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Time for another fundamentals check, fun times!
seconded,
dont mean to be insensitive, but I just need it to really quickly dip under 218 for like 5 seconds.
back in june*
as a former holder as well, equally surprised
This stock is meeting the assumptions I made back in just for a 280 valuation, and yet it is trading at the same level.
cautiously back in with 1% of portfolio, 5% at 218, and 20 % if it falls to 200.
Not selling for less than 255.
May do another reverse dcf breakdown with new figures if people interested
Hmm maybe it is over analysed.
Maybe too many assumptions.
But Im trying to put down in concrete terms the main risk of this stock, prolonged reduced demand.
My theory is it will normalise, and at that point the survivors of this travel sector demand shock will resume normal profits after a 2-3 year period of recovery.
The question is how long do you think it will take I think.
I speculate less than 3 years, so I think im a buyer at this price.
I play around with the scenarios on the excel to try to understand the risk im taking.
What they tell me every time is that while this may be a good company, its inability to generate a profit in the short run is seriously hurting the stock value, more than some people may expect.
Thought I'd share the tool, I didnt make it, cant remember where I downloaded it from.
Link to the google doc:
https://docs.google.com/spreadsheets/d/1a160B_yRjvZUxx3T49f8yFXoVe-X55vs/edit#gid=1259706804
Hi All,
You may remember me from a few months ago.
I made a post claiming that NEX had an intrinsic value of 260-330.
I am however not a professional in this field, and made an error.
I realised after some volatile weeks that my analysis was too generous, providing too low of a DCF for the amount of volatility we were experiencing. I sold off.
Now, at a price of circa 220, I find that this stock fufills my conservative scenario requirements, and am planning on topping up again.
I thought, given the engagement in this thread, some of you may be able to scrutinize my numbers.
I am especially interested in hearing from those that believe this stock will go to 350+++ in the short term.
The document is what I understand to be a 2 stage DCF model based on EPS flows with 11% DCF.
I set the DCF so high because even though NEX is a brand, and a monopoly--the industry is not safe, the future is uncertain, and there needs to be a premium accounting for this.
Scenario 1 assumes that NEX will return to its 33.5 EPS profitability by end of FY 2024 (Intrinsic current value: 260p)
The "Conservative scenario" assumes that NEX will return to its 33.5 EPS profitability by FY 2025 (Intrinsic current value: 224p)
The "Disaster Scenario" assumes that NEX will be relatively unprofitable until end of FY 2024 and return to 33.5 EPS profitability by end of FY 2028 (Intrinsic current value: 144p).
Hope this all makes sense. I am an amateur.
Here is the link to my google doc.
Humbly request any and all criticism.
My personal theory for the share price is this...
57% of NEX stock is held by the top 10 institutional investors, 28% by retail investors.
One or several institutional investors are slowly exiting, pushing the stock on the retail investors.
This is why the massive dives after green days.
That in itself is worrying, but perhaps they are limiting their exposure.
More for us!
Dont believe this has been posted here before:
https://www.newtonnews.co.uk/national-express-gets-brits-back-on-their-travels/
“Overall demand and bookings have been really positive and the level of requests for travel to and from the North East meant we decided to add to our timetable in time for the summer."
I link this statement with the May 12th update:
"We continue to generate positive EBITDA, slightly ahead of our base case, with positive underlying operating profit delivered in March and April, strongly ahead of last year."
"Given the ongoing restrictions on travel, we continue to anticipate first half performance to be at least in line with that delivered in the second half of 2020. "
Not a financial advisor bud, can only speak for myself.
I've done my own personal calculations, am willing to accept the downside.
To be frank , the market is way overpriced, few companies trading at fair value.
Just happy to find one that is. Happy to pay fair value.
If the H1 results are better than (-5) - (-2.5) EPS, it will justify a 280 valuation in my opinion, based on a 7% expected return over a 4 year period.
They are liquid, will be floated by the UK gov (this was my one concern earlier), have tons of long term contracts, buying up competitors, previously at 300+ not months ago. Trading in countries that are proactive about Corona. Tons of assets.
I've made so much swing trading this between 260-287, im willing to take the hit.
It just makes so much sense to me.
Im just keeping gunpowder dry in case it goes lower.
Worst case, I'll wait it out.
https://ibb.co/b5SX2Mp --General trading acc
https://ibb.co/b7DjPM7--ISA
I think it will come up on the nex trades app soon--3:39pm-3:42pm ish , several limit orders executed (got alerts). 266.4, 266.6, 266.8 thatll be me.
I just wanna know what sucker is selling at that price.
Check out the larger trades (and partial fills) @266.4-266.8. Thats my confidence :)
The price is absurd , buy if you can.
Not to seem callous, but I am laughing right now.
Im gonna make so much money at this price.
50K added to my position.
Pretty clear to me this stock is worth between 280 and 350.
Market is super overpriced, what would you even buy.
Im holding.
What an end to the day!
Hi Guys,
I made a mistake in my above post.
The statement in march 2021 was: "With patronage close to 60% of pre pandemic levels in the Autumn".
They were infact re-itterating the 2020H2 numbers.
No idea what the numbers are like in the new year.
According to the last update by NEX , patronage in UK is at 60% of 2019, and mileage is at 13%.
Sounds like they are just running the very most profitable routes.
The numbers are exactly the same as H2 2020, so I'm not sure they were updated after Q1, but one has to assume no mistake was made.
Thought I'd share my DCF analysis of NEX.
Caveat: This is my first DCF analysis.
Please correct me if your calculations are different.
I've run several scenarios on a discounted cash flow basis.
For a company like this (Brand name, non-growth sector) , I calculate based on a 7% discount rate.
Right now, it seems to me as if this stock is priced to rebound to previous levels at above a 4 year horizon.
I think 4 years is reasonably conservative, so I am an investor below 280.
Here are my assumptions for a 4 year investment horizon:
Scenario 1 (4 years recovery)/ Valuation @ 280:
F21--0 EPS
F22--10EPS
F23--20EPS
F24--30EPS
Scenario 2 (3 years recovery): Valuation @ 330
F21: 5EPS
F22:15EPS
F23:30EPS
F24: 32.1 EPS (7% growth)
Scenario 3 (2 years recovery): Valuation @450
F21: 10
F22: 30
F23: 32.1( 7% growth)
F24: 34.25 (7% growth)