Alpha Share Discussion Threads

[mrscruff] 12/10/2024 09:01

News came in Friday that US inflation reaches lowest point in 3 years sending Russell 2000 and Financial sector up. No down move in those bond yields or gold. Some nice charts herehxxps://apnews.com/article/inflation-prices-interest-rates-economy-federal-reserve-cd6d9712bfd484d6e1bc4ccb958dcf23 Looking forward to Monday as I have had my fill.

[shared24] 10/10/2024 16:34

I think it's due to FTSE250 as the decrease in ALPH share price EOD is similar to what it was prior to RNS.

[mrscruff] 10/10/2024 16:00

And this is reflected in the FTSE 250's inverse move, which drives ALPH down with it. This helps investors in accumulation know when to buy. Since I hold the index, I can rotate when large caps go up (they seem to like high rates).

The fall could also be due to Canaccord Genuity's recent mention in the RNS, bringing it down to 4.9%.

With the next full-year earnings report is in March 2024. Do we know if ALPH will start doing quarterly reports?

[shared24] 09/10/2024 21:03

Swap rates have risen significantly. Since Friday, the 2-year swap rate has increased by 25 basis points, climbing from 3.86% to 4.11% this week.While rising swap rates are generally driven by market conditions and expectations about interest rates and inflation, they don't directly impact the neutral rate in the short term. However, if swap rates continue to rise over the longer term due to persistent changes in economic fundamentals, they could influence the central bank's perception of the neutral rate.Why Have Swap Rates Increased?Several factors are driving the increase in swap rates:US Economic Concerns: Fears of a U.S. recession have diminished due to strong jobs data. As a result, markets now expect future U.S. rate cuts to be smaller (0.25% rather than 0.50%).Middle East Conflict: Ongoing geopolitical tensions could affect oil markets, which may drive up inflation, leading to higher interest rates and swap rates.UK Fiscal Outlook: The UK government is facing a £20 billion shortfall, raising concerns about potential tax increases and additional borrowing. Fears of increasing government debt are pushing gilt yields higher, which in turn is contributing to rising swap rates.

[mrscruff] 09/10/2024 07:24

Hi Onthelash,

Has Shared24 response regarding multiple liquidity providers alleviated some or all concerns? As a collective, we can put this issue to rest as it seemed like a solid response, I'm not deeply familiar with the intricacies of the business, but I did follow.

[shared24] 07/10/2024 21:42

While the risk you mention exists, it's clear that it has been mitigated by Alpha's use of multiple liquidity providers. It doesn't make sense for all banks or providers to cut off these relationships, especially since they're profiting from the arrangement and haven't been able to replicate Alpha's business model themselves. Instead of closing doors on Alpha, it seems far more likely that a bank or a financial entity would consider acquiring a company like Alpha to benefit from what they've built, rather than disrupt it.

[onthelash] 07/10/2024 19:56

Glad you found it interesting. Yes, Alpha likely have a panel of liquidity providers which will mitigate this risk (and also spread their counterparty risk in general), but I think this risk is still quite significant. Brokers are still beholden to their banking liquidity providers. For example, an FX broker couldn’t work with an adult site like Mindgeek, only because their banking partners don’t want that business. When it’s boiled down, a corporation trading complex FX hedging derivatives really have no way of knowing how much they’re being charged by their broker. The actual rate they get is even more obfuscated when a broker blends a mix of derivatives together into a bespoke strategy which good brokers like Alpha likely look to do. All it would take is a shift in the regulatory environment or even just a shift in regulatory interpretation for this business to be deemed completely undesirable for banks.

I was being a little facetious when I said banks keep the industry going out of the kindness of their hearts, I think they keep it going as they are still making some money from making markets for the trades brokers bring them to execute, but if they fall on hard times for whatever reason and see companies like Alpha making a lot of money on business that they’re ultimately winning away from the banks that provide them liquidity, it would be easy for them to pull the plug and take the business themselves.

[shared24] 07/10/2024 18:28

It was an interesting read - thanks for sharing.You say you are bearish on FX corporate as a whole due to the fact that a bank can pull out at any time. I would think that companies including ALPH would have considered this risk and have appropriate mitigations in place.Is it not an option to go to a different bank if one bank/Barclays pulls out?

[shared24] 06/10/2024 12:01

Yes, it needs to be balanced. Given the inflationary pressures and job market condition, both FED and BoE will take a cautious and measured approach to rate cutting.This should give us a favourable neutral rate for ALPH.

[mrscruff] 06/10/2024 09:00

Small US businesses are still really suffering from high rates and these cuts should support those. Many do believe that recent job growth is overstated. The way I see it is those higher earners are earning good interest income (inflationary) so there is an equilibrium to have. I added to ISA. this comes previously having my fill in the SIPP in Q1.

[shared24] 05/10/2024 18:36

Yep, very strong numbers for US jobs. There was 53% probability for 0.5% rate cut in Nov 2024. Following the job numbers yesterday, 0.25% rate cut has a 97% probability.Added more in my SIPP.

[mrscruff] 04/10/2024 12:44

Extremely strong US jobs report to the upside just now. Casting shadows on deep rate cuts and rising the 10 year. This puts ALPH in that Goldilox position.

@Shared243 - Thank you I am learning lots about Clive from those links. I like the comment on investing into favourable macros... I know he has got that one right! The chance of rates going back to zero is small and even smaller today.

[shared24] 03/10/2024 21:06

Very good points MrScruff. There will always be doubters.As much as it pains me to see Morgan go, we have a great leader and industry veteran in Clive.I would suggest any interested shareholders or anyone thinking of investing in ALPH reading/listening this podcast of Clive's Interview (recorded Dec 21) - very interesting details.https://www.cazenovecapital.com/en-gb/uk/wealth-management/insights/podcast-encounters-with-success-clive-kahn/I would also suggest taking a look at Clive's current company that he has recently sold. He has made a great business that all his customers love - all trustpilot reviews attest for this.https://www.takepayments.com/company/

[mrscruff] 03/10/2024 16:25

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 10:31

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 10:02

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 07:01

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 17:57

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 12:12

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 06:08

Director buy, £550,000 worth

[shared24] 30/9/2024 11:21

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 10:52

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

[mrscruff] 28/9/2024 10:29

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 09:43

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