Buybacks are just lazy.While increasing EPS may look attractive, doing so via buybacks alone is hard to sustain in the long run: companies create more value through organic revenue growth and margin improvement. Artificially boosting EPS can be short-term in nature, and can even siphon capital away from growth initiatives.Also it means directors inflate their own bonuses as they increase the EPS. Mergers and acquisitions seem more appropriate to me. |
 Agreed, my point was to emphasize what they could do and the value that was on offer. Of course, I don't expect them, to spend 20m. I used that figure because it is what they spent on the US acquisition.
They fell in line with the large shareholder who took the dividend and sold to Blundy last year as far as I can remember. Funds don't really have any opinion other than to pay dividends. It usually takes a strong investor to make the point. As your fund manager comment evidenced and you acknowledged this morning, some don't know what they are talking about. It took me 2 seconds to refresh my memory by going to the AR to disprove the point on incentives. Honestly, I hope you don't have money in that fund. It was an incompetent thing to say. I want to say the bar for the profession has been lowered but I have a feeling funds and fund managers have for the most part always been a con. Any analyst worth his salt would be buying this company greedily if he wanted his fund to perform and wasn't restricted by stupid rules. Instead, they appear to be selling... and manufacturing falsehoods.
I seem to remember Mr Buffet having a famous interaction with a certain board about buybacks. Apparently, there was no use in buying back the shares because of the Efficient Market Hypothesis espoused by the professor on the board. Luckily for shareholders, Mr B put him in his place, but the psychology that upheld the infallibility of the market still holds in the naive mind.
If people want to vote me onto the board, I'll make this point happily for the 50k or whatever is a director gets :) I have a friend who is of a like-mind and has interacted with the management here to success. I know he will be making the point.
An amateur has a better chance of outperforming a professional provided they remembers they are an amateur. I'm quite sober about this. I think a lot of people on here are or they would put their money in funds.
I think I might take a break from these boards 😂 |
If they spent 20m on buybacks, EPS would grow by over 7% You chuck in the guided growth on top, circa 15%.
Mgmt won't. Fell in line with the wishes of Artemis and other larger income shareholders. A volte face now? Never say never but very unlikely especially as running around buying stuff overseas. |
OJ, that is very possible given how broad the sell-off is. |
Fund selling |
SH would own more of the company and more of the profit. It's not to support the share price. |
It appears very few price-moving investors are interested in the pe or eps, which give a low rating already, so a buyback is hardly going to do much. Fake eps growth might make the view worse. |
For every share bought, you would get a roughly 19% return on next year's after-tax profits. Sod waiting for the prelims. They should do an announcement that they are repurchasing shares now. 19% ROI!
If they spent 20m on buybacks, EPS would grow by over 7% You chuck in the guided growth on top, circa 15%. |
fft, that's what Elsa is saying because it fits the description, but we don't have a name as yet.
I would have thought Garven will be just for the US and maybe Canada.
I think you are right. Working your way up to $25m of sales would likely take some time going from a base of zero. Doubtless, management are not ignoring the incentive to grow revenue from partnerships, but the PBT measure should keep it sensible, and I trust our management team.
Apologies for the stream of messages. Yes, I do drink too much coffee... |
Yump, * Apologies, I didn't see you put 3 x median and not their salary. |
I don't mind points being made. I just don't think the incentives are terribly skewed to disfavour share holders. There is a change I would like, but I will communicate that privately. |
Its always tragic when directors lose some bonus thats already 3x the median UK salary. I feel for them.
Perhaps they should emigrate and take their amazing entrepreneurial flair elsewhere.
Then we can concentrate on finding the next people that will create a Google, who are motivated by actually creating something, rather than just rearranging the mantlepiece. |
From what I can see Moonpig has a 30% weighting on revenue. I don't think this is abnormal, but worth watching. We are half of that.
Did they compare it with peers? |
Fund manager chit chat. |
Ok.. refresh my memory. What's the link between Kohl and card factory ? Or is that the wholesale and retail agreement in the USA announced early December.Very early days in which case. I think of it like the Aldi or Matalan agreements in the UK. Takes time to bed in and only incremental sales/profits. Is Garven going to be supplying these ? If so, that is good since Garven are also a manufacturer and thus avoids tariffs. Garven is a small company (about 20 employees). Family owned/run. I can see that outside experienced mgmt coming in could make a difference in working practices and the approach taken. Rome was not built in a day. |
Where are you seeing that Elsa?
I've seen no links between CARD and WHSmith. |
Worries apparently that they might be sniffing around looking at the WHSmith stores...like that makes sense - £100m. |
Looks finished |
They would probably want too much for their business as they do their cards! |
Maybe we should have just bought out Clinton's Cards, and rebranded all CF shops to Clinton's Cards.......sounds a bit more upmarket. |
Definitely better names. Quantum Cards get my vote ;) |
That's exactly what went through my head as well, but why not go one step further and make the new name "Quantum Cards". 😉 |
Or maybe the AI Card factory might be better.DbD :-) |
Yeah, I agree, moved around 20k for an extra nibble yesterday. Seemed like an ideal time to buy. Getting a 6% yield this year with the potential for that to increase to around 10% in the next.
Fft, I'd love it to be more but I'm not one for tea-leaf reading. We've seen it before. It seems juicy stable cashflows are out of vogue ATM, but we might get a bidder.
I watched an interview with the HR director last week, and she talked about the way the company had removed a lot of technical debt and how they believe CF's offering is the best kept secret in the online world as almost all the in-demand functionality and offering can be gotten at card for a fraction of the price. Maybe we need that to get some interest from those excitable brokers. All feels a bit dot com, though. Maybe we could change our name from: The Cars Factory to E Card Factory. Worked in the 90s.
The consolidation of GP into the main offering should give us a boost there and some skew that might act like a shot of Viagra to those 'experts' who tell us the prices thing should be. |
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