Member Info for Velo

" Decent recovery last two trading days, no news apparent though "

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No news? I think there might be :)

I am led to believe that the full year trading results may be published next Tuesday, May 21st.

However CLX's website is keeping shtum and there's no mention of the date (last year it was out on the 24th).

It's possible that if there has been a continuation from the H1 interim results, from late last year, then the company may beat the consensus analysts forecasts.

Market sentiment is for the company to come in, in the red, with a small loss but it's possible the company (based on the last known trading update from last autumn) may come in with a decent net profit, and also better than market expectations for revenue too.

No one knows of course - hence if the results do come out next week, there is a possibility that the results could beat market sentiment expectations, even though they will still be lower than results achieved last year - but may be still be better than the market was expecting.

" Decent recovery last two trading days, no news apparent though

Hi Monkshood,

Thank you for the fulsome response. Appreciated.

Have speed-read the posts on here, but will go over them all again in due course. However, it’s clear you do have a v good grasp of CEF’s; whereas personally, as an experienced investor in equities, I’m a novice at these type of instruments. And that leads me (as a life-long trend follower) to the following observation -

I’m curious as to the mindset of investors who are long term holders in this Closed-Ended Fund.

And it’s this - Since its inception back in 2013, each significant SP peak (when stripped of its dividends) - [I make it about 4 significant peaks with currently what looks like the early stages of the next journey to a peak] - is lower than the significant peak that preceded it.

So for the entire duration of its public existence, TFIF, if held for several years means that those investors have, today, less capital (or principal as some term it) than they commenced with.

However, with the dividends built back in, and accounted for in the SP, then the whole thing reverses and it’s a glorious SP chart of bottom left to top right corner, for the progress of the SP.

Therefore it appears, that if not a single dividend was withdrawn, but rather left in the account and added to the starting capital, then the investor has considerably more capital than they commenced their investment with - but only if you collected all the dividends.

(In general I’ve found that a discounted NAV is present during pullbacks/down trends, and at a premium when/during up trends in the SP).

Am I correct/incorrect in that assumption on the history of the net SP when dividends are stripped away, investors have less capital?

- Or only when including dividends, have investors of many a years holding in TFIF, effectively increased their capital holding?

Not in this yet (but I am in the SMIF fund from the same company).

There are 11 funds offered by Twentyfour, but fell across this fund when I saw it near the top end of the FTSE250 for best metrics in that index.

The SMIF fund is a paid-monthly dividends, whereas this is paid quarterly. The yield in this is greater, but am trying to move my entire investing stance to monthly payers - there are a few more monthly's by other companies but depends on which brokers you use who will access these CEF's Income Trusts.

Because as Michael Cain might have not-said :) the reason is: Because not a lot of people know that.

Anyway, interested; but have concerns of lacking diversity if I do go for it.

I believe the next dividend payment is due to go XD circa 18th of this month and paid out on 1st of May. A whopper too - a 5% divi payment in one go of maybe 5p+???

Question - Is that your understanding to? XD this month for circa 5p?

2nd question:

Do other posters have similar holdings from the same company - Twentyfour, besides this fund?

". . . (Got in for 82.odd so pleased with a 6% future divi at that rate) . . ."

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For clarity, it should really turn out to be more of an 8%++ annual divi for this year based on my initial buy-in price today, but I ignored the special rate applied each October for safety.

On a US monthly divi Income trust, you could clearly see each month with sharp saw-teeth progression of the SP in its XD periods.

I couldn't discern any such regular action with SMIF that would assist economical buying in the XD periods - perhaps because 0.5p just doesn't really register in the hurley-burly of XD periods?

- Anyone figured out a system of taking advantage in such short XD periods when attempting to top-up?

Hello all - Well after many a year’s investing experience my initial buy on here this morning marks a new event in my methodology.

I’m overly heavy in cash at the moment and with virtually nil interest being earnet on cash in my SIPP acc, I’ve at last solved something that’s plagued me from day one at the commencement of my investing journey from way back in the day - how the hell do I get those periods when I’m in cash, into some sort of a bank savings account when I’m heavily in cash without triggering a hefty tax bill?

SMIF and its brethren are the answer!

This will be a) the first tranche of several more in SMIF -

and b) the first Investment Income trust (or CEF, Closed End Funds as they call them in the US) of others I have my eye on - all with much higher yields. (Got in for 82.odd so pleased with a 6% future divi at that rate. Only a a penny premium paid on NAV, not too bad as checked back on those posting of paying 74p - against the NAV at those dates, and it wasn’t possible to pay less than than NAV price - even back at 74p.

