Alpha Share Discussion Threads

[mrscruff] 03/10/2024 17:25

It just occurred to me that llama_investor posted his negative outlook on ALPH a day after Millennium International Management LP opened a 0.50% short position in ALPH on Morgan leaving. If he followed their lead, he likely lost money betting the stock would decline. I hope he recovers his losses or held on, as he might break even today if he didn’t use leverage. It takes two to make a market, and unfortunately, he got his bet wrong. Most short sellers don’t make money, so it’s important to primarily invest in an index and have small, long positions as satellites.

We have no concerns regarding Millennium and there 5,800+ employees still holding that losing short. I am sure they hire anyone to fill those jobs. On a positive note, JPMorgan has been increasing its allocation to ALPH. Although they sold some shares earlier this year, ALPH was a top holding at the start of the year, and JPMorgan has been buying back shares recently. They are well positioned to best forecast the neutral rate and can analyse companies better than us, but are slower to react than PI who can sell and buy faster.

[mrscruff] 03/10/2024 11:31

CKN have had multi-bagging that seems to keep growing and thats the case study to look at when looking at ALPH and its geographical approach. Most FTSE250 companies, I believe simply run out of runway and addressable market vs the Russell.

Speculatively the safety of the human in ALPHA may come to its own in 5 years time with the risks around Quantum computing where China are possibly world leaders behind closed doors able to hack anything.

[shared24] 03/10/2024 11:02

That makes sense, thanks MrScruff. Hopefully the trend is back once the sentiment against the company changes.Unfortunately ALPH has not multi-bagged yet but this will be good entry point for all new shareholders. It's only done 10% in the last 3 years and is in a great place for growth.CKN looks interesting. ALPH has so much going for it when you compare and look at their growth story in the past and what it can offer going forwards.M&A would be very good considering ALPH only ever bought 1 company in its history. The new CEO might change that and there might be more.AI in another interesting area as well.Hope Morgan and Clive can pull something together in the above areas in the next 3 months. It shows commitment that Morgan has not sold any shares and Clive keeps adding.

[mrscruff] 03/10/2024 08:01

shared24, unfortunately I am only knowledgeable from a top down markets and macro. I rely on RNS for any bottom up news. The reason ALPH looks to track the US market is because the US market contains the highest quality companies and high quality companies move as one. The FTSE 250 is an index full of companies who fail to grow after they multi-bag due to reasons beyond me (I can only speculate as to why) but this is what the data shows (e.g. Games workshop, fever tree etc...). What makes ALPH special is the diversification across geographies and I feel it is still early in its cycle.... I rely on others here saying ALPH is not going to expand into the US. Another stock I look at is CKN a shipping consultancy with global clients.

If I had to speculate for fun... I would say another M&A is possible given how much cash and shares they own. Or perhaps they will use AI to replace LitleLitleDave? Seriously, I only invest based on the RNS's and the macro and with US economy so strong-resulting in shallower cuts will supercharge the great work they do.

[shared24] 02/10/2024 18:57

Thanks MrScruff for the explanation.The share price has been on a downward trend for a few days now. This used to follow Nasdaq/S&P and that does not seem to be the case anymore since the CEO change announcement.Do you see any catalyst events before the next trading update in Jan 25 that might help?

[mrscruff] 02/10/2024 13:12

It does not matter if an large trade is a BUY or SELL as the share price has to be at an agreeable price between both the seller and the buyer. We do not know if it is a buyer who wants more stock, or a seller who wants less stock. Given the direction of the share price being side ways there is equal amounts of sellers to buyers. Noting also that lots of the daily volatility is also down to the FTSE250 index traders and any sentiment is at index level and not ALPH.

I know we do not operate in the US but any institutional "sentiment" will be around the US labour market today that influence the neutral rates globally (being the reserve currency). I would hope for good employment numbers.

[bigbigdave] 02/10/2024 07:08

Director buy, £550,000 worth

[shared24] 30/9/2024 12:21

Hi,Is the £8M traded a BUY or a SELL order?I was hoping the above would improve the sentiment. It continues the same path as Friday. Today's decline is possibly due to lower GDP figures for UK that came out this morning.

