The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
In agreement with the latter part of your post. It’s a real mix of people who are buying new builds. On our Charles Church, i.e. Persimmon estate (completed 2018 - 2020), there have recently been a couple of smaller 3-bed semis which have struggled to sell around the 400k mark. Presumably they would be of interest to the first time buyers / second movers with a high LTV who are stuffed right now with 7% rates. However, a friend’s nicer, detached 3 bed was snapped up for £500k (about £50k over its market value) before it even officially went on the market, by someone in a more comfortable position.
As for the larger 5 bed houses like ours in the 650 -750k bracket, most are couples/families in the 30-55 age range, who from what I can piece together from general chit chat either bought mortgage free, or have sub-60% LTV.
People still seem to have plenty of money to splash on weekly car valeters, cleaners, takeaways and online shopping etc.
From one of the random articles on the MSN news aggregator this morning:
According to a survey of over 2,000 people on things they are (or are not) prepared to restrict their spending on, "Holidays are a top priority, according to research commissioned by budgeting app HyperJar, with two-fifths (39%) of holidaymakers saying they won’t give up on spending on getaways." Sure, it's a small sample and yes, when it comes down to it, some of them may not follow through on this statement - but it does tally with the revival in airline passenger volumes, even in the face of high inflation and interest rates.
It seems to me there's a far greater appetite amongst the general populous to trade down to own-brand ketchup or toilet roll than there is to give up their summer holiday. It's an unfortunate reality that day to day life is becoming increasingly stressful / difficult / depressing for a growing number of people in the UK these days, and a summer holiday - whether they can really afford it or not - is probably the most effective means of escapism.
I realise now they've drawn £30m on the RCF, but still a pretty low level of debt.
Today's plummet in the share price seems to me to be way overdone. I appreciate that H1 is showing a loss and that if you only glance at margin and P/E in isolation, it doesn't look great right now. However, from my reading of the Interims - while they've spent a chunk of money in the last sixth months, it's primarily been on stuff that should actually translate into more business and a better offering going forward. They note the boosted marketing spend is already paying off with increased brand recognition etc. Some of the expense incurred has been on a cloud migration project and some of it on increased customer service personnel, both of which will benefit the business over time and the latter will keep customers happy / help their ratings/brand perception as demand continues to grow.
Looking ahead, they say that the boosted marketing spend has been "heavily" weighted towards H1 - and presumably costs like cloud migration should be a one-off. Last year they went from a similar loss at H1 to a profit at full year. Given these factors and the reported uptick in sales and transaction value, I can't see any reason why that won't be the case again this year.
It feels to me like they've been busy laying the foundations for future growth and (notwithstanding a few potential short term jitters in the SP, maybe even down to 90p) I can see this being at £2 - £2.50 within 18 months. I also can't help wondering, in the very back of my mind, if the current low share price and debt-free balance sheet (as I understand it) could make this a potential takeover target for someone.
I get why that could cause some concern - but even from a quick glance at the most recent Trading Update RNS from 3 weeks ago: "Hiscox UK's exposure to potential business interruption claims has been running off at approximately 8% per month since June 2020. Residual exposure is expected to be largely run-off by the end of June 2021. As previously disclosed, the Group estimates exposure to restrictions already announced in 2021 to the end of June, to be less than $40 million".
So whilst they had $475million of liabilities and the publicity of court cases etc won't have helped, it seems they're motoring through these claims and pretty much out the other side now, with limited liabilities going forward.
I want to top up to average down (current average £8.21) but just don't know where this is going to settle!
Any ideas why (excepting the brief Covid dip last spring) the share price is now at its lowest for six and a half years? Perhaps I'm missing something, but recent results, ongoing business and outlook don't suggest any reason to me why this should be sub £8 and not closer to (or above) £10.
I do think these are pricey right now, but on the plus side as a business I think they'll be around for the long term. In the high-street greetings sector, I think Card Factory and supermarkets at the value end will see off the likes of Clintons for bog-standard cards etc in the short-medium term. But, longer term, Card Factory is best known for its high street stores, and by the summer there won't really be a high street for people to go back to - at least not in the traditional sense of a shopping destination. I suspect there will be a die-hard cohort of older folks who will still venture into town and pay for parking, dodge the beggars etc specifically to get a birthday card for little Timmy, but younger folks will all be buying online or grabbing one when they do their grocery shop. I can't see the Moonpig SP straying outside the (admittedly wide) band of £2.50 - £5.00 without some massive news about expansion or an unforeseen problem.
I've been in OPG for several years, so share price is still below my average. I was extremely tempted to buy in further at the 10-15p range, but I already had £3k in OPG, which for me is a decent chunk of cash, so was wary of putting too many eggs in one basket. I was also getting worried at the 10p stage that they might even de-list the thing, as market cap was so ridiculous vs the cost of maintaining a listing.
I'm getting very tempted to open my wallet again. Logically, the return to dividends should herald higher SP and a reasonable yield, even at my current average. In particular, I've always thought that one of the key things holding OPG back is the allergic reaction by many investors to anything fossil-fuel /carbon related, now all the big players seem to have social and environmental concerns baked into their investment strategies. But, if OPG can convert their recent words on the green agenda into actions, then we might be able to overcome some of that reticence and see this gain a bit of popularity.
