Alpha Share Discussion Threads

[mrscruff] 19/12/2024 16:01

I had hoped to buy more this morning, but there was never a significant dip in ALPH. As of now U.S. financials are now the top performers, likely due to the neutral rate being around 3-4% going forward and possibly for a while longer at 4%. Much depends on Tarrifs but we have to also believe economic growth will get there in the end. Can't think of anything better to invest in.

[mrscruff] 18/12/2024 22:31

Christmas party next 🎄

[bigbigdave] 13/12/2024 09:20

Morgan's leaving bash tonight.

[mrscruff] 13/12/2024 07:20

And as soon as a day ago Millennium International Management Lp reduced this short. Looking at the technicals it seems algo driven helping to create volume and liquidity on the swings while they aim to profit. May help our buy backs as we do seem to buy more on the pull backs closer to 200-day.

[mrscruff] 12/12/2024 22:47

Short position increased 2-days ago. Looking cheap relative to the rest of the market for a growth company. Happy to add.

[mrscruff] 24/11/2024 12:57

@davidt345 Thanks for your feedback on the spreadsheet. When I model your growth prospects, it becomes evident that Alpha Group has a robust overall outlook. The projections indicate significant cash accumulation on the balance sheet, reflecting a low valuation. This suggests a strong potential for economic growth. Given this trajectory, 2026 could be a standout year for the company. Additionally, there may be interest in a takeover as early as next year in anticipation of this growth and continued strong balance sheet.

I do think investors then have to talk to the company about the tricky subject of what happens to the buyback shares held in treasury as so should be growing and *some* should be cancelled.

[mrscruff] 19/11/2024 14:19

RNS just announced that BlackRock's voting rights have increased to 5.11%, up from their previous 4.77%. Tipranks commented on the development, stating: 'This acquisition signals a strategic move by BlackRock, a prominent investment management corporation, enhancing its influence within the company.'

My opinion is that this is for a new position in BlackRock Throgmorton Trust, and we may start to see it appearing here in time: hxxps://www.blackrock.com/uk/literature/policies/throgmorton-portfolio-disclosure.pdf

[mrscruff] 11/11/2024 09:51

The share price is moving up nicely. The bond market is anticipating only another 25 basis points cut so base rates are projected to stay around 4% or above. To support deal activity, maintaining stable rates is crucial, provided they stay below 6%, where 6% and above businesses begin to face difficulties.

[davidt345] 03/11/2024 23:42

Hello MrScruff

Some interesting thoughts and spreadsheet, thanks.

My thoughts on the net treasury income:

The client cash balances have been growing over time as the business has grown, and I submit that the balances will grow at a faster rate as the UK and world economy picks up and interest rates fall.

I think a fall in the Bank of England base rate to 3% over the next 2 years. A fall in base rates from 5% to 3% is a 40% fall in the interest rate.

Assume/guesstimate a proportionate fall of 40% in Alpha's interest rate that it earns on client cash balances, so 3.8% falls to 2.3%.

If client cash balances grow 50% over the next 2 years, they will end up earning £2.2bn X 50% X 2.3% = £76m per year, just under your £78m of NTI earnings this year.

So I think this part of the business, although outside of management's control, was never going to go away. Indeed I believe within 2 years this will be growing strongly, all while the rest of the business should pick up strongly on the back of quite good global economic recovery. To put it simply, their earnings on NTI will not really shrink because falling rates will be accompanied by much larger client cash balances.

All those foundations Alpha put in place over the last 2/3 years in particular have not had chance to really motor yet. But the clues are there; while others have suffered, they have been very resilient and showed strong performance against the tide.

[shared24] 03/11/2024 13:36

Fair points. The inflation is not coming down quick enough and FED is going to take a cautious approach.That's a great idea - thanks for doing the sheet. I will check it out.

[mrscruff] 03/11/2024 11:55

lol, thanks shared24, sometimes I like to buck what's probable. I see little point getting to a target of neutral slowly unless the .25 cut will result in a neutral rate, which it won't due to cooling of the US labour market with inflation going down. The have nots are still suffering in America and the economy there needs boost for them rather than those wealthy who own assets and investments.

Anyway change of subject. I am creating a spread sheet with a link here so I can start to get a picture of EARNINGS with and without net treasury income and then get a P/E for both. Various tools online seem to get this wrong or different so I am attempting DIY for anyone interested and would like to check mine or there own analysis:


The link will be a work in progress between juggle the kids and work.

[shared24] 02/11/2024 11:14

It's not for 7th November cut according to current projections,Current FED rate is 4.75 to 5.00 and has a 1.1% probability..25 cut - 4.50 to 4.75 has a 98.9% probability..50 cut - 4.25 to 4.50 has a 0% probability.0.25 cut had a 95.1% probability a week ago.

[mrscruff] 02/11/2024 10:21

In the very short term, US job data is weakening, which suggests a substantial 50 basis point increase from the Fed is likely. With their dual mandate of protecting jobs and stabilising prices, they aim to reach a neutral stance swiftly. The market has already anticipated this move, as evidenced by trends in Treasury, Gilt, and Euro yields.