[sharpedge7] 28/9/2024 11:52

Interesting. That’s quite a chunk.
I added a few more last week.

[mrscruff] 28/9/2024 11:29

Approximately £8 million was traded after hours on Friday at 2300p. I added to my position during the dip for the last time and I’m quite pleased with that. We are expecting significant rate cuts, but remember, it’s the new neutral rate that truly matters. I believe this hasn’t been fully reflected in ALPH’s share price.

[nfs] 26/9/2024 10:43

Little John in Robin Hood was of course huge, an ironic name

[bigbigdave] 26/9/2024 07:38

He is taller than me!

[mrscruff] 25/9/2024 22:14

Congratulations to LittleLittleDave!

Seeing more and more calls for the neutral rate at an average of 3 percent with a range from 2 percent to 4 percent. US job numbers may create volilty of 20 year yields, best ignored. Added some more ALPH today.

[bigbigdave] 16/9/2024 09:50

Son started work at ALPH last month, long hours but absolutely loving it!

[mrscruff] 14/9/2024 22:27

For clarity, if a new neutral rate were established this year, resulting in ALPH’s profit from interest being halved (lower than most experts expect the R rate to be), the P/E ratio would be 16.8. If ALPH made no income from cash balances, the P/E ratio would be approximately 22.5. This is still good for a growth business but overly conservative by removing all interest. Currently, the P/E ratio is 11.4 with interest, which is very low and highly profitable.

[mrscruff] 12/9/2024 19:29

The 3:30pm RNS's are catching me out. Another today... Clive buys £529,250 worth of ALPH stock + £26,462 in stamp duty obviously. Love the reply by "sailorsam" btw, very funny.

[sailorsam1] 12/9/2024 11:54

Back she goes :-))

[mrscruff] 12/9/2024 07:57

@llama_investor Yes, investors in ALPH have been aware of the rate-cutting cycle for some time. However, both the future neutral rate and strong operational growth are the key factors here. This is why it’s crucial to separate these revenue streams, as ALPH already does. You can see that the operating profit remains robust and growing during challenging times of low M&A etc... this should accelerate as the environment changes for the better. We will know this when small cap index's goes up.

Regarding the macroeconomic context, yesterdays recent CPI data from the US suggests a “higher for longer” scenario, indicating a soft landing. ALPH’s operating profit is strong and not dependent on interest rates.

While a deep recession would be detrimental to both these factors, current indicators are very positive.

[llama_investor] 12/9/2024 00:20

Greatest CEO-driven company on AIM. Until the said CEO janked a load of shares.

Then left completely.

Astute guy no doubt, but he's envisaged the future and is getting out while the going is good.

Token "buys", and "will hold" arbitrarily for arbitrary length of time - soothing gestures to the market.

This and similar FX companies EQLS AGFX et al, entire sector falling rates of growth, kept afloat by high interest rates on cash balances.

Falling interest rates, that is.

This ship is going down.

[mrscruff] 11/9/2024 21:37

Wonderful - I completely missed this RNS! Thank you for posting.

[maddox] 11/9/2024 16:39

Morgan Tillbrook, Chief Executive Officer, has purchased 24,321 ordinary shares in ALPH at 2000p ~£486k a healthy slug, that suggests:

>> He thinks the shares are cheap;

>> Signals confidence in ALPH's future;

>> Puts a higher baseline in for what he'll accept to reduce his stake; and

>> He's unlikely to indulge in a disorderly exit sale.

[mysteronz] 11/9/2024 16:12

And now Morgan joins the crew, should allay fears of him jettisoning his stock to 10%.

Lovely touch to show confidence (with money) in his choice for CEO

[mrscruff] 10/9/2024 19:16

When we are saying P/E 10 that will includes all the non-operating profits that will eventually make up a decline in interest from clients cash balances if we do not grow the operational profit. Operating P/E alone is obviously higher, I am not sure what it is 15-20? If client growth persist and neutral rate is 3.5 percent this will do very well.

[sailorsam1] 10/9/2024 19:04

New CEO spends £1m is a pretty confident move and he has a great background. I suspect sense will prevail and the shares will rebound quickly. A quick growing company with a P/e of less than 10