The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Cash obviously provides an absolute base at around £1.50 so would be a short term arbitrage opportunity if it dropped below.
Then again, long term that cash won't last long if they do nothing, and will see a slow drawdown as the years go by, accelerated of course if any acquisitions made fail.
Forget ncyt and it's business now as its valued as diddly squat. The real question you should be asking is "do I believe in and trust the director to use this £100m and make me money"? Bit too early in his tenure to tell, but researching the directors previous sucesses/failures is now crucial for any prospective investor. He has basically become a fund manager.
Nice to finally see. The writings on the wall with this one given their resource
Why this was sold off a couple of days ago with tech stocks god only knows. Presented a fantastic opportunity at 1750.
There's no stopping this now. Cat is out of the bag
They pretty much blew it really. Revenues from non covid starting in Q422 (if indeed they do come online) is laughable and can't plug a pin prick let alone a gaping 43% group revenue (86%/2). What have they been doing for a year? 40m dispute could take years.
When will this company turn around and start revenue growth again? Looking at least 3 years out, and there's no guarantee of non-covid products being a hit. It's all risk from here with very little reward.
Such a shame. They needed a much more aggressive board to make some key acquisitions and pivot away from covid much faster. Hoarding cash is ridiculous at this point, just prolonging the inevitable. Death by a thousand cuts, or out with a blaze of glory. I prefer the latter.
Of course, death by a thousand cuts isn't all that bad for those who can sustain a salary for failure for at least another decade. The 100m is pretty much their salary for the next 20 years.
Can't say I disagree with you kallu. But watching a stock drop 20% in a day for no reason takes its toll on unseasoned investors, and even us that have been through it multiple times. 95% are unseasoned and have probably never seen a bear market. You can almost say watching such a vicious drop you can't blame them.
Those who are real investors know what they are buying into and the problems the company faces and has a good idea of sentiment, balance risk and buy an amount in accordance to PF weighting/risk not to overexpose and then sit back and let it play out. Gamblers will try their luck on volatility for a quick 10% and sell at a loss if the quick buck doesn't materialise.
Contrarians love bear markets. As long as the company has no irrepairable problems, it's a risk worth taking at such a markdown. I wouldn't call contrarians gamblers....they are some of the most savvy out there and have an eye for bargains whilst everyone else loses their mind. Sure they have higher risk tolerances and get it wrong, but some of the best gains have been made buying at peak fear.
"You obviously lack the knowledge on how to value a firm" says the person who believes profits are more important than revenue growth on a high growth company?? This poster must think growth is free.
Seriously 90% of investors in the UK need to educate themselves on what a growth company is, how they work, their modus operandi and what to expect and NOT to expect, I.e. profits, share buybacks and dividends!
You can get that over at unilever! Sell out now if you want profits, buybacks and dividends because you WONT get it here.
Boohoo performing better than others in the "high growth sector" today. Not liking this, but nasdaq was well overdone so nice to see that come down a bit. Far too much loose money over there. The only Downside is that it will drag everything down with it for the next couple of months.
Things will decouple soon. When bank stocks are going down too given inflation, interest rates ect you know the market is throwing a wobble. The only thing that will perform today is gold.
There was a bit of a disconnect with revenue/mcap ratio compared with boohoo and asos. Relevant because these 3 have a strong positive correlation.
Not anymore. £1 would give this an mcap of 1.2bn? Not saying it can't happen, but quite insane if it does considering growth. A nice long term opportunity for those who have a 12-24 month timeline.
I'm becoming more and more aligned with porsche1946 hardline view on ftse100 and UK in general.
Amazing to see the old dusty money uproar when their beloved unilever actually tried to do something about their stagnating growth and margin erosion due to inflation.
The old grannies don't want to dust down unilever and restart growth. Well....death by a thousand cuts it is. Shareholder attitude towards change is ridiculous.
Boohoo was always a more leveraged play in this sector than asos and primark. When things are good, boo booms. When things get bad...they will perform the worst.
Key infrastructure would change this. I'm sure management have learnt from their errors of relying solely on freight to deliver to the Americas and pushing back warehousing. But the business model itself; evidence would suggest it not only works, it thrives! In years to come we will look back at this period and think of it as a stress test in which boohoo passed and still managed to grow.
