanation for the changing of the trading update day because of a shortage of analysts around that they wanted; sorry but I don't buy it. I consider that a fairly feeble but convenient excuse at best . It's more likely in my view that they simply wanted a little bit more time to evaluate the first few weeks of trading in September when the weather markedly improved, so that they could put a little extra positive spin on things beginning to turn around.
Fairly sure there's little to worry about at Next. Their last guidance was good given the gloomy conditions and they generally have a habit of over delivering. Their business model is not only different but superior. It's a much better run company, hence Next up + 23% this year and Asos down - 40%. Personally, I don't think Next's results will give much of a clue as to how Asos has done.
The shares have been a disappointment. I've sold today after owning for a couple of years or so. Out with a tiny profit. In reality the shares have been a dog. If you had invested 3 years ago and had the divs reininvested you'd still be down over 4%. If you were lucky to invest a year ago, you're up 10%. They may have further to go but I've lost patience. Better value elsewhere.
Savvy....''ASOS is as well run now as any company with a good balance sheet and huge cash flow ''........with respect, that remains to be seen. Let us see later this month how they have performed against their peers. The overall impression on this forum is that the shares are set to rally. The shorts disagree.
On the subject of the shorters, I am still trying to clarify the overall declared position. Here at LSE it's quoted as 5.28%. ShortTracker has it as 6.59% which includes Arrowstreet at 1.31% . Arrowstreets position of 1.31% seems to have been unchanged since 18th July. Does this mean the short position on lse has been mis-stated by this percentage all this time? Has anyone got some insight as to the correct declared position? Arrowsmith, by the way shorted at £3.77.
My word, how refreshing to see a company doing well and excelling in its sector. Let us just hope they stay on course without deviating into too many other areas thereby losing focus as so many other companies do. It looks fairly clear the top bods see revenues continuing to increase thereby enabling a maiden dividend. My only reservation is whether this is too soon. Nevertheless I'm tempted to add more despite the rise today. I think this company is due a re-rating. Once these figures have been digested by the city, this could take off.
Good update from ABF (includes Primark which accounts for more than 40% of its revenues). Primark like-for-like sales growth for the financial year is likely to be about 9%, and to be 7% in the second half of the year. What a well run high steet store. My local one is always packed out with youngsters. ABF sp up over 45% in the last year. They and MA's SportsDirect seem to know what they're doing. Let's hope these encouraging figures bode well for Asos and Boohoo results.
Pretty much a dog of a share. Was already down 33% over the past year, even with divs reinvested. And that's before today's 12% drop and div cut. I've come to the conclusion that most reits are primarily a rip off but that people are attracted to them for the higher than average yield and them being a safer than average bet, rather like infrastructure stuff. Well they're not. Ignore the NAVs as well as they're often meaningless. Look at EPIC as an example. Currently being taken over at 72p when the NAV is 81p....and the shareholders have had a negative return of 35% over five years with divs reinvested. My advice is avoid these types of income shares. They are deceptive. They basically pay you a high dividend derived from your ever decreasing capital!
More than a bit ambiguous Gerry. Why can't these people make it clear to small shareholders in simple terms what the deal offers? Is the dividend paid until the end or is it suspended and interest on cash accrued and added? Or any other scenario?
There's always the chance that the offer will be rejected or that another concern comes in for a counter offer. Personally, I've had enough of this dog of a share and have cut my losses and sold. Better used elsewhere in my view.
And so much for the Telegraph's recommendation to buy at the time for income and growth. And you also just have to look at Hargreaves Lansdown today to see the apparent NAV of EPIC is supposedly nearly 81p. It just goes to show what a nonsense these NAVs are in respect of many investment trusts. Either that or the buyer of EPIC is, in simplistic terms, paying 72p for 81p worth of assets, ie an11% discount. Goodbye epic.
West6809: If one is to give just a very basic and simplistic view of those figures in isolation, one could argue that the true growth started to ebb away in 2018/19. One can discount 2020 and 2021's figures as it was the 'covid' years and, for Asos, it was all too easy to ride along on the crest of a wave. They lost focus during that time. Meanwhile, despite hopeful cost savings coming through, all the signs are that sales over the summer months have been less than expected. I think they are going to struggle to reach even the lower end of that figure you mention. I hope I'm wrong but, as ever, I look at the 'shorts' and see Asos and Boohoo at the top of the league. I've come to the conclusion there are too many online companies vying for the same customer base. Consolidation is overdue.
Boohoo and Asos are now the top two biggest shorted shares on the exchange. It's more likely than not that the next updates for both are going to be disappointing. The markets clearly believe so. The markets have been generally flat in the last seven days and yet both these companies are down by 12.4% and 10.8% respectively. Expect a tough time over the next couple of weeks. I envisage MASH adding on further weakness.