It’s the same in the US - these investment vehicles are little known by the average investor. I’ve picked up a lot of info researching these CEF’s over the past month or two.

And although I’m new to Income Trusts I’m picking up things fast and have the life-long investing (trend-following) tools to monitor/control them . . . or I believe I have :)

My SIPP is with HL and had the shock of my life on trying to buy SMIF yesterday (it was late in the day so abandoned buying) as they wouldn’t let me proceed until I had taken ‘a test’.

WTF?!?

Up popped an exam paper, which they required me to take because as they said, only “sophisticated investors”, professional investors etc., should get involved in these ‘complex’ investments and they wanted me to tick which type of investors should NOT get involved with these CEF’s.

The other questions were straightforward but the type of investor sounded a bit nanny-state.

So I stuck the knife into ordinary investors clicking it’s not for them - and thought yep, me? Why I’m a sophisticated investor - see how I smoke a cigarette from a long black cigarette holder whilst lounging in front of my screen like a latter day Noel Coward, do you want me to wear my black suit and a bow tie, and drawl my name’s Bond, James Bond next?

However it was a text screen test only and the computer couldn’t see me - but I passed and was despondent that no certificate for sophistication was forthcoming. What? All those questions and no certificate? Tsk! Duuuh!

Full year trading results out to tomorrow ( Tues, 5th )

Just before I sign off and leave you in peace, a quick note on a fluctuating SP for the next 12 months.

First thing is, I’ve come to strongly believe that after a negative trading update, it only qualifies as a genuine profit warning if the SP drops at least 20% - on the day of the announcement!

(I’ve often seen x40% drops on the day of the announcement, but the research papers/ebooks say to expect a minimum of x15%). I’ve always found in general it’s a lot more than x15% so just rechecked Oct 10th SP to be sure

- it opened at 94.6 and closed the day down at 66

- so that’s the top side of a clear x30% drop in one day, easily beating my preference for a 20% drop. So no doubt about it.

2nd thing now the SP is definitely a victim of an official Profit Warning is that the SP will attempt to rise over the next 12 months but it will be quote: “unreliable”.

Some may attempt to draw new conclusions if it rises considerably - and here is the 2nd point - it’s my highly personal opinion - you won’t find it any research papers, it’s my own observations over the years - no matter how high the SP rises I’ve always found it never exceeds past the SP that was present on the day before the announcement - (for the next 12 months) - and that was a very flat open-and close of 95p.

(If it does - please hunt me down and haul me back here, as it will aide my own research).

What that means is, I can certainly entertain the notion that over the next 12 months the SP may visit the 50’s, 60’s, 70’s or the 80’s - but in my opinion it will never exceed (or reach) the SP that prevailed on the day before the Profit warning was issued - which as said was sitting at 95p all day.

My opinion? The SP may never reach 95 let alone exceed past it - at least for the next 12 months. (Hope I don’t come to regret saying that :)

And any further downside to the SP from here? - well that is anybody’s guess. The situation is too unreliable to be more confident.

Earnings? - from Stockopedia (subscription access only).

Sharepad is the main alternative, but that’s even more expensive!

I did trial Research Tree (analysts) for awhile, but was running up too much expense, so cancelled it.

I’ve been with Stocko since 2016 and on the whole have come to trust their data.

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You can get very limited free access though, to things like Simply Wall Street.

Here’s a couple of current copy/paste snippets from S/WStreet on Calnex:

Highlighted with a red warning is -

“ Earnings are forecast to decline by an average of 88.9% per year for the next 3 years “

&

“New major risk - Revenue and earnings growth”

Earnings are forecast to decline …for the foreseeable future.

This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well.

This is currently the only risk that has been identified for the company.”

Well, what a bl@@dy awful mess since I last looked in on my little fav, CLX! Geezalou!!!

In the early days when this forum was just a few months old, I did opine that the PE ratio was too high and therefore far too rich for me - and soon regretted not buying, when I realised bona fide growth stocks are allowed to sport high PE ratio’s - as long as they deliver the goods.

Deliver the goods? Well that’s not gonna happen for the next year or two. If it was too high back then, it’s current forward PE ratio is in Tesla-type stratosphere heights of fancy. It’s showing a forward PE of just under 70 based on the new future reduced earnings guidance. Anyway, let’s get the bad news out of the way.

