Best Of The Best Share Discussion Threads

[mammyoko] 15/8/2020 10:28

Buying at £18 and above, albeit in small volumes, will be adding to pressure on any interested parties. Can't see why the owners would accept a premium of less than 60%, given the earnings growth, cash generation and online nature of the company. Hence, a price close to £30 has to be a realistic prospect if any bid materialises. Given that this year's eps could easily be £1, this would value them at 30 times potential forward earnings which would, in my opinion, be a reasonable reflection of their value to PE.

Alternatively, in the event no bid appears, I can't see these falling below £12 now which, if £1 earnings was achieved would, in my opinion, be a buying opportunity. Excluding a bid premium, I would value these at 20 times earnings for their growth momentum.

DYOR.

[serratia] 13/8/2020 21:17

Inv,

I'm always searching for companies I can model ie being reasonably confident I can draw up a coming years P/L. Finding one I can accurately model is rare. Even then I come across one that's predictable but the prediction is that it will end up bust. I can see one now so I guess there's a good opportunity to short it but I don't short companies. Benefiting from someone else's loss is not my thing.
So at present BOTB is the only one with upside that I can get an accurate fix on the future.

[steptoes yard] 13/8/2020 15:13

Thanks for the response Serr...

I shall have to develop one on Microsoft Cruncher (which is another company I am an
LT investor in)

[investographer] 13/8/2020 13:11

Wow, good work Serratia!Do you know of any other companies with this kind of growth potential?

[serratia] 13/8/2020 12:58

SY,
A while back I developed a spread sheet to link things I find on the web to revenue. When I first put it together I tested it against that particular half year and as it looked good I bought in sub £3 as even if I was out there was plenty of upside potential.
At that stage I didn't know how accurate I could make it so didn't go in too heavily compounded by the large spread. My figures came out pretty accurately so I started adding.
For the latest annual results my model suggested £17.54m revenue and the result was £17.79m.
In addition I expanded the model right through the P/L to get to a cash flow figure. I could then use past ratio's for share price to cash flow to predict a share price. H1 last year was spot on H2 was targeting £10 from memory but then the offers hit taking it up to £15-16. The £10 figure was looking at the past and I could see revenue accelerating into this half targeting a likely price above £16 so I'm happy to hold and add a few at the higher prices. Then the potential offers came in and they accelerated revenue generation.
There are a couple of unknowns running into H1 figures. On the upside the mid week game should push up my ratio's but I've no idea by how much. Secondly the cost of customer generation will have risen as they've been giving away bigger prizes.
I adjust my model on a daily basis so todays target price will change over the rest of the half. If no bid comes in they may well drop back on expenditure to cycle back to what looked like their original target which implies a price ahead of £16.

[arshadte] 13/8/2020 11:45

I'm not sure about you guys. I'm seeing BOTB adverts a lot on youtube at the moment. That's a good sign!

[steptoes yard] 13/8/2020 11:33

Nice work serratia, I'm not seeing this being cut loose unless it meets the high expectations of the Board and they know the potential better than anyone. What criteria re using for your ratios?

[investographer] 13/8/2020 11:14

The Takeover panel granted dispensation over the 28 day rule, so no time limit. Surely they have shown potential suitors first quarter numbers.

[serratia] 13/8/2020 10:38

If you take the revenue generated in the last H2 results as 1 they pushed revenues to 1.8, over shot, undershot but it looks like that was their H1 target as revenue stabilised around that figure. Then a possible bid(s) came in. The board wanted more than the opening offers or they would have agreed within the 28 days. Looking at the figures they then set about maximising revenue and H1 now stands at 2.29* H2 with last month at a 3.25* ratio.
It looks to me that they've set a target price and probably used July's figures to back up their demand. July would have been a very big month.

[investographer] 13/8/2020 10:24

GVC have net debt of 2.64 BillionThere is quite a lot of money sloshing about in PE Private Equity & that is where I believe BOTB will end up if bought out.Two months of talks is very long so far & not sure why it is taking so long. The accounts must be pretty simple to analyse

[3ootuk] 13/8/2020 09:29

GVC just cancelled their dividend after interim results. Might not be prudent of them to bid £££ taking on extra debt. Analyst call at 9.30am for them, so if they were going to bid then would expect it later today or tomorrow now results are out.

[steptoes yard] 10/8/2020 22:26

Not enough volume to suggest anything corporate....I expect mm's have seen the numbers on yT and similar...after all if we know them, you can be sure they do...it's their job

[3ootuk] 10/8/2020 18:41

That 2095 buy was probably being worked

[peart] 10/8/2020 17:03

We're all just speculating I guess (I know I am), and not complaining!

[peart] 10/8/2020 16:59

One of my thoughts too 3ootuk, could be simply lack of stock.... Good call. Or maybe it's just normal market action, we've consolidated in the £15 - £16 range for 2 months and now a breakout??

[3ootuk] 10/8/2020 16:53

No major trades, so maybe just the sheer lack of stock the MMs have as everyone's holding tight for news either way.
Any major leak and this would be more like 25% up

[peart] 10/8/2020 16:15

Or perhaps there is some good news on web traffic to BOTB'S site, or the like. As said I'm unsure.

[peart] 10/8/2020 16:13

I'm unsure as to why we're popping up a bit today, but I'm not complaining. Definitely something different from normal activity over recent weeks. Who knows, maybe there is a nice £35 per share agreed offer going to be announced at 4.30. That would be nice!

[investographer] 10/8/2020 14:59

Increase in volumes & ath SP, news must be due.....

[arshadte] 10/8/2020 14:46

Maybe there is news coming out soon!

[mr roper] 10/8/2020 14:36

Breaking out today. 1750p paid

[peart] 08/8/2020 07:16

Ah, cheers Ryanc106. I'm probably just on repeat with my comments, as to be fair so are a few of us. We're all excited, fascinated, greedy for success, interested, hopeful etc., etc.. Those are certainly words that describe myself! I invested in about 20 tiny companies about 12-16 years ago, a lot turned to pulp or are festering at say 20% of invested capital, some I got my money back, some made a small return and this (BOTB) and another HCM are doing really well. (You might like HCM, Hutchison China Meditech, I think and hope its a monster healthcare company in the making, just a thought....)

These were all tax efficient (apart from HCM) EIS investments, but I'd probably in hindsight have done just as well if I'd ignored the tax position and chucked the lot into Diageo or the like! Hindsight is a wonderful thing!! In saying that these two are where my real profit potential is from now...

Small company investments are risky, tiny companies are riskier still, but returns if you strike it lucky can be huge!

From my experience you have to have a fair bit of luck in the tiny company investment game!

[ryanc106] 07/8/2020 16:36

Couldn’t of said it any better myself

[ryanc106] 07/8/2020 16:35

Concurring with what you said Peart

[peart] 07/8/2020 13:33

Ryanc106 ??