Argentex Share Discussion Threads

[yump] 30/10/2023 14:07

Shstt1

Fortunately I have plenty of other stock msrket investments - its just these sme’s that look like they’re going to grow but don’t do it very well, if at all, that’s the problem.

I can forgive problems based on interest rate changes, macro stuff etc, but not poor management and diversification when it shouldn’t be needed if the original business has a big market to go for.

[maddox] 30/10/2023 10:49

Hiya Ali - we seem to be crossing paths frequently.

[big7ime] 30/10/2023 09:52

The cynic in me would think the remaining directors want their options at a cheap price.

[shstt1] 30/10/2023 09:49

Yeah hope you do better than your venture into shares. Some need to go back to the classroom and learn the basics again, I.E. sell high and buy low. But the founder leaving can’t be a good sign so you pay ya money…

[yump] 30/10/2023 08:40

I thought the growth strategy started several years ago when they first expanded and moved head office to bigger premises and costs went up, earnings dropped and the share price did as well.

Part of the reason I’ve got out is because its still going on and seems to be going to rest of world before seeing the results from the initial expansion.

Mainly freaked by the departure of all founders though and the concentration on revenue (ego?).

Appears to be cheap though but I’ve gone very risk averse and need money for private investment that at least I’ll have control over !

[chinahere] 29/10/2023 20:03

'IF' we believe in this company then we should welcome Harry's share overhang reducing the share price. It will be a cheaper buy.

[ali47fish] 29/10/2023 19:34

maddox nice to see you here- ali

[maddox] 29/10/2023 18:18

Hi Smithie6,

The Top 20 clients - changes, that is - it's not as concentrated as that might suggest because it's not the same clients making up the top 20. Whether you think 40% of turnover in a period coming from just twenty clients is concentrated or diverse in any case - it's growing.

Also, the customer base is primarily business customers - not traders. Their requirements for fx may be occasional dependent upon their business needs. So, they are not catering to currency traders.

IMHO the immediate primary concern is the potential share overhang - Harry Adam's departure appears not to have been amicable. Hopefully the Broker can persuade him towards an organised sale or to hold-on until conditions are more conducive to achieving a higher price - if indeed he wishes to exit. It would clearly be useful to have some clarity on this in the market.

Underlying his departure appears to be a disagreement on strategy - so some clarity on what the new strategy is will certainly help investor sentiment.

[red ninja] 29/10/2023 17:36

Smithie629 Oct '23 - 14:57 - 1265 of 1266

So....as a tip from Inv store's champion

At 70-80p this tip has been a bad/losing tip ??

-----

I see no mention in the write up from them about the risk that comes from ~40% of turnover coming from the top 20 clients.

>>>

It may have been for some as it has been above that level.

In the full article they do mention the reliance on a few key clients.

It's fair to say they get some right and get some wrong like most investors.

Time will tell if the current entry point is a good opportunity or not.

[dr biotech] 29/10/2023 17:28

Customers didn't necessarily leave, they just didn't trade. Some may have left, but more joined.

The investors champion tip is from two days ago. Don't you think its a bit early to tell if its any good or not?

[smithie6] 29/10/2023 15:06

From Post 1250

"Btw
~200 clients left during the period, out of ~1400

Scary high % imo.

~300 new ones arrived."

....not mentioned I think in the write up by Inv Champion & probably also not mentioned by that Cheshire cat grinner Paul Hill in his interviews of exec. dirs.

But
imo it is a very real negative to include when trying to value the shares.

[smithie6] 29/10/2023 14:57

So....as a tip from Inv store's champion

At 70-80p this tip has been a bad/losing tip ??

-----

I see no mention in the write up from them about the risk that comes from ~40% of turnover coming from the top 20 clients.

----

Is almost all of the turnover of this co. from for. exchange betters/traders ?
.....could they vanish fairly quickly if they make losses or they think there is safer profits to be made from trading oil price, natural gas price or the price of wheat ?

[red ninja] 27/10/2023 15:39

Investors Champion anknowledges the risks, but still likes them :-

"Why is it a Bonkers Bargain
We acknowledge this business has little real visibility and the departure of the former CEO has brought further uncertainty in a very fragile market, but the £85m valuation at a share price of 75p looks fantastic value for a business forecast to deliver pre-tax profits of £13.4m and earnings of 9p per share in the current year to December 2023 - PER 8x. Forecast free cash flow of £7.8m suggests a free cash flow yield of 9%, after a significant £4.3m of investment in capital expenditure to support of growth .

