I appreciate you've probably got a lot on your mind at the moment with switching on subs but this is just a memory jogger to ask if you could please include an embedded link to Stockopaedia for all the shares you mention whether they are full writeups or short articles. It would be great if Mr C could also do the same thing.
By the way, I received an email from you via Substack today informing me that my £100 has been collected so it looks like things are working correctly.
Re links to Stockopedia, I think this would make a good subject for another reader poll here, ie it would only be useful for Stockopedia subscribers. So I'll try to remember to do a poll next week. There's so much happening at the moment, so it's a question of taking one step at a time, this is not the finished thing yet! So far, so good though :-)
It's very easy. The first time you click on an embedded link it takes you directly to the Stockopedia's StockRank page/chart but you are asked for your Stocko password to view the StockRank info. You only have to sign in on the first occasion. From then on, you go straight through to the StockRank page/chart everytime without needing to sign in. This feature is really useful when I'm reading Paul's Substack on my mobile phone. No need to jump in and out of apps and websites.
Michael, its good to see you on Paul's Substack as well as Stocko and as usual I welcome your thoughts and opinions.
Hi Paul. Not sure if you know but it looks like non payers can still view the site and all contents (I haven't signed up to pay yet as been away this week). Should it all be paywalled off as of now? If so it seems it isn't.
Also will the daily podcast still go out free? As much as it's a good way to drive users to this page I think giving the full daily report on there for free may reduce subscriptions and your work is worth the subscription. Just my two pence.
I thought for today I'd just get the subs up & running, and then work out a strategy for paid/free content over the weekend. There are various options, so I'll probably do the one where articles have a paywall near the top, like a "read more" button, and/or put a delay on articles/podcasts, so that paying subscribers get the latest content in full, then it goes free say a week later.
GAW was not a surprise. Anyone who sells on Amazon will probably understand Keepa/Helium data and sales ranking. Space Marine 2 has been a best seller this autumn, so the news has been coming. But lovely news nevertheless! I did post this info a few weeks ago on Stockopedia (ChrisR).
On $GAW.L it is interesting to note taht on a 10 year view Games Workshop is the best performing share in the FTSE All-Share at a 40.3% CAGR. The next being 3i group with a CAGR of 24.9%. Seven shares in the US beat this (including NVIDIA and Advanced Micro Devices ) so is in rarefied company.
I am glad to have been them in since January 2018 though unfortunately with a hiatus in March 2020, for reasons I won't bore people with again. It has generated a profit equivalent to 18.2% of my current portfolio value.
With a company with this record I would say the rating PE(f) of 24.7 is not that punchy. That said I am probably going to top slice (I need some cash anyway) as it is now 19% of my portfolio.
H1 25 net revenue growth of 6.0% and underlying Group FD EPS increased 24.0%, with strength in parcels and Multipay. Net debt increased from £67.5m at FY 24 to £86.8m, with £16.2m of investments. We maintain our estimate of 10% earnings growth in FY 25 with cost savings and Parcels growth. Looking at the 4 divisions: 1) At Payments and Banking, there is growth at MultiPay, and Open Banking, neobanking, and obconnect should drive EBITDA; 2) At Shopping, there was 10% growth in net revenues from Service fees; 3) At Parcels, net revenues increased 57% and management targets 250m+ parcels in 2-3 years; and 4) At Love2shop net revenue increased 7.4% and we see further opportunities for growth, notably the new In Comm partnership. PayPoint’s position on the high street differentiates it in the crowded payment space; a CY 25 P/E of 11.3x and ordinary yield of 4.7% are too cheap.
Also, they won banking contract in New Zealand for obconnect
Not in the news stream but are #ITV and #STVG worth viewing as Value plays?
#ITV has dropped from 80p ish to low 60p's with Stocko showing fPE 6.8 and Yield of 8%.
#STVG 201p down from 280p through the summer and I had tagged as worth nearer 360p on multiple of 11x next year's EPS. Born optimist! Stocko showing fPE 6.3 and Yield of 5.7%.
Opportunity or falling knife?
BTW Substack doesn't seem to like my Credit Card. Is this not an option for payment? Or is it my Credit record?
For me there are two clear opps, but I'm on the fence whether they are credible opps.
- Studios recovers fully and then keeps growing, as the streamers start to compete hard against each other again and commission more original content.
- TV advertising snaps out of the declining trend, as marketers realise that the shift to digital performance advertising has gone too far, and traditional channels like linear TV, digital video ads deliver better returns.
The problem though is that in my realistic bear case scenario, I have 6.6p EPS for next year, whilst brokers have 8.7p EPS. So hence I'm not buying yet at these levels. There are also 4 disclosed shorters here, the highest in a while, 3.3% declared. So its not only me seeing a bit of a realistic bear case scenario...
My mother is the only person I know who still watches linear TV from traditional providers. Now my friendship group is very tech savvy and half of them work in media, so possibly not a good sample. But I wouldn’t touch those businesses with a bargepole. Of course that’s just my very future-obsessed eye. People make money on Smith’s News, so what do I know?
Looking forward reading about $GAW.L later (I hold, it has certainly added a sparkle to my portfolio today; it is my second largest holding behind $BRK at 13.6% of the pf).
Just wanted to say I am glad the subs have kicked in today and hope that pledges have followed through with cold hard cash!
I'm delighted to say that that pledges have *more than* converted into subscriptions, so a big thank you from me to everyone who has backed my project here. I'll work flat out for you all in 2025 and beyond!
Morning Paul, Just to let you know Halifax obviously know you are a dodgy character and bounced my direct debit, they then texted me later to inform me!!!! and do I want to pay for further subscriptions.
I haven't abandoned you, just need to work out how to get this months payment to you.
Paul, have you thought about it you want your work to be accessible to AI or not? I expect your subscribers-only work won't be accessible to anything that's just scraping the web for free stuff. I suppose it's possible to block it, though I don't know how easy it is, because when I tried flinging a page on Yahoo into Notebook LM, it was blocked. Your site isn't blocked to AI for subscribers. Notebook LM turns documents into a two-person podcast, and as an experiment, I fed your page with notes on Solid State (SOLI) into it, along with documents from the company. BTW the results were mixed, at best. Notebook didn't pay enough attention to your notes, maybe because it favoured document size over quality and recency. It referred to you as "Substack", and said Substack thought Solid State was undervalued, while I'm fairly sure you didn't say that. It was just an experiment and I won't do it again if you don't want me to.
Yes, it's a good point you raise. Someone previously put one of my written articles into Notebook LM, and it produced a totally fake CNBC-style debate which I found both fascinating and horrifying. Like a lot of AI stuff, it appeared to be c.90% accurate. But it also got some of the nuances wrong. And the whole thing was fake, which really worries me. Don't be fooled by AI, would be my current conclusion. It seems dangerous deception.
Do we think that AI is actually "intelligence"? Strikes me it is something approximating, language predicting. Not intelligent at all. But maybe I have misunderstood?
I'm a bit late to comment (not properly logged in before today) but to back up your "not intelligent at all" comment, this was graphically illustrated by an article on FT.com (open access article) on September 12 2023 (probably out of date by now!) titled Generative AI exists because of the transformer This is how it works. As it uses their (long) graphicalmode I don't see a link to copy but you could try searching on the title or https://ig.ft.com/generative-ai/
My view is that assuming the production goes ahead GAW will continue to benefit from whatever financial agreement has been put in place but could also benefit from a similar way to how Bloomsbury and their best selling author Sarah J. Maas - new book = sales of old books. But, with GAW each production will drive more sales of its minatures and the popularity of gaming eco-system. Indeed, with the popularity of adventure heroes e.g. Marvel franchise who knows how far this could go.
Just having a look at Paypoint’s results from yesterday. I think it’s looking interesting again. Seeing as we have renewed inflation concerns, the market is looking for pricing power.