[shared24] 30/10/2024 18:51

The recent OBR Economic and Fiscal Outlook (released today) presents several key insights that bode well for Alpha's income from client funds. According to the OBR, inflation is projected to peak at 2.7% by mid-next year due to more persistent growth in nominal earnings, the inflationary impact of fiscal loosening, and increased employer costs from the NICs measure being passed on to prices. Additionally, the forecast notes that expectations for Bank Rate are about half a percentage point higher in the near term and a quarter percentage point higher in the medium term compared to the March forecast. This is attributed to higher market expectations and the unanticipated fiscal loosening introduced in the recent budget.Given these dynamics, Alpha International Group is well-positioned to benefit from interest rates/income on client funds. This favorable economic backdrop, combined with the strategic leadership of new CEO Clive, should provide ample opportunity for the company to accelerate its growth. In my view, these factors could pave the way for Alpha to reach FTSE 100 status in the future.

[mrscruff] 26/10/2024 14:55

In my previous post, I discussed seasonal trends and have generated data showing a potential uplift at ALPH following the budget, starting from November 1st. Here is a link to the data of seasonality for ALPH:

[mrscruff] 25/10/2024 22:28

Long-term global bond yields are still on the rise. Millennium International Management, which placed a short on October 10th (the day of the CEO Succession Plan Director change), has fractionally reduced their position from 0.5% to 0.48%. It’s puzzling how they expect to profit since they’ve bet on falling rates already. This was a consensus view; the new CEO was also already known by the market. They have no edge here. This is not how to make money. One needs to be 'divergent' from the consensus, then be proved correct while ensuring minimal losses on this view.

ALPH has declined recently, while financials have risen, making a long investment here the "divergent" bet, and that bet is increasingly looking true. These shifts are changing all the time with great volatility, so it is important to be vigilant.

Looking at historic trends for ALPH long investors often see a strong rise from the 1st of November that runs into the new year. Funnily enough the UK's 2024 autumn budget will be on Wednesday October 30. History may not repeat but often rhymes.

Edit: New article I missed: hxxps://businesscloud.co.uk/news/listed-fintech-ceo-leaving-podium-right-decision-for-company/

[mrscruff] 23/10/2024 07:44

Who needs charts when we have:

📈 A 10Y stabilising at 4 percent
🤝 Increasing deal flow
🏆 A world cup winner

Worth looking at the recent performance of WISE where more PI's are taking advantage of the macro environment. We may see European bond yields deviate from the US who may do much fewer cuts. This will be interesting dynamic.

[bigbigdave] 22/10/2024 08:48

Ex England Rugby Union international and World Cup winner Iain Balshaw works for ALPH.

Dave's interesting fact of the day :o)

[gswredland] 22/10/2024 08:19

Was thinking of buying in but it just keeps falling and chart looks dire

[mrscruff] 21/10/2024 14:22

Bond yields creeping up. Expectations of fewer rate cuts. This is bullish for Alpha and as I am not too bias I do still own some bonds and bond proxies.

[kaffee] 21/10/2024 14:14

If you own bonds already, and yield is creeping up... that means price is going down along with the value to you though doesn't it?

[mrscruff] 21/10/2024 14:04

Absolutely, I'm losing some of my gains on bonds and bond proxies today and Friday. I've been selling those on the way down, but I like to hedge my conviction by keeping some back, as nobody can be right all the time, and there are bumps on the way to a neutral rate. A balanced portfolio with overweights in conviction is key. We all understand that only 49% of people can be right after fees. Note that WISE has been ticking up, and I hope to add to ALPH as soon as my next pension contributions come into my SIPP.

[mrscruff] 15/10/2024 13:16

First proper investor type article on ALPH, but as a contrarian I like to build a position in a company before these article come out. Read it here:

hXXps://seekingalpha.com/article/4726624-alpha-group-international-plc-disrupting-the-financial-services-industry


The article was written by Oyat Advisors who obviously have had their fill going long and as always remain sceptical about these articles motives.

[shared24] 14/10/2024 19:21

I agree that the risk exists, but I don't share the view on the impact mentioned. Alpha has a Chief Risk Officer, who, along with his team, is tasked with identifying and mitigating risks. The Chief Risk Officer's compensation which is nearly the same as CFO's shows Alpha's commitment to risk management.The latest annual report shows Alpha has over 100 risks in their registry, with 9 key risks and mitigations listed - there is no mention of banks pulling out, suggesting they have this under control. Additionally, the strong board, including new CEO Clive, provide further confidence in their ability to navigate such risks.

[onthelash] 12/10/2024 17:48

The issue for any broker who had a liquidity provider pull out would be that with a more concentrated panel of liquidity providers the company’s lines of credit would change and they would either need to reduce their credit appetite which would lose them competitive, usually high value deals or they would have to take bigger risks when extending lines of credit. This risk is present amongst all brokers although is more material to a broker who focuses on selling products that require them to extend credit lines like Alpha. This is of course in isolation and there would probably be wider ramifications if any broker were to have a Tier 1 bank essentially refuse to work with them. Alpha is still a great business and this is a very unlikely scenario, but this industry is really quite new and is evolving constantly. Alpha is a good example of one stage of the industry’s evolution that they pioneered and the competition haven’t really caught up to them yet.

The FX brokerage industry came about because banks weren’t providing the same level of service and price to SMEs as they were their FTSE 250 clients. All it would take is for the BOD of a bank to see an FX brokerage come on their radar and think ‘why are we letting this company steal our customers and make a fortune selling them our products at a markup? Why don’t we just spin up a proper corporate FX desk ourselves and take this business for ourselves?’.

Having said that my opinion of Alpha in relation to every other FX brokerage is that they are the best managed, best staffed and by far the most agile and innovative.