Hostelworld Share Discussion Threads

[aishah] 10/4/2018 12:50

Peel Hunt, BUY. 475p target

[davr0s] 10/4/2018 12:11

Sloppy headline shown on news feed - the FD said they were stepping down in December. Trying to create headlines from old news

[trytotakeiteasy] 10/4/2018 09:08

Results are very much an invest for growth story. No special dividend. I quite like it as bookings growth and investment are what will drive the business. The technology investment is also good. I make it 17.5X historic P/E stripping out cash and 18.42X with cash. Final dividend about 2.86%. So after that is paid the historic P/E is about 17.9X. Not overly expensive but not cheap. If the investment and new strategy boots booking growth it has to be good. Cash isn't affected by the new strategy this year (cancellations) only revenue. Bookings in Q1 were in-line with expectations.

[topvest] 10/4/2018 08:05

Great results, but a bit of a negative outlook. Revenue deferral, exchange rates and challenging conditions. I've sold out for now. Bought at 179p after the last profit warning so a nice return.

[trytotakeiteasy] 09/4/2018 18:12

Quant - they seem to spend like crazy on marketing at present. They also have a number of other businesses. I am not sure there is a complimentary business they can buy. They have their niche in hostel booking. Not really sure where else would help that niche.

The key thing here, in my view, is defending their niche and benefiting from the growth of hostel accommodation. Anything they can do to meet this objective must be positive.

[quant_investor] 08/4/2018 23:21

There are various ways in which management could use the cash to increase earnings eg. New Marketing Channels, Sponsorship, JVs, and of course acquisition of a complementary business (as GOCO did recently). In the case of HSW this could be done largely from cash reserves and be earnings accretive.

It does seem that the market expects some kind of earnings surprise as figures that are in line with broker forecasts normally retrace on results day. In the case of HSW with recent share price weakness this might be less likely.

[trytotakeiteasy] 08/4/2018 20:48

quant_investor - Your previous points about HSW were valid in terms of the weak pace of second half growth. The valuation had also crept up to a forward P/E of about 20X. However, there is probably about 5% cash so that is about 19X excluding cash.

Use of cash - I don't think they really need much cash to grow given that they have the platform. They could spend on a marketing campaign but that is probably about it. Their major cost is already marketing.

Agree that the outlook statement will be important.

HSW versus GOCO - I think you have to remember that GOCO has a fair bit of debt and is in a market that is increasingly mature. Also GOCO has to compete with companies offering similar services. HSW has no debt and travel should be a long-term growth area. HSW is also the leader in its niche. People want to travel whereas people don't need to switch energy supplier. So I quite like HSW for is secular growth potential and market leading position. However, HSW could be crushed by companies like Booking Holdings.

[aishah] 05/4/2018 23:20

GOCO is quite undervalued imo. I have taken some profits here recently.dyor

[quant_investor] 05/4/2018 19:04

Would have been better selling over £4 but you can’t always get out at the top.

The recent share price weakness in part maybe due to profit taking in advance of results as the shares had been on a pretty good run. Others may have needed to realise gains prior to the end of the tax year.

I’ll look at the results and outlook statements carefully and reconsider my position (I have a bit of cash on the sidelines) I would prefer HSW to try and use the cash rather than pay a special dividend.

Valuation and growth look more appealing at GOCO perhaps?

[trytotakeiteasy] 29/3/2018 15:36

quant_investor - looks like you may have been right to sell. Results on 10th I think. Hopefully a special dividend and positive outlook.

[trytotakeiteasy] 14/3/2018 18:53

Discussed here:

ukinvestormagazine.co.uk/hostelworld-defends-niche/

Not a clear cut situation as although Hostelworld may be a leader in hostel booking it is up against much larger competitors. In theory a good business with growth prospects but in practice no one has to use its app. They can use booking.com or another rival or just book directly.

[aishah] 14/3/2018 09:03

Peel Hunt upgrades to BUY and sets 475p target.