As someone who's held this share for a while, I genuinely don't understand the current share price and resulting market cap. This is a power company with an established asset, proven revenue generation and profitability, it's paying off its debt hand over fist (term loans to be fully repaid within the next 3 years as I understand it) - yet the share price is languishing around 10p. That means market cap of just £42m. To put that into perspective:
> Year to 31/3/19 it generated £140m revenue (3 times its current market cap) and £14m PAT. (i.e. profit after tax for just one year was 30% of its total market cap)
> Year to 31/3/20 it repaid almost a third of its term loans.
> Speculation - albeit quashed - two weeks ago that a larger rival was looking to make an offer for its Chennai power station around the $120m mark - i.e. almost 3x current market cap.
I simply don't understand how or why this share isn't trading at 40p or more. Does the fact it's Indian put some people off? Is it because coal power isn't trendy now? It worries me that one day they might decide to de-list from London as the current share price is just taking the mick.
As someone who's held this share for a while, I genuinely don't understand the current share price and resulting market cap. This is a power company with an established asset, proven revenue generation and profitability, it's paying off its debt hand over fist (term loans to be fully repaid within the next 3 years as I understand it) - yet the share price is languishing around 10p. That means market cap of just £42m. To put that into perspective:
> Year to 31/3/19 it generated £140m revenue (3 times its current market cap) and £14m PAT. (i.e. profit after tax for just one year was 30% of its total market cap)
Year to 31/3/20 it repaid almost a third of its term loans.
My average is a little higher than I'd like (at 63p) but fortunately am only in for 1k which it wouldn't kill me to lose. However, I personally think that in the next few months 70p - 80p should be perfectly achievable, even if it does come in the shape of a spike. I'm in two minds about the longer-term outlook for the UK cinema sector, but am leaning towards a post-covid rebound, followed by a slow, very gradual decline over the next 10-15 years.
That said, CINE does most of its business outside the UK and it really amazes me how different things can be from one country to the next. E.g. go to Spain where smoking is still relatively common among young people, and various European countries where their whole railway infrastructure is covered top to tail in grafiti. Whereas kids here (thankfully) seem to have left smoking and spray cans as a relic of the 90's. So never mind what our lot are doing, if the Americans can be tempted back into their movie theaters, we should be all set for a decent recovery.
Average currently sitting at £7.10, so still a way to go for me to be back in the black on this one. Based on the underlying business and subject to some changes at the top and the placing being done at a sensible price, this could be worth double what it's at now.
Just praying that tomorrow morning doesn't bring either (i) more of the radio silence that we've all become accustomed to; or (ii) some deeply discounted placing that sends the SP plummeting to new depths, sub £4.
Excuse my ignorance - but is the wide (circa 9p) bid-ask spread on this stock simply due to the low volume of shares typically being traded; and therefore relatively low liquidity?
I first bought a bunch of these at 99p, then topped up a couple of times during the falls, as it looked like a sound company, so that my average ended up at 52p. I've sold a few in recent weeks to reduce my exposure, making a reasonable % profit in the process. Seeing the price back up in the 80's is making it increasingly tempting to sell the rest - but I can't help thinking there'll be some pretty hefty divs to come in the next year or so - aren't they planning to pay out 50% of PAT? Given the strong growth and prospect of decent divs, the optimist in me still sees these nudging £1 this year.
I took a punt on these when they'd fallen to around £9.17. I'm the definition of small fry - was going to buy £1500 worth, but only put in £750 in case they fell a lot further and I needed to average down. Haven't had the cojones to put more into it thus far, given the constant drops - catching falling knives and all that. Am starting to wonder whether it's bottoming out now and might be worth another £750 to get my average from £9.17 to about £8.50 - or whether I should just hold off to see what the placing price is...
I still feel this stock is considerably undervalued at present levels and in my opinion, anything below 80p is cheap. OK, so people are watching their discretionary non-food spending a bit; but one of UP's key segments is discount retailers. B&M said in its last interim results "the new store opening programme is weighted to the second half of FY18 and we expect to open at least 50 gross new stores". The Range also seems to be opening up new shops left, right and centre. I'd expect them to have a decent view of the market and to have done their sums before committing to expensive new stores. As for UP itself: �3m profit in six months to end of Jan; P/E of about six; Fast expansion in Germany; Debt down by a third from last year; Paying a 2% div at interim alone. My average on UP is about 51p so obviously I've an interest in it going up, but absent any unexpected curve-balls, I really don't see why this shouldn't be pushing a quid within the next 12 months.
Price seems a little shaky, currently down 0.5p on yesterday, but hopefully there'll be an upwards trajectory in the coming weeks. I recently averaged down from 50p to 36p, which in my opinion still represents very good value given this company's assets, performance and potential. I previously dabbled with OPG on and off, dipping in and out for a quick profit - can't believe I was selling it for 97p at one stage, yet here we are with more developed assets and divs being paid, but a share price that's basically the same as a Freddo bar. Can't decide whether to buy a few more....
Is the slide going to end on this? At least when you have a go on a helter skelter, there's a definite end point, and the way down is fun. I'm in at roughly 50p on these, which seemed like a reasonable price at the time. Now we're pushing 42p and falling every day - am I missing something fundamental here? Far as I can see, yes there's some debt, but the power plants are all pumping out juice and they're on the way to getting solar going too. Can't decide at current prices whether I should be cutting my losses - or topping up for a rebound. Don't mind so much if bad news causes a fall - just fed up of the continued decline for no apparent reason.