Alpha Share Discussion Threads

[datait2] 14/8/2023 10:21

I see alpha has a lot of staff, maybe 4 to 1 in ratio to clients to staff, which allows the staff to really look after and make the best financial choices for clients. Alpha says they also use advanced software to make decisions, my question is couldnt more AI involvement reduce the number of staff, hence increase earnings for the company.
another question is, in the last earnings update, alpha said there is a reducing demand for hedging due to interest rates now topping out.
as in the last 18 months companies have been hedging a lot due to the numerous interest rates in the UK, which allowed alpha to be materially ahead in forecasts.

[datait2] 14/8/2023 10:16

do you notice how much smaller cap stocks than alpha has hundreds , maybe even thousands of trades a day, but we get about 40? why is that, are we too illiquid, despite being around £1 billion cap, you would think being £1 bill in cap, we would see hundreds of trades a day.

[datait2] 14/8/2023 10:13

yes, i have looked at long term fundamentals, although growth may be slowing down to say a constant 20%, earnings will be rising, the question is, do institutes prefer long term revenue growth, meaning the product is in demand, or do they prefer a spike in earnings via higher interest rates.
I look at US stocks a lot, and the business plans over there is to forgo all earnings and profits ( plus no tax is needed to pay out) until a company is huge, and grown significantly.
Look at the software stocks in $10-30 billion cap, most arent profitable, but are growing revs 50% a year. that is why their market caps are huge.
what do you think?

[sailorsam1] 13/8/2023 17:50

Totally agree. You cant just leave out the interest receipt

[ihatemms] 13/8/2023 14:43

The share price of this company is going to look pretty silly soon because regardless of how this company wants to be measured on EPS the statutory EPS must include interest income. So the statutory EPS this year will be £2 + and next year £3+. The share price anomaly will then stick out like a sore thumb to everyone. Patience is the key here . 1st flag will show when the interim accounts are produced in circa 3 weeks when the statutory EPS for the interims is £1+. Add in the expected update of the main market listing and we could have significant share price movement

[datait2] 04/8/2023 11:41

but alpha isnt a bank! and it has no banking model risk, it only holds the capital overnight, collecting interest, it does not lend out that money in loans, the way large, old banks do.
if interest rates are holding steady and high, do you think the FX market will be affected, i mean will businesses realise, that and not hedge as much, what do you think
what about the US losing its AAA credit status, is that a good or bad thing for alpha?

[datait2] 04/8/2023 11:36

never liked alpha given out any dividends, its a small cap growth stock, all earnings should be put back into the business, growing it, making full use on ROI.
alpha did state in the last earning report in May, that this money from interest would be used on say marketing their new products or opening new offices.
it is weird how the americans frown upon stocks giving out divs when they are in growth mode,
but uk investors love them.
the amount of cash alpha has an will have in the future must be exploited into every expansion opportunity imo.
berkshire hathaway has never gave out a dividend, neither has tesla, google etc.
maybe large old banks in the usa do, but they have stopped growing.

Just waiting for the market to reprice alpha upwards. the institutes must realise the huge freecash flow alpha is creating. I think us retail investors have already figured that out.

[shanksaj] 04/8/2023 10:48

A special dividend would be nice.

[datait2] 27/7/2023 09:01

the forecasts is to show a net margin of nearly 70%, that is NET, not gross, due to the amount of cash alpha will be earning, even tho underlying net will be around 38% net.
Interest rates will remain around 3.5% at the lowest for long time to come, we wont be going back to 0.5% unless we have a worldwide banking financial collapse.

[datait2] 27/7/2023 08:55

they wont be bought out, the ceo says his plans are for years for the company. that is why they are advancing new tech in their business and getting into new industries,
I had a look on a few screener sites, we now have 2 broker forecasts with a high of £29.00 and an aver of £27 17 target, it also shows net cash position 2024 of a quarter of a £billion and 2025 over a third of a £billion.
rev growth forecast 20%, but EPS will almost triple, due to the ever increasing cash alpha will make.

[daveme] 26/7/2023 09:07

I'm not sure what more ALPH can do. The update was excellent and yet no change in the share price. We can only wait for the market to eventually wake up or for someone to buy them out. Either way the downside risk is small whereas the upside is big.

[wjccghcc] 25/7/2023 18:45

It looks like the underling business environment is tough but they're trading in line. That's more than compensated for by increased interest income. Liberum upgraded reported EPS by 28% to 189.3p putting them on a PE of 11.5. However, they and the market are viewing that as transitory so not much market reaction. Having said that, earning an extra 69mm for a few years adds to the cash pile so the market is somewhat wrong IMHO.

