Seeing as peeps are asking what UK shitcos I own to monetize this trend, here's one I'll throw out there: $CARD.LN. It's been written up in the public domain - see this excellent blog post: dkvalue.blogspot.com/2021/02/card-f…
basically the point is its at ~4.5x pre-COVID EPS...
...w/ a ton of leverage, I know. but 80% of weddings got cancelled in the UK last yr; 70% of card purchases are discretionary around events; and two of their biggest comp went bust during COVID and closed a bunch of their stores...
...so basically you have a hyper-levered play on eventing/gifting, trading at a v low multiple of (probably) too-low earnings over the next 1-2yrs. At 10-12x P/E and some earnings improvement the stock is near-triple. Even at 10x P/E and just pre-COVID erns its a near double...
and since its a div stock (UK retail!) and paid out ~90% historically if it simply regains pre-COVID earnings/FCF (which was declining but basically a 💰machine for many yrs) its on a ~20%+ yield on current...and of course I think earnings will be BETTER than pre-COVID...
...remember also that its a levered shitco w/ perceived solvency risk (which I obvi disagree with). So as vaccination progresses, stores reopen, ppl realize its just a levered reopening play w/out B/K risk, it should regain 100p...BEFORE the (hoped-for) earnings inflection
Obviously, dilution risk is real here near-term (which i still think is taken positively as removed B/K totally from the table). But this is the kind of thing I'm talking about in UK stocks.
Always DYODD, and clearly, I am long (and could well be wrong). GLTA! 🙏🙏
• • •
Missing some Tweet in this thread? You can try to
force a refresh
The $DKNG analyst day slides were quite something. I have no idea how anyone can own the stock at a ~$32bn EV and expect anything other than a HORRID risk/reward the next 5+ years...the math is pretty simple. let's take a peak 👀
THREAD
They disclosed their LT EBITDA 'guidance' as $1.7bn - based upon a fairly rosy set of assumptions but basically 65% penetration of OSB, 30% pen of iGaming, then just rolling forward another 5yrs 🤣. Ie this EBITDA number, even if actualized, is prob a 7-10yr aspiration:
So today we get to pay ~25x 7-10yr forward maybe adjusted EBITDA. Nice 🤪🤪
It gets worse. How do they actually get to this number? Well they try to size the market at maturity, using UK, Aus, and the more mature NJ market...
Here’s everything you need to know the $AER deal for GECAS sucked bigly in one thread.
1) This is NOT ILFC. When AER bot ILFC in 2013 they went up to 5x levto buy an asset at a lower multiple of book, at much lower absolute valuations on the fleet, w a much better order book...
...they also had an equity currncy trading well above book to pay for it. Basically diametrically opposed to today’s deal (higher book multiple; worse order book; less leverage; own currency trading at a discount)
2) fleet mix: AER took a predominantly narrow body, newer, mostly new tech fleet and diluted it w widebodies, older lanes, and current tech (oh and helis and freighters!) Exactly the things Aengus railed against, for years.
OK normally I would write this up for my subs but since @IBKR won't let me trade Oslo Growth listed stocks, I present Rana Gruber, $RANA.OL, to my Twitter peeps
THREAD
$RANA.OL is a small iron-ore miner in Norway. It just listed a week ago at 49.5 NOK. Price now is 68 NOK. There are 37.4mm shs out = 2.5bn NOK mkt cap, and 190mm NOK bank debt at yr end (which will be near zero imminently).
So all in EV is say 2.7bn today...
Last yr they produced 5.1mt of ore, and generated 681mm of EBITDA at 51% margins. Ie its on ~3.8x EV/EBITDA LTM...but given where the iron ore curve is (or was), its on more like 2.4x EV/EBITDA this year:
@hkuppy and I have been having a spirited disagreement about $ACND and the deal to buy Beacon. Kuppy thinks this is a 'mind-numbingly great' biz. I am FAR more skeptical. You know what that means...it's time for a THREAD
Issue 1) why are the incremental margins so low? Kuppy says this is an asset-lite 'better than SaaS' biz. Here is the rev/EBITDA progression last three years. Tell me when you find the op leverage.
I'll wait.
42% incrementals...true SaaS/platform incrementals are 80%+...
The fact this is happening despite aggressive growth in ARPU is further puzzling (normally ARPU growth is higher margin, all else equal).
Obviously, marketing expense is roofing it...this is basically the opposite of a typical SaaS biz...
So Draftkings is coming public via a SPAC - the deal values the combined DK + SBTech (gaming tech software provider) at ~4x FY20E revs...
Couple of interesting takeaways for shareholders...
1/
1) SBTech is being valued at ~4.7x FY20E revs and 4.4x FY21E revs for <30% growth next yr and 7% growth in 21E...with likely aggressive growth assumptions. trades - on my numbers - at 2.6x FY21E EV/revs (w/ no credit for other states beyond NJ, PA)
2/
2) Deck makes it clear economics for software/platform providers at scale are very juicy - they allocate 12% of gross revs for 'platform' costs and 5% for 'revenue share', either or both of these numbers could be considered 's potential take rate for sports betting: