Purple Group $PPE
Everyoneโsโ favorite overvalued share.
Letโs look behind the curtain.
(Educational Thread)๐๐ฝ
Everyoneโsโ favorite overvalued share.
Letโs look behind the curtain.
(Educational Thread)๐๐ฝ
โขIntroduction
Purple group is a financial service company.
Operates and runs:
-@GT_247
-@EmperorAsset
-@EasyEquities
Weโll look at their TTM earnings and point out some key things that may be of interest to investors. #DYOR
Purple group is a financial service company.
Operates and runs:
-@GT_247
-@EmperorAsset
-@EasyEquities
Weโll look at their TTM earnings and point out some key things that may be of interest to investors. #DYOR
โขRevenue
Total Revenue = R207 208 000
(207 million 208 thousand )
Total Revenue = R207 208 000
(207 million 208 thousand )
โขNet income
NI= R 21 861 000
(21 million 861 thousand)
Remember this is for the Trailing 12 month period. Data from Yahoo finance. โฌ๏ธ
finance.yahoo.com/quote/PPE.JO/bโฆ
NI= R 21 861 000
(21 million 861 thousand)
Remember this is for the Trailing 12 month period. Data from Yahoo finance. โฌ๏ธ
finance.yahoo.com/quote/PPE.JO/bโฆ
โขGross profit margin
Gross profit รท Total revenue
= R141 837 000 รท R207 208 000
= 68.45%
A measure of profitability. Telling us how well the company makes money from their products and services.
Gross profit รท Total revenue
= R141 837 000 รท R207 208 000
= 68.45%
A measure of profitability. Telling us how well the company makes money from their products and services.
โขNet profit margin
Net income รท Total Revenue
= R21 861 000 รท R207 208 000
= 10.55%
Purple Group is profitable, after all their costs are deducted.
But we need to determined valuation.
Net income รท Total Revenue
= R21 861 000 รท R207 208 000
= 10.55%
Purple Group is profitable, after all their costs are deducted.
But we need to determined valuation.
โขOperating Margin
Works out the profit on sales it makes, after paying for variable costs. i.e wages ect.
Does not include tax.
R50 519 000 รท R207 208 000
= 24.38%
Works out the profit on sales it makes, after paying for variable costs. i.e wages ect.
Does not include tax.
R50 519 000 รท R207 208 000
= 24.38%
โขShareholders equity
All assets - all liabilities
R625 463 000 - R 299 954 000
= R325 509 000 - ( minority interest)
= R297 974 000
( 298million)
Remember this,
goodwill is an asset too.
All assets - all liabilities
R625 463 000 - R 299 954 000
= R325 509 000 - ( minority interest)
= R297 974 000
( 298million)
Remember this,
goodwill is an asset too.
โขGoodwill
- Brand name
- Customer base
- Proprietary Tech
Itโs sort of an arbitrary price companies place on themselves.
-EE has about 1million users, so you are their asset, giving the brand value in essence.
P/Gโs Goodwill price tag =
R281 287 000
Yip, R281 million
- Brand name
- Customer base
- Proprietary Tech
Itโs sort of an arbitrary price companies place on themselves.
-EE has about 1million users, so you are their asset, giving the brand value in essence.
P/Gโs Goodwill price tag =
R281 287 000
Yip, R281 million
-Whyโs this important?
Well, these are intangible assets, you canโt really sell these assets to release cash flow.
Goodwill is reported in the assets section on a balance sheet.
P/Gโs shareholder equity is R298million
(R281mill is goodwill)
Donโt fear, all companies do this.
Well, these are intangible assets, you canโt really sell these assets to release cash flow.
Goodwill is reported in the assets section on a balance sheet.
P/Gโs shareholder equity is R298million
(R281mill is goodwill)
Donโt fear, all companies do this.
โขCurrent Ratio
Current assets รท Current liabilities
R256 164 000 รท R255 981 000
= 1.0007.
Purple group has just enough cash to cover short term liabilities. Not much liquidity.
In fact, only about R184 000 in working capital. Itโs improving, prior years were negative.
Current assets รท Current liabilities
R256 164 000 รท R255 981 000
= 1.0007.
Purple group has just enough cash to cover short term liabilities. Not much liquidity.
In fact, only about R184 000 in working capital. Itโs improving, prior years were negative.
โขEarnings Per Share
Net income รท outstanding shares
R21 861 000 รท 982 569 000
= 0.02
They are making 2c a share for us shareholders.
Net income รท outstanding shares
R21 861 000 รท 982 569 000
= 0.02
They are making 2c a share for us shareholders.
- Purple group has been increasing their shares year on year, and have increased their shares by 5% since 2017.
Yip, you guessed it. They are diluting shareholders to expand. Which is normal for a business like this.
Debt or dilution is needed, or a combination of both.
Yip, you guessed it. They are diluting shareholders to expand. Which is normal for a business like this.
Debt or dilution is needed, or a combination of both.
โขPrice Earnings Ratio
Share price รทEPS
(Worked with a share price of R1.56)
P/E = 78%
Theyโll need to grow into their earnings to justify current valuations. Growth stock. More risk = more reward.
Do you have conviction?
Share price รทEPS
(Worked with a share price of R1.56)
P/E = 78%
Theyโll need to grow into their earnings to justify current valuations. Growth stock. More risk = more reward.
Do you have conviction?
โขReturn on Equity
Net income รท shareholders equity (remember goodwill)
R21 861 000 รท R297 974 000
= 7.3%
Net income รท shareholders equity (remember goodwill)
R21 861 000 รท R297 974 000
= 7.3%
โขReturn on Assets
Net Income รท Total assets
R21 861 000 รท R 625 463 000
(remember goodwill, considered an asset)
= 3.49%
Net Income รท Total assets
R21 861 000 รท R 625 463 000
(remember goodwill, considered an asset)
= 3.49%
โขKey takeaways
- R184k in working capital
- Diluting shareholders by issuing more stock
- Total assets are โฌ๏ธ but so are total liabilities.
(Remember goodwill) more customers = more goodwill.
- Physical assets are worth only R16 687 000 (16mill)
- Goodwill = R281 million
- R184k in working capital
- Diluting shareholders by issuing more stock
- Total assets are โฌ๏ธ but so are total liabilities.
(Remember goodwill) more customers = more goodwill.
- Physical assets are worth only R16 687 000 (16mill)
- Goodwill = R281 million
Decisions, decisions, decisions,
Are you IN or are you OUT?
Comment below and let me know.
Are you IN or are you OUT?
Comment below and let me know.
โข YouTube
For the full breakdown, check out the video below โฌ๏ธ
Consider thanking me by hitting that subscribe button. ๐
For the full breakdown, check out the video below โฌ๏ธ
Consider thanking me by hitting that subscribe button. ๐
This right here is #DYOR โฌ๏ธ
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