Im hoping to hear a plan of action regarding US warehousing soon.
https://www.telegraph.co.uk/business/2022/01/18/heading-300-barrel-oil/
The results weren't disasterous by any means like some are making it out to be. A 30bps margin erosion is far better than others have performed given headwinds and still growing at a fair clip, although slowing and given there is not a lot of history to go on which will cause some jitters as THG need to prove themselves. Didnt unilever report similar margin erosion....didn't hear "profit warning" getting thrown about there. Then there is the general market mood which is to flee from growth and head to value.
But fools throwing around phrases like "profit warning" is laughable and shows the mentality of UK investors. Try saying that in the states about amazon or tesla and you will be laughed at. That phrase is being used far more liberally these days and completely devoid of any function when talking about growth stocks. "Growth warning" is a far better term to use. Of course the former is a simple and effective phrase to use when your aim is to cause panic among novice investors.
Once more, if you want to see profit/ebitda then sell your shares immediately, stay away from growth and buy unilever stock! The whole idea of growth is to spend in order to grow. A little thought experiment....if THG, ASOS or BOO reported record profits and bulging Bank accounts by slashing spending and acquisitions so growth was in low single digits or flat, would the SP be higher or lower than now? I am willing to bet much much higher despite the fact that their business would be worse off for it. I get growth risk factor, but if you think you can do better by sticking your money in a bank waiting to see some interest passed on to you or unilever which can't even beat inflation, you need to go back to land cuckoo. The market is acting as if they are about to recieve 10% interest rates from their bank haha. Cash is literally trash and would much rather buy growth in any situation.
Market is going through one of its silly phases. All will turn out well in the end for well run companies.
Good news about finally having a CEO in sight. Today's chart looks very similar to that of THG. Why we are getting tarnished with the same brush as THG god only knows, but the market works in lockstep across sectors when sentiment is bad so just have to wait until things change with headwinds easing.
Agreed there is scope for maneuver for this if returns come endemic.
I guess they have to tread carefully though. It's a fine line between tightening policy and angering the market they have created for themselves.
You have to think that for each user account, there has to be statistics on this user regarding purchases, number & nature of returns and profitability of that account, I.e. unit economies. If a user account falls below x, policy can be tightened to weed out these accounts and improve unit economics. After all, an account that loses you money is pointless to keep. Only boohoo know the exact dynamic of this issue, but if postage stays high the customer may be a little more lenient; almost expecting it if you like. Maybe now is the time to act?
ABF heyday was back in the naughties before it hit the buffers in 12'-13'. Since then it has done nothing but dissapoint. Can't see anything material that has changed there other than the same management waffle about rejuvenated growth that has failed to materialise for a decade. Why should now be different??
They are going through a transitory period of their own. Finally just about recovering from losses made from covid before resuming down. Boohoo is opposite, in a lull period until headwinds ease....which they will.
The troll has been trolling boohoo for years. I guess a stopped clock gets it right twice a day.
The whole debate about returns is very knee jerk. We cannot exactly call this a trend yet so any action the company take would certainly rock the boat. However if it becomes a trend, then there are a couple of solutions to combat this.
1) monitor accounts for abuse of this. These customers have absolutely no benefit to the customer so why do business with them. Something like 10 returns a month should be a massive red flag so an account ban should happen. Win win for boohoo as it passes the problem on to competitors.
2) fair use policy. I can see this course of action being implemented if returns remain high. Of course unlimited returns for damaged items will remain, but for items not damaged, this could work. They can also guise it as doing good for the environment, so again a win win for boohoo. Weed out the non profitable customers abusing returns. Customers that purposely damage items to return can be weeded out by statistics. Of course if one company implements this, I think it will cascade to others as no company likes this perk they have created themselves.
Then there is the arguement of you made your own bed, so lie in it.
To continue to grow in the US shows how infrastructure is vital. Margin degradation less, trading as expected and no downgrades. Boohoo take head! Everyone was expecting a boohoo style forecast miss....forgetting asos is a different animal with infrastructure in place and at a far more mature stage. Bring on £30