West6809: Presently I have no set exit price. However, I am damned if I am going to sell at a loss after waiting all this time! My initial investment in October 2020 was meant to be a quick profit making exercise; an 'in and out' situation within a month as I was convinced through the hype that this was heading much higher. The price dropped, and I bought at £53 which sounds like madness now. Stupidly I hadn't reserched sufficiently. Sometimes we never learn, particularly when it comes to AIM stocks. Over the last three years I've averaged down to £7.57 (which still feels a million miles away) and quite frankly there are some days when I feel that I would be content to get back £8 per share to recover my initial outlay plus interest. However, it is not quite as simple as that. The next announcement will probably be a critical moment for me. Any sign of at least a little progress being made will be a big incentive to 'hold'especially with predators sniffing around. I'm convinced that with patience the shares will begin to turnaround; clearly MA and Polvsen think this. The main problem however is all the hurdles the company has to overcome in the next couple of years. I'm not sure at my age if I want to hang around that long to see the potential full recovery materialise . Online fashion retail is so fickle and highly competitive. The risks are still high and in the very short term the signs are not good. Uncertainty is a bonanza for the shorts. Having reluctantly held for three years, I don't want the excruciating frustration to go on for yet another three. I maybe nearer to an exit target price once I've properly analysed the end of year figures in October.
Mortality: Another £500m figure coincidentally also appears in a completely different guise elsewhere in the accounts. In April 2021 when the share price was £54, Asos, looking to raise money for global expansion, received £500m via a Bond at a cheap rate of 0.75% p.a. (base rate at the time was 0.10%) . This needs to be renegotiated by April 2026, a mere 18 months away. With base rate currently 5.25%, one must pray that interest rates come down significantly by then.
I wonder what basically happened to that money. One could argue that ultimately some of it was indirectly used to over- buy inventory, whch was subsequently written off. What a waste.
Whilst I'm relieved my losses have been reduced due to these developments, I remain disappointed.
Eighteen months after investing, and then buying more after six months to average down, my overall buying price is about £0.78p. And this is after all the monthly dividends have been reinvested over that period. I'm still 6.5% down on my investment.
One easy way to lose money. Should have kept it in my bank account and saved a lot of hassle. Thanks a lot for nothing EPIC!
Wayne90 : I can see your initial rationale regarding THG's bigger SP drop compared to Asos' bearing in mind their respective 'shorts' positions. However, with respect , you are comparing apples with oranges.
It's fairly futile comparing the two companies generally. However, looking at Asos in isolation, I have, more than once reiterated that Asos' share price has been largely propped up by the activity of MASH and Polvsen and the subsequent t/o speculation. Had it not been for this, the shares would still be, in my opinion, in the low £3's range. I repeat, the shorts smell blood at this point and it was a mistake of the company to exacerbate the uncertaintty by delaying the trading update. Whether the news is good or bad, it will now make it easier for the shorts to make a quick buck in the interim period.
Barkils : Thanks for that little snippet about Nick Robertson's yacht sale; my heart bleeds for him....NOT!!! . This is the guy who at the end of June effected, in my opinion, one of the most badly mistimed 'director deal' sales, which brought him in £1m (by selling at a low price) at a time when the shares were heading in a positive direction. Was it really necessary to do that? It sounds like he spends money like water. Obviously it gave out all the wrong signals.
Financial analysts generally don't like delays to scheduled announcements (albeit this one is only a week). It is is, more often than not, regarded as a negative development. However, in Asos' case it may benefit the company as they will want to include some right up-to-date data in order to put a positive spin on a late surge of summer sales in first few weeks of September. Nevertheless the shorts declared figure has increased to 5.72%, the highest shorted stock on the exchange by a fair margin. That simply cannot be disregarded. Irrespective of the what the trading announcement will reveal on 26th September, and barring any exciting major shareholder changes or approaches, I see the SP continuing to drift lower and the shorts taking advantage of the uncertainty. This is just my opinion, but if anyone wants to constructively put a rational argument opposing this viewpoint then I would be interested in hearing it.
Netzeroready : I never went away, but I wish you would. If you haven't anything constructive to add to the debate then I suggest you button it. You clog up the board with puerile replies.
Wayne90 : I agree. The same could happen here. Uncertainty and nervousness regards the update on the 19th, followed by a positive response a short while later when the full end of year results come along in mid October.
Goldman Sachs lower target rate, for now, is fair enough. I suspect the Asos update on the 19th will show a decline in sales of about 10-15% and consequently the final results in October, given the poor summer too, may be towards the lower end of expectations. Barring any unexpected problems, I see the SP rising in October once it has been demonstrated they have control of costs and inventory. In my view, the shorts are only there to get a quick profit when the shares conceivably dip in the third week of September on the back of a depressed market.