Warren Buffett’s famous cross the street test uses the example of brand name chocolate bars. Which is exactly what is sold through Paypoint’s terminals. Along with coca-cola, Kellogg, Heinz and all the rest.
Paul has made the point here previously about how well the grocers have been able to pass on price increases to customers and this is why.
Paypoint may not have a recognised brand itself but it’s able to access the pricing power of those that do.
Regarding Games Workshop, I think you've hit the nail on the head regarding the licensing revenues and general lack of visibility. It's one I've done a fair bit of work on over the years and argued the toss with various fellow investors who struggle to get their head around how they continue to grow at 10% or so annually.
Ultimately you have to trust in management's ability to continue to grow international and online revenues- I think they've earned it over the years and I like the straightforward accounting and communications.
As for valuation, I've always valued it on core revenue and regarded licensing royalties as a nice kicker. Ultimately I came to the shorthand approach of buying whenever the forward P/E dipped materially below 20x and sitting on my hands the rest of the time.
For all those interested in this company, there is a very good ‘Twin Pete’s’ podcast from a couple of months ago with a guest called Matt? Can’t remember his second name but he is in the industry and really knew GAW really well. He talked about their business and also about the licensing. From memory, I would advise anyone interested in GAW to look this podcast up, because this guy really knew his stuff! I don’t hold but have been tempted, I only don’t hold because, (probably incorrectly) the valuation is quite high.
By the way, there is GAW shop in Woking, I think, and some of the ques and people I’ve seen in the shop at times was also a plus that made me consider holding.
Although I don’t hold them and don’t have any analysis of figures on GAW, I think if I was holding, I would continue to hold. Whether any of the above has helped, I don’t know, but good luck to all who hold this one.
Have been mulling over my (reduced) holding in CARD Card Factory, impacts of the headwinds (increases in NIC, business rates and min wage) and how much these are already in the price - halved in a couple of months)
I mystery-shopped their High Holborn branch yesterday - the interior was immaculate, with all shelves/walls covered in neatly, fully packed, colourful products.
I was concerned it was literally empty but was told they have a manic rush before work and then it resumes around 11.30am.
The manager Tracy explained each store has a different customer/sales profile - this being office driven with customers encouraged to add a couple of balloons to a large card to create low-cost team occasions.
While there had been challenging times during covid staff thought the company had managed this well and fairly and longer-term, committed employees like her had remained with the business when normality returned.
She was an excellent ambassador for the company, readily understood their challenges but also “where the business was” and other team members seemed to have a shared sense of purpose.
If all shops were run like this it would be reassuring.
Great work, The Jayman, I love mystery shop/dine reports!! It's only ever one store, so we shouldn't necessarily draw company-wide conclusions from whether a site seems busy or not, but it sounds like you've picked up on some good aspects of the company. I'm surprised CARD shares have fallen back so much, but I suppose the H1 results disappointed and leave a lot to achieve in H2, making some people worried about a possible H2 PW. I am tempted to buy a few at this price though, maybe just a small opening position, to be on the safe side.
I normally buy in bulk for family around this time of year from Card Factory online. If you look at their online store you can see they have a lot of new gifts and cards they didn’t have last year at noticeably higher price points and more “as in store” individual cards rather than the individual personalised or boxes of Christmas cards. I noticed a lot more Disney gifts/baubles too so some gifts could be at lot lower profit margins. I personally bought my new baby niece a roughly £16 festive fancy dress as an impulse add on this year. It’s not actually bad quality and I think my sister will be really happy for the insta photo op. I am however quite concerned that the nic increase will massively impact the bottom line and have actually adjusted my valuation of Card because of it but I also think the management are quite skilled at managing and have a degree of confidence that they will adjust to get closer to their targets. The management could perhaps rightly also be accused of being poorly skilled at communicating to the retail investors! What happened to this US wholesale deal?!
CARD are interesting. The H1 results were badly received but actually they had been well flagged and were expected so it seems perhaps in the euphoria of the stock overhang clearance investors forgot what H1 would be and then just bailed. But perhaps an opportunity arises from that because I suspect the likelihood of an H2 warning is less probable than investors think. CARD have raised prices in some cases by c. 20% at the low end but are still excellent value so the profit bridge the FD put up at the results presentation showing how the full year is made up appears to make sense.
Of course the budget added a dampener but I reckon a 2-3% increase will cover NI and min wage increases. That doesn’t feel outrageous in context of their current pricing. Be interesting to see if they will pass this on, had already factored some in to expectations and/or will absorb some through cuts/efficiencies.
Anyway I like CARD because I think it is really well run. That doesn’t necessarily mean it will perform of course - sometimes macro conditions just deflate the balloon but at these levels and likely dividend yield seems like quite a lot of the risk is priced in to me. Fingers crossed!!!
I've just discovered this Substack thanks to Cockney Rebel's recommendation, and what can I say, it is a blast! Please keep up the good work! :-)
How kind, thanks Simon!
Spread the word please. I don't have any social media.
Hi Paul,
I appreciate you've probably got a lot on your mind at the moment with switching on subs but this is just a memory jogger to ask if you could please include an embedded link to Stockopaedia for all the shares you mention whether they are full writeups or short articles. It would be great if Mr C could also do the same thing.
By the way, I received an email from you via Substack today informing me that my £100 has been collected so it looks like things are working correctly.
Good luck for the future.
Cheers David.
Hi Logical David,
Re links to Stockopedia, I think this would make a good subject for another reader poll here, ie it would only be useful for Stockopedia subscribers. So I'll try to remember to do a poll next week. There's so much happening at the moment, so it's a question of taking one step at a time, this is not the finished thing yet! So far, so good though :-)
P.
It would get my vote but a nice to have rather than a must depending on how much hassle it is.
Relatively easy to switch windows to Stockopedia and enter the ticker for me.
Hi Michael,
It's very easy. The first time you click on an embedded link it takes you directly to the Stockopedia's StockRank page/chart but you are asked for your Stocko password to view the StockRank info. You only have to sign in on the first occasion. From then on, you go straight through to the StockRank page/chart everytime without needing to sign in. This feature is really useful when I'm reading Paul's Substack on my mobile phone. No need to jump in and out of apps and websites.
Michael, its good to see you on Paul's Substack as well as Stocko and as usual I welcome your thoughts and opinions.
David.
Had seen the last part. That is very kind of you to say.
Oh no I meant for Paul to implement rather than the user to click thru. 🤣
Regards
Michael
Hi Paul. Not sure if you know but it looks like non payers can still view the site and all contents (I haven't signed up to pay yet as been away this week). Should it all be paywalled off as of now? If so it seems it isn't.
Also will the daily podcast still go out free? As much as it's a good way to drive users to this page I think giving the full daily report on there for free may reduce subscriptions and your work is worth the subscription. Just my two pence.
Hi Wayne,
I thought for today I'd just get the subs up & running, and then work out a strategy for paid/free content over the weekend. There are various options, so I'll probably do the one where articles have a paywall near the top, like a "read more" button, and/or put a delay on articles/podcasts, so that paying subscribers get the latest content in full, then it goes free say a week later.
One step at a time!
Regards, Paul.
GAW was not a surprise. Anyone who sells on Amazon will probably understand Keepa/Helium data and sales ranking. Space Marine 2 has been a best seller this autumn, so the news has been coming. But lovely news nevertheless! I did post this info a few weeks ago on Stockopedia (ChrisR).
On $GAW.L it is interesting to note taht on a 10 year view Games Workshop is the best performing share in the FTSE All-Share at a 40.3% CAGR. The next being 3i group with a CAGR of 24.9%. Seven shares in the US beat this (including NVIDIA and Advanced Micro Devices ) so is in rarefied company.
