Member Info for TealTree

Wise words SG911.

One thing we do know is the FCA findings and any potential redress/compensation won't affect the underlying business as an exceptional item. However, a review into future underwriting could be the cause for concern, but again we should look at a long term view and remember in ten years time this won't be remembered. I would be paying particular interest to their exposure to the HGV vehicle hire segment. My last employer went into administration owing CBG a huge amount of money, and we have to remember that a large percentage of that industry work off very low profit margins, ergo I believe there is a considerable bad debt position for CBG in this area in this current environment. HGV's are costly when not moving and this narrows margins. It would be interesting to know how much this division brings to CBG overall.

The business lends on the basis of secured, structurally protected with short maturities. They are diverse in what they do and specialist in their fields, a solid footprint if you ask me. I believe the business has a strong capital position, has ample retained earnings - which has grown at 18%pa over the last 10 yrs - is self financing and they have not diluted shareholders in the last 10 yrs either.

IMO, as a retail investor - do your due diligence, but keep a beady eye on the institutional dumb (yes, dumb) money, as they will sink your position. I think it is actually rather difficult to value CBG at the moment, but I would average in at many positions along the way at these sorts of prices, but do your homework first....

An IPO that was grossly over valued when it went to market, for those who purchased, there was a plausible argument that there wasn't enough data history to suggest such an over valuation during a rather bull/speculative and stimulus market/economy at the time. Reversion to the mean has very much set in, with some additional over selling IMO. The business designs, produces and markets a heritage brand which consistently has produced more cash than accounted earnings over time. Nothing is perfect and no business will continue to grow at large percentages year over year, but there is a strong argument that a business trading at 4x FCF and produces greater FCF margin than the likes of Nike, Crocs, VF is favourable. There is a reasonable argument that the Debt/Equity ratio is too rich and the the tangible worth is limited, considering the intangibles aren't producing bottom line figures at this current time. I'd say pay down the debt and buy back the stock at this price. For those retail investors that have done their due-diligence and had the stomach to buy at such a depressed SP, I applaud you - I might well do the same.

So in other words if you're a holder of both RDW and BDEV it might be advantageous to value BDEV to see what value you will be getting. A fall in BDEV shares is surely worth pursuing for a buy but a buy in RDW could be a gamble depending on that BDEV share price.

Although I am not a shareholder of SCS, I have been viewing the business with content for some months. For an entity that has shown impressive management status over the years, I would think Shareholders are to believe the Board haven't realised the true benefits In which they have postioned the business. A consistently higher than average and growing return on capital, whether that be ROIC, ROCE or ROE metrics, do come at a premium sale price tag. I would assume the sale of just 30mil of net cash is not desirable for Shareholders, depending on what their own individual circumstances are. I would hazard a good set of conservative assumptions that the sale value Is far short of the fair value over the next 3,5 or even 10 years which shows a opportunity cost loss. The business trades far short of it's peers and I would think the Italians are rubbing their hands together if Shareholders agree. I would reject the offer.