[datait2] 25/7/2023 09:00

lots of buys and sell going trough this morning, with the update, it seemed very good to me, your thoughts please.

[ihatemms] 24/7/2023 14:03

Suprised we haven’t had the usual July TU by now - we get one every year. Hopefully get one this week.

[datait2] 19/7/2023 19:33

interest rates are to reach 6% this year and then eventually, drop to 3.5% for the long term maybe 5 years min

[sailorsam1] 18/7/2023 09:28

It is still a material income increase and therefore surely should be rns?

[philly cheesesteak] 17/7/2023 14:46

Last October they said the below;

"Whilst this is a positive boost for the Group and a natural by-product of our accounts solution, we are mindful that it is an uncontrollable income stream for the business and, if we return to a low interest rate environment, a potentially transitory one."

9 months on, how likely does a return to a low interest rate environment look?! Even 2% rates would deliver a significant income stream here (£32m based on Q1 figures).

Challenges with how to recognise excess income is an unusual problem for a company to have, almost unheard of for an AIM listing.

[wjccghcc] 16/7/2023 18:24

I'm not sure if they view it as price sensitive as they don't include interest income in EPS forecasts as they view it as non sustainable. I guess we'll see.

[ihatemms] 16/7/2023 16:48

Since that price sensitive information was released after market hours on Friday I believe there must be a TU first thing tomorrow morning (there normally is one every year at this time of year )before the market opens. If that blended interest information is anything to go by it should send the share price VERTICAL. I will try and grab some more stock if I can.

[ihatemms] 14/7/2023 23:15

Just seen the Q2 blended interest income information on the company web-site under governance.Interest income alone this year likely to be circa £75-£80m ( broker forecast £43m). Already £29m in H1 alone .Wowsers!!! Forecasts are going to be absolutely smashed!!!!

[datait2] 26/5/2023 14:20

An interesting fact, alpha has a free cash flow conversion of around 91%, freecash flow is the real meat and potatoes of a business-- not its revenue or its profits-- what cash it makes!!

this is real cash it makes from its total profits ,
BUT in 2023 it is forecast to go to 165%, how is this possible, well a google search explains this--

Ratio > 1: This means you have excess liquidity, either due to clients prepaying invoices or a lack of expenses. It means you have cash that could be used for investment and growth.

[datait2] 26/5/2023 13:56

Do you want a fast fun video to watch that keeps you motivated into not selling, then watch this, this guy makes great investing guides in an easy form, and i also am obsessive in finding 100 bagger stocks.--

[datait2] 26/5/2023 13:40

I use a stock screener and here is what it says about alphas strengths----------

Growth is a substantial asset for the company, as anticipated by dedicated analysts.

Within the next three years, growth is estimated to reach -99% by 2025.

The company's EBITDA/Sales ratio is relatively high and results in high margins before depreciation, amortization and taxes.

Thanks to a sound financial situation, the firm has significant leeway for investment.

Over the last twelve months, the sales forecast has been frequently revised upwards.

Over the last 4 months, analysts have significantly revised upwards the company's estimated sales.

Analysts have a positive opinion on this stock. Average consensus recommends overweighting or purchasing the stock.

Analysts' price targets are all relatively close, reflecting good visibility on the company's valuation.

[datait2] 22/5/2023 10:12

remember, this is a stock mostly held by insiders and institutions, so it's their buys or sells that move this stock, not what retail do, perhaps that's why its such a quiet forum.
If any of you guys are registered with LSE , perhaps make some fresh new posts and news. I don't like LSE, but its more popular than ADVFN.

I mean ADVFN even get our market cap, EPS, turnover and profit totally wrong at the top of this page and list us under real estate investment !

[datait2] 22/5/2023 09:14

Alpha got a good write up in the Motley fool on Friday, we usually get a little bounce after these articles for a day or two.



Motley fool state a forward P/E ratio of 30,( which I think is wrong, based on alphas high growth rate) the current ratio is 24, compared to some US stocks, this is low.

PS, remember our free float is only 69% so expect choppy swings up and down on relatively low volume. So watch any stop losses cos the market makers can take you out on low volume trades, as I've seen the spread vary from 0.6% to 4%, and if the 4% is showing it could potentially take you out if a sudden one off sell trade comes in.

PPS the motley fool forgot to mention alpha's new fund finance business