I am glad to have been them in since January 2018 though unfortunately with a hiatus in March 2020, for reasons I won't bore people with again. It has generated a profit equivalent to 18.2% of my current portfolio value.
With a company with this record I would say the rating PE(f) of 24.7 is not that punchy. That said I am probably going to top slice (I need some cash anyway) as it is now 19% of my portfolio.
Regards
Michael
Correction $GAW.L is 13.55% of portfolio.
Paypoint research notes
PAnmure-
H1 25 net revenue growth of 6.0% and underlying Group FD EPS increased 24.0%, with strength in parcels and Multipay. Net debt increased from £67.5m at FY 24 to £86.8m, with £16.2m of investments. We maintain our estimate of 10% earnings growth in FY 25 with cost savings and Parcels growth. Looking at the 4 divisions: 1) At Payments and Banking, there is growth at MultiPay, and Open Banking, neobanking, and obconnect should drive EBITDA; 2) At Shopping, there was 10% growth in net revenues from Service fees; 3) At Parcels, net revenues increased 57% and management targets 250m+ parcels in 2-3 years; and 4) At Love2shop net revenue increased 7.4% and we see further opportunities for growth, notably the new In Comm partnership. PayPoint’s position on the high street differentiates it in the crowded payment space; a CY 25 P/E of 11.3x and ordinary yield of 4.7% are too cheap.
Also, they won banking contract in New Zealand for obconnect
Happy pay day Paul! I'm glad your doggo is fine and I can't wait to see some pics <3
Not in the news stream but are #ITV and #STVG worth viewing as Value plays?
#ITV has dropped from 80p ish to low 60p's with Stocko showing fPE 6.8 and Yield of 8%.
#STVG 201p down from 280p through the summer and I had tagged as worth nearer 360p on multiple of 11x next year's EPS. Born optimist! Stocko showing fPE 6.3 and Yield of 5.7%.
Opportunity or falling knife?
BTW Substack doesn't seem to like my Credit Card. Is this not an option for payment? Or is it my Credit record?
STV,
I think that Rockwood the Richard Stavely vehicle have this one on their books?
Graham W.
ITV is on my radar.
For me there are two clear opps, but I'm on the fence whether they are credible opps.
- Studios recovers fully and then keeps growing, as the streamers start to compete hard against each other again and commission more original content.
- TV advertising snaps out of the declining trend, as marketers realise that the shift to digital performance advertising has gone too far, and traditional channels like linear TV, digital video ads deliver better returns.
The problem though is that in my realistic bear case scenario, I have 6.6p EPS for next year, whilst brokers have 8.7p EPS. So hence I'm not buying yet at these levels. There are also 4 disclosed shorters here, the highest in a while, 3.3% declared. So its not only me seeing a bit of a realistic bear case scenario...
My mother is the only person I know who still watches linear TV from traditional providers. Now my friendship group is very tech savvy and half of them work in media, so possibly not a good sample. But I wouldn’t touch those businesses with a bargepole. Of course that’s just my very future-obsessed eye. People make money on Smith’s News, so what do I know?
Hi Paul
Looking forward reading about $GAW.L later (I hold, it has certainly added a sparkle to my portfolio today; it is my second largest holding behind $BRK at 13.6% of the pf).
Just wanted to say I am glad the subs have kicked in today and hope that pledges have followed through with cold hard cash!
Regards
Michael
Thanks Michael!
I'm delighted to say that that pledges have *more than* converted into subscriptions, so a big thank you from me to everyone who has backed my project here. I'll work flat out for you all in 2025 and beyond!
Best wishes, Paul.
Frankly I still don’t know how you do it and have time for the rest of life but thank you.
Morning Paul, Just to let you know Halifax obviously know you are a dodgy character and bounced my direct debit, they then texted me later to inform me!!!! and do I want to pay for further subscriptions.
I haven't abandoned you, just need to work out how to get this months payment to you.
GB
Hi GB,
I'm sure it will work itself out. Thank you for support, much appreciated! P.