I believe 48p was the CLX’s IPO launch price - so as of Friday, it’s back to the starting grid and Day-One, all over again.

I’m seeing fair value given in some quarters via the DCF metric as a staggeringly low 12p. I would tend to double that to 24p as a potential low as it’s not uncommon for many IPO’s to fall to half their launch price within their first 3 years, before continuing.

Earnings are forecast to drop from last year’s all time high of £5.91m, to £1.35m for ‘24

- with 2025 showing even worse, of only £0.2m !

That’s the second profit warning this year so the SP will be v unreliable for the next 12 months. True Long term holders can buy the dips (small amounts each time as SP unreliability makes the floor questionable in that 12 months).

Although the RNS said:

“REVENUE FOR FY24 WILL BE IN REGION OF 20-30 PER CENT BELOW

CURRENT MARKET EXPECTATIONS

IN FIRST SIX MONTHS OF FY24, COMPANY'S ORDER INFLOW HAS

REMAINED

AT SUBDUED LEVELS

H2 FY24 WILL BE SLOWER THAN ANTICIPATED.

CONFIDENT IN A RETURN TO GROWTH IN FY25 “

- the market has already decided and forecasts for ‘25 are for a measley £200,000 in earnings.

So anyone’s guess when a bounce may occur. No doubt there will be ultimately - but not in the next 12 months, barring occasional short-lived false-positive rises.

This is beyond the control of the company, so not a management fault issue. All companies go through these swings. It’s not an insolvency issue.

Have a plan if buying dips - not gut feelings or endless random guesses of: “This is the floor”.

The company will survive this but clearly it’s going to take a year or two. Profit warnings nearly always turn out to be worse than the initial RNS leads you to believe. The forecast guidance for ‘25 earnings is truly shocking. Wasn’t expecting that.

Still have a soft spot for CLX -

BUT first things first - the H1 trading update will be published next month round about the 21st November. All market forecast guidance will be revised by the market after that is received.

Even if I wanted to buy right now - I would never buy before a trading update is due to be released, unless I had some sort of information that no one else had.

Wanted to correct an error in my post below, so with the SP intradaying into the 60p’s briefly on Friday, might as well do so now.

First off - Thanks for the appreciative reply petrencf; the error I’m referring to is my getting the date incorrect since I last posted here,

- it was March ‘22, not March this year. So the profit warning I was referring to below occurred in March ‘22, not March this year.

Hence the recovery I was alluding to, for spring next year is out of date and therefore null and void (should there be an SP recovery next spring then just sheer luck it times with my previous post).

Generally, I don’t do prices (I’m a trend-follower by nature) but that intra-day low dip into the 60p’s yesterday (Friday) brought something I was checking up on, back into mind, that might now be revealed. And that is, I was checking DCF (Discounted Cash Flow) metric versus market guidance, the modern version of Warren Buffett’s ‘Margin of Safety’ metric, and I’m seeing on screen fair value as - 61p!

Couldn’t believe a figure so low, especially as ALL the analysts are citing well over a £1+ as a target price!

It must be said, that the DCF metric is a secondary guideline tool and not to be taken literally. However, with 60’s briefly showing it’s face yesterday I thought if things do take a further turn for the worse, a small punt in that area should be a good longer term safety area to invest in. (However, as things are oversold at the moment wouldn’t be surprised if the SP did the opposite and mossies back on to the north road for awhile).

SP is still strongly bearish at the moment, so an interesting few days next week.

What may put a stamp on near future SP direction, will be the full year results which will be published in a couple of weeks, circa Tuesday, 14th November.

And as best folklore advice is to: never buy before an expected, imminent trading update, I can’t see myself buying before that date.

... I'll be a monkey's uncle if this doesn't run hot and bullish for the next 3 or 4 months.

... It's a sentiment and cyclical thing :)

" Should start to build SP now up to results with forward guidance and macros easing, feel we are at the bottom now...bought more this week. "

- and

"Netz it’s a tough call."

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I have long forgotten where I read it or if from a book, but the advice is imprinted upon my memory, or it might just be stock market folklore experience that I once read in an article somewhere. However, I try to abide by it as my primary guidance when I'm in control of my emotions and gut feelings are locked up in a box, and it's this:

When deciding to Buy:

- Never buy just before an imminent trading update result is about to be released.

And when the decision to Sell has been made:

- Always sell before an imminent trading update result is about to be released.

- unless you already possess information that no one else, or few others are aware of.