[quant_investor] 19/2/2018 18:35

I’ll be more concerned with how my PF does as a whole (of which HSW was only ever a small %) though if it continues as it has in recent years I’ll be happy enough :-)

[trytotakeiteasy] 19/2/2018 17:30

Quant - I understand that but it is the long-term outlook that is important rather than a six month period. Ok lets judge your sell decision in six months after the final and the interim results.

[quant_investor] 18/2/2018 21:17

i think the extremely clever investors thought ‘that the growth story is not clear’ lol

I tend not to judge my investment decisions over a 3 week period. FWIW I’m still graduslly moving away from the home bias within my PF to hedge against an unfavourable Brexit which would see a devaluation of the pound.

Hope your investment goes well here. It matters not to me.

[trytotakeiteasy] 18/2/2018 20:18

I wonder what all the "extremely clever" people who sold out after the full year trading update are thinking now. We will have to see with full year results in April.

[trytotakeiteasy] 25/1/2018 00:14

Bookings were off 4% in the first half of 2016 and up 2% in the second half on the previous year. So the second half of this year had a tougher comparative. Agree though that the modest growth in H2 2017 does call into question the growth story. But overall booking growth in 2017 was pretty strong. Cash should be approaching 10% of the market value. So the ex-cash P/E is around 18X. I think they will pay a special dividend this year. It is true, though, that the growth story is not clear.

[aishah] 24/1/2018 22:22

Been invested in OTB, GOCO and HSW for a while now. Lots more to come imo. Please dyor

[quant_investor] 24/1/2018 22:00

Rather pleased to avail of an unexpected mark up this morning to realise a useful gain.

Based on the forecasts from Stockopedia I was expecting around a 10% top line increase. I noted the margin improvement but doesnt look like eps growth will be that impressive and the outlook is for more of the same.

I still think this is a solid investment with a more than useful yield. However I have positions in related stocks (OTB & GOCO) with stronger growth prospects.

I am overdiversified with respect to UK stocks so I'm gradually increasing oversees investments with Brexit looming. I guess others are starting to do the same?

GLA

[sirrux] 24/1/2018 19:15

I meant the big rebrand, video campaign that was part of their strategy to grow their footprint. It wasn't too bad but I'd have expected bigger growth rates to follow in 2017 despite the headwinds. I think the management will be under pressure now. It has potential and nothing too disastrous but I am losing confidence. Maybe I expect too much for my money!

[trytotakeiteasy] 24/1/2018 12:06

Sirrux - the big push they made? You mean the capital markets day? Second half growth weak but overall growth ok for the year. Key is improving margins and they highlighted that this continued in the second half. A cash rich business paying special dividends, with improving margins and an underlying growth trend. They should have a strong competitive position in hostels versus the competition. Seems ok to me but I agree second half growth was the weak point in the update.

[sirrux] 24/1/2018 08:22

For the big push they made, would have liked to see them do a bit better. Growth is critical in this market, the competition is tough from the US players. Decent, but is that enough?

[thewheeliedealer] 20/12/2017 22:21

Hi all,
What a nice change to see a quiet Bulletin Board !! I have been looking at HSW for a while but not yet bought any. However, I recently wrote a Blog about them which you can find on my Blog Page - you want the entry from 14th December 2017. It should give a reasonable overview of the Company and some thoughts on valuation and suchlike:



I hope it helps, cheers, WD
@WheelieDealer

[shoee62] 31/8/2017 11:00

Cash machine; Up to buy (Berenberg)

Since its profit warning in May 2016, Hostelworld has seen a continued
recovery in all of its key metrics, culminating in it delivering 34% PBT
growth in the first half of this year. Given its strong recovery and our
growing confidence that Hostelworld can prove a growth business, we
increase our EPS estimates for 2017-19E by 8%/11%/12% respectively. We
also increase our price target to 370p, and upgrade our rating to Buy.

[runthejoules] 31/8/2017 08:47

Do they know it's ex-dividend day at all? I think this is a magic stock. Website's much more user-friendly than airbnb & it's kind-of recession-proof, esp with the divis. It could hit 400 at this rate. Just hoping one day it will stop vacillating so much and we won't have to trade it, just hold. Only threat is that of one of the big boys like google drinking its milkshake, as could happen with any internet services company, like rightmove. Keep an eye out, GLA.