Paul, have you thought about it you want your work to be accessible to AI or not? I expect your subscribers-only work won't be accessible to anything that's just scraping the web for free stuff. I suppose it's possible to block it, though I don't know how easy it is, because when I tried flinging a page on Yahoo into Notebook LM, it was blocked. Your site isn't blocked to AI for subscribers. Notebook LM turns documents into a two-person podcast, and as an experiment, I fed your page with notes on Solid State (SOLI) into it, along with documents from the company. BTW the results were mixed, at best. Notebook didn't pay enough attention to your notes, maybe because it favoured document size over quality and recency. It referred to you as "Substack", and said Substack thought Solid State was undervalued, while I'm fairly sure you didn't say that. It was just an experiment and I won't do it again if you don't want me to.
Hi Hoenir,
Yes, it's a good point you raise. Someone previously put one of my written articles into Notebook LM, and it produced a totally fake CNBC-style debate which I found both fascinating and horrifying. Like a lot of AI stuff, it appeared to be c.90% accurate. But it also got some of the nuances wrong. And the whole thing was fake, which really worries me. Don't be fooled by AI, would be my current conclusion. It seems dangerous deception.
Do we think that AI is actually "intelligence"? Strikes me it is something approximating, language predicting. Not intelligent at all. But maybe I have misunderstood?
P.
I'm a bit late to comment (not properly logged in before today) but to back up your "not intelligent at all" comment, this was graphically illustrated by an article on FT.com (open access article) on September 12 2023 (probably out of date by now!) titled Generative AI exists because of the transformer This is how it works. As it uses their (long) graphicalmode I don't see a link to copy but you could try searching on the title or https://ig.ft.com/generative-ai/
Posted on yesterdays report but adding to today in case it is missed.
Cmcx. Taking more of a pasting today. Next support is 250 :o.
Found this story today which might explain some of the bearishness
https://www.financemagnates.com/forex/brokers/cmc-markets-wrote-off-28m-investment-in-blockchain-firm-strike-x/
Thanks for this, overall sounds quite positive
Paul, thank you for your update on Games Workshop (GAW).
It will be interesting if GAW and Amazon get their partnership off the ground and in production:
https://www.msn.com/en-us/money/other/amazon-and-henry-cavill-might-lose-warhammer-40-000-after-december/ar-BB1qUCvp?apiversion=v2&noservercache=1&domshim=1&renderwebcomponents=1&wcseo=1&batchservertelemetry=1&noservertelemetry=1
My view is that assuming the production goes ahead GAW will continue to benefit from whatever financial agreement has been put in place but could also benefit from a similar way to how Bloomsbury and their best selling author Sarah J. Maas - new book = sales of old books. But, with GAW each production will drive more sales of its minatures and the popularity of gaming eco-system. Indeed, with the popularity of adventure heroes e.g. Marvel franchise who knows how far this could go.
Thank you for this Robert.
Just having a look at Paypoint’s results from yesterday. I think it’s looking interesting again. Seeing as we have renewed inflation concerns, the market is looking for pricing power.
Warren Buffett’s famous cross the street test uses the example of brand name chocolate bars. Which is exactly what is sold through Paypoint’s terminals. Along with coca-cola, Kellogg, Heinz and all the rest.
Paul has made the point here previously about how well the grocers have been able to pass on price increases to customers and this is why.
Paypoint may not have a recognised brand itself but it’s able to access the pricing power of those that do.
Morning Paul,
Regarding Games Workshop, I think you've hit the nail on the head regarding the licensing revenues and general lack of visibility. It's one I've done a fair bit of work on over the years and argued the toss with various fellow investors who struggle to get their head around how they continue to grow at 10% or so annually.
Ultimately you have to trust in management's ability to continue to grow international and online revenues- I think they've earned it over the years and I like the straightforward accounting and communications.
As for valuation, I've always valued it on core revenue and regarded licensing royalties as a nice kicker. Ultimately I came to the shorthand approach of buying whenever the forward P/E dipped materially below 20x and sitting on my hands the rest of the time.