It’s resilience over the pandemic (and commitment to the dividend) should be commended, yet this is also not reflected in the share price.

The reinvigorated growth strategy is at an early stage. This includes developing new, higher value products (Structured Solutions); leveraging technology to embed the proposition more closely into the client’s day-to-day (Online trading, Alternative Banking); and capitalising on International growth through launch in both the Netherlands and Australia.

The Amsterdam office, which only opened in March 2020 and received its EMI licence in 2022, has been trading ahead of expectations and they await an Australian licence with the intention of opening in Sydney.

While AIM peer Alpha Group International (formerly AlphaFX) has developed a more extensive technology focused offering, and has been faster growing, it carries a rating nearly more than twice that of our Bonkers Bargain – ALPH: PER Dec 2023 28x. A high margin growth business delivering high returns on capital like Argentex justifies a much higher rating.

While additional costs will constrain earnings in the short term, these are in support of future growth.

Argentex is a simple, high return business, which avoids speculative FX trades and continues to focus on mainstream, low volatility currencies.

With growth having resumed the current £85m valuation (at 75 pence) remains firmly in Bonkers Bargain territory.

It remains a minnow in a market dominated by the large banking groups and a sizeable growth opportunity beckons.

Patient shareholders will also be rewarded with a now 4%+ dividend yield."

It goes without saying that not all Investor's Chamion tips succeed.

[sdmbot] 27/10/2023 11:23

Who are you referring to when you put ALF - is that Alpha Group?

[toffeeman] 27/10/2023 10:50

Bolt on for ALF - small change

[gopher] 27/10/2023 09:39

Easy to underestimate the role of personalities in small companies. Undoubtably personal tensions have existed for a while, there is speculation earlier in the thread around whether they would make there next figures given the headcount increases with new headcount being less productive than old. My view is that they won't make the numbers and CEO has fallen on his sword.

[thomas11] 26/10/2023 17:03

Cornerstone went through a very similar experience, change of CEO and strategy worked wonders, hopefully the same will happen here.

[topvest] 26/10/2023 15:54

Worth a look again in 2024 maybe. More bad news almost guaranteed.

[chinahere] 26/10/2023 14:12

Looking at the positive, the new CEO Mr Ormonde has a good track record by the look of it. Cardsave was acquired by the big Worldpay:

[yump] 26/10/2023 13:27

I’ve taken a loss here as well. If the word strategy appears anywhere on a stock at the same time as “revise” or “consider̶1; or “review” - pretty much a red flag.

[smithie6] 26/10/2023 13:00

Today's RNS included this text
"We have recently conducted a review of Argentex's strategy and have identified a number of areas of focus to ensure the continued growth of the business."

So....the strategy has been changed by the bod....& the CEO was clearly opposed to that & has been removed by the bod.
Logic says that some parts of the CEOs strategy will have been stopped or cut back by the bod.

imo there has been a cut back in performance which has forced this review of strategy, otherwise it wld not have been done imo. That is imo news that will be released at some time. (Any reduction in trading will hit the bottom line quite hard because of the increase in costs (staff numbers are up a lot).

[miti 1000] 26/10/2023 11:35

Taken a 50k hit on this dog and am out.

Reasons...well, clearly..why has Adams been sacked? Dangers of a profit warning , 2 founders gone(alarm bells on financial shenanigans spring to mind .Probably unfounded but anything possible with this hopeless outfit) .

Also , will they need a rights issue to shore everything up ? If they were doing well , why the terse rns and indeed why get rid of him.

Lastly, he owns 13%....that's an overhang. The last plonker founder had his shares dumped at a terrible price so why should Adams's stake be sold at any good level.

Anyway, good luck holders , hope it works out for you.

[magnets] 26/10/2023 10:12

They look glum in that Vox video

[earwacks] 26/10/2023 09:35

By their own admission they need to digitalise. So more investment needed. Harry mentioned a slowdown in interims. Dreadful RNS, no explanation of sudden CEO departure same as when Jani left and dumped his entire holding to the the board at a huge discount, cant have imagined their investment would have sunk below 80p again. It looks financially in better shape than then, but one has to question their attitude to their shareholders like many Aim stock. Equals, (down a couple of pence in sympathy?) looks to be at the other end of this massive market. At pains to point out their exemplary fair and supportive treatment of staff. They made a special mention of a couple of staff who became seriously ill. Contrast that with the handling of Jani/covid affair which suggests a chasm right there in difference of HR, as there is between the two companies when ‘acting in the best interests of all shareholders.’ I think their only interest will be whether to take it private. Cant imagine this is good pr for clients either