The past half dozen years examination of Directors' buys won’t fill you with “confidence” of when to buy, if that’s what some would like to see. They were buying during some severe down trends in the SP, and ignoring some years of bullish rises.

2017 was notable for a year of a tremendous rise in the SP. Not a single BOD member bought in that year. Zero buys!

But there was a massive total in sells that year - well over £26m in sells!

But regardless, a brilliant rise in the SP that year.

2018, 3 buys of £200k - the SP fell alarmingly!

2019, 2 buys of 150k - An indifferent sideways performance on the whole, ending with a modest year rise over the commencement of that year.

2020, 4 buys of almost £350k - And bingo they were well rewarded that year.

2021, 5 buys of £260k - And the SP tanked and crashed that year.

2022, Another 5 buys of £1m in total! - But the tanking SP just carried on sinking.

2023, - Not a single buy yet and it’s October next week! The SP appears to be consolidating around a floor in this second half of the year - and no buying yet.

BOD don’t appear to have a good record of personal buying to pin your hopes on. That's not a deal breaker though.

Correction to yesterday's header, should have been -

"Heads up - Oct 25th!"

===========

“ Why ppl saying 17th Oct???”

Quite right Temuchin. My apologies to all. Should have been Oct 25th!

I usually add ‘circa’ or ‘-ish’ when obtaining dates other than from a company’s website as had a run of some companies not advising of the latest dates until days beforehand, so I go elsewhere for consistency in dates.

- Looking forward to the 25th for the definitive result (and the '24 forecast guidance).

:)

Ha!

Oct 17th - that's the date I'm seeing when the full-year results will be published.

With over £200m+ loss reported at the half year, some analysts have thrown the towel in on computing the likely full-year results and are sitting things out until the 17th - such is the complexity of the situation.

I've seen the current analysts' forecast for the final loss for the full year - it's a lot less than that humungous loss published at the H1 result! Something I suppose.

Fantastic achievement to have already reduced the inventory by a further 30% for this trading year!

- Despite a triple-figure millions write-down to start the year off!

As said in the RNS, such has been the discounting to reduce inventories it's affected 'normal' profitable product lines. Debt will be the largest ever by the year-end! (daren't post what I'm seeing as likely).

Have read the discounting will still be in force at the trading year end of 2024. So impossible to talk of profit levels comparable to those of yesteryears for some years yet.

However, I do think that huge 30% inventory overhang reduction achievement is well worthy of praise.

And if the Oct 17th results don't increase fears further - then this new full year ending next year Aug '24, should close with some optimism for the future - but all hangs on the full result later in October; which is still in the thick of things debate, as to how large the loss will be.

Depends on your definition of 'looks expensive' :)

A Rolls Royce saloon is expensive, yes? But if you use it as a wedding hire car you can have a second income whereby over the years instead that income could repay a substantial amount of the purchase price paid for the roller. And IMO, that's the case here.

So yes, they paid the full Monty. It was no boot sale bargain. But consider what's been bought. Wait a minute let one of the analysts (from behind a paywall!) explain it:

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"DOTD

Despite the full-looking price paid, I’m going to give this deal two thumbs up.

There are times when I have to do a lot of work to figure out the point of an acquisition. This is not one of those times: the companies already serve the same companies with products that are so complementary to each other that they have already been partly integrated.

In a situation like this, it’s harder to find a reason not to combine the two enterprises. They can now work together more efficiently for their existing customers and improve their service to target new ones.

On the financial side of things, Dotdigital can afford it and still has a significant cash balance.

I think I’ll maintain a positive view on these shares as the valuation doesn’t seem too excessive when you consider that it has net cash, a fine track record of profitability, and good quality metrics. So it’s worth studying in greater detail.

Today’s acquisition will boost revenues by around 10% and should eventually help to boost profitability, too. That might take a few years but then patience is a virtue!"

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Was going to post my own findings today but it would be an even longer post than this!

However this is a recovering Profit Warning stock (My post in March this year) so 'the herd' is unlikely to arrive until spring next year. In the meantime any deeper floors look tempting. It is still in a downtrend which I guess won't cease until the end of October (IMO only) but may still be opportunities for a cheaper entry all the way to spring next year (maybe).

So in short I expect a recovery from next spring onwards. Any cheap entry will be v tempting and I'll likely be back in after years out of this stock :)

Posts I'm referring to below should eventually be deleted . A fraudster using dual identities.

Clearly a pss-take on my previous posts.

Whoever the joker is, they're too cowardly to post under their own ID so created a brand new ID.