GAW,
For all those interested in this company, there is a very good ‘Twin Pete’s’ podcast from a couple of months ago with a guest called Matt? Can’t remember his second name but he is in the industry and really knew GAW really well. He talked about their business and also about the licensing. From memory, I would advise anyone interested in GAW to look this podcast up, because this guy really knew his stuff! I don’t hold but have been tempted, I only don’t hold because, (probably incorrectly) the valuation is quite high.
By the way, there is GAW shop in Woking, I think, and some of the ques and people I’ve seen in the shop at times was also a plus that made me consider holding.
Although I don’t hold them and don’t have any analysis of figures on GAW, I think if I was holding, I would continue to hold. Whether any of the above has helped, I don’t know, but good luck to all who hold this one.
BTW, the ‘Twin Pete’s’ podcasts are very good!
Graham.
Have been mulling over my (reduced) holding in CARD Card Factory, impacts of the headwinds (increases in NIC, business rates and min wage) and how much these are already in the price - halved in a couple of months)
I mystery-shopped their High Holborn branch yesterday - the interior was immaculate, with all shelves/walls covered in neatly, fully packed, colourful products.
I was concerned it was literally empty but was told they have a manic rush before work and then it resumes around 11.30am.
The manager Tracy explained each store has a different customer/sales profile - this being office driven with customers encouraged to add a couple of balloons to a large card to create low-cost team occasions.
While there had been challenging times during covid staff thought the company had managed this well and fairly and longer-term, committed employees like her had remained with the business when normality returned.
She was an excellent ambassador for the company, readily understood their challenges but also “where the business was” and other team members seemed to have a shared sense of purpose.
If all shops were run like this it would be reassuring.
Great work, The Jayman, I love mystery shop/dine reports!! It's only ever one store, so we shouldn't necessarily draw company-wide conclusions from whether a site seems busy or not, but it sounds like you've picked up on some good aspects of the company. I'm surprised CARD shares have fallen back so much, but I suppose the H1 results disappointed and leave a lot to achieve in H2, making some people worried about a possible H2 PW. I am tempted to buy a few at this price though, maybe just a small opening position, to be on the safe side.
I normally buy in bulk for family around this time of year from Card Factory online. If you look at their online store you can see they have a lot of new gifts and cards they didn’t have last year at noticeably higher price points and more “as in store” individual cards rather than the individual personalised or boxes of Christmas cards. I noticed a lot more Disney gifts/baubles too so some gifts could be at lot lower profit margins. I personally bought my new baby niece a roughly £16 festive fancy dress as an impulse add on this year. It’s not actually bad quality and I think my sister will be really happy for the insta photo op. I am however quite concerned that the nic increase will massively impact the bottom line and have actually adjusted my valuation of Card because of it but I also think the management are quite skilled at managing and have a degree of confidence that they will adjust to get closer to their targets. The management could perhaps rightly also be accused of being poorly skilled at communicating to the retail investors! What happened to this US wholesale deal?!
Nice work Jayman
CARD are interesting. The H1 results were badly received but actually they had been well flagged and were expected so it seems perhaps in the euphoria of the stock overhang clearance investors forgot what H1 would be and then just bailed. But perhaps an opportunity arises from that because I suspect the likelihood of an H2 warning is less probable than investors think. CARD have raised prices in some cases by c. 20% at the low end but are still excellent value so the profit bridge the FD put up at the results presentation showing how the full year is made up appears to make sense.
Of course the budget added a dampener but I reckon a 2-3% increase will cover NI and min wage increases. That doesn’t feel outrageous in context of their current pricing. Be interesting to see if they will pass this on, had already factored some in to expectations and/or will absorb some through cuts/efficiencies.
Anyway I like CARD because I think it is really well run. That doesn’t necessarily mean it will perform of course - sometimes macro conditions just deflate the balloon but at these levels and likely dividend yield seems like quite a lot of the risk is priced in to me. Fingers crossed!!!