Plus500 Share Discussion Threads

[cfro] 18/8/2017 15:41

Planelondon,

nice informative post.

Longer term shareholders here (not me!) i think have suspected for a while that PLUS was doing ok from crypto currency trading. Your calcs seem to confirm that now.

[sailing john] 18/8/2017 15:10

PL - My model for 2017 currently gives a PAT of $190m or around $16m/month
(vs your calc for June of $32m which I agree with - although tax payments might be lumpy and sit entirely in other months? but that doesn't account for the magnitude of the step change)

I might (will) have to revisit my numbers when we get the Q3 TS!

[sailing john] 18/8/2017 14:37

Planelondon - nice spot re final month cash move. I had used the 5 months to 31 May cash generation to validate my model prior to 1H results and it tied up well. I hadn't looked at the final month post results.

As you will know they make good margins on Cryptos with spreads at typically around 0.5% Bitcoin and around 1% for others (which is higher than IG) but PLUS offer more choice with 7 offerings vs IG with two.

Cryptos feature on their Twitter feed a lot

[elcapital2017] 18/8/2017 14:27

It really makes me wonder......................

[planelondon] 18/8/2017 14:21

Sailing John, I think you're right, the point when PLUS's PAT matches and exceeds IGG is not as far off as some might calculate.

In the trading update RNS on 2 June, PLUS stated current net cash balances stood at approximately $191m as at 31 May 2017. In the interim results as at 30 June 2017, 30 days later, it was stated PLUS held cash of $220.7m. This would indicate that in the single month of June alone PLUS added $32m+ of PAT (the only other balance sheet transaction in the 30 days being the $3.2m of expenditure on the share buy back). Effectively, one-third of the $90.7m of the net profit in H1 came from a single months trading. As VIX was fairly subdued in this period, IMO this phenomenal result was almost entirely down to the new product offering of Cryptocurrencies that were introduced and heavily marketed from mid-May onwards.

If this performance has carried over into July/August which the outlook in the interim's indicated it had, PLUS's PAT for the full year might well be within striking distance of IGG's 2016/17 PAT.

[sailing john] 18/8/2017 13:11

How long until PLUS's PAT = IGG's?

Well not as long as you might think! perhaps?

IGG PAT for 2H was £86m

PLUS PAT for equivalent period 1H was $90.7m or £70.3m at 1.29

Splitting PLUS H1 PAT in 2 quarters prop to rev gives Q1 PAT of £29m and Q2 PAT of £41m

So getting close to IGGs quarterly PAT of circa £43m

IGG MC £2.45bn vs PLUS's MC of £1.0bn

That gap needs to close a little - or a lot!!!!

SJ

[letsmakesome] 18/8/2017 08:03

Is Plus500 on trading halt this morning?

[shaker44] 18/8/2017 04:43

And trumps pig's blood bullets comment. Is he unhinged? Seriously.

[sailing john] 17/8/2017 22:12

VIX up 32% to 15.5 - mix of reasons given - Earnings mainly and Barcelona?

[interceptor2] 17/8/2017 11:54

free stock charts from uk.advfn.com


Since the interim results last week the volume levels have held up very well, on the day of the catalyst volume was about 9 x average volume and has since held up at about 3 x the average. Could be a sign that of accumulation by institutional investors?

Similar volume pattern to IQE after their trading update in July.

[elcapital2017] 17/8/2017 11:31

i never said i was short at 400. you are lying

[sailing john] 17/8/2017 11:29

El C / Lydnem - So you call it short at 400 in January and all the way up to 650 but don't back it up with £s - thought so!
Now you say short 805 or 801 make you mind up! (perhaps just another made up trade)
GL SJ

[sailing john] 17/8/2017 11:14

El C - Well you have been short and wrong! all the way up from 400 in January I am now bagging in just 8 months on my largest position.
GL - SJ
PS - Where's Lydnem? - Gone into hiding!!!!?

[elcapital2017] 17/8/2017 10:51

It is hard to say how to value given the amount of mistrust so I cant agree with your 9-10.

[sailing john] 17/8/2017 10:50

Lydnem/El C - Re 12x I agree (11707 above) but currently trading just below 7 and should be 9-10 imo so a potential 40% upside - then add recent revenue growth and reduced marketing costs and valuation becomes even more compelling. ESMA the only cloud on the horizon but affects IGG similarly.
SJ

[elcapital2017] 17/8/2017 10:32

it will never trade at 12x

[shaker44] 17/8/2017 03:24

And I guess the market makes a judgement about regulatory risk globally to discount from whatever valuation model they choose?

[thorpematt] 16/8/2017 23:27

Some years ago I became rather obsesssed with the concept of valuation (for listed companies). I studied all sorts of methods for doing so. In the end Benjamin Graham provided with the most comprehensive tools for achieving and applying sensible formualae. I actually developed my own method (based on his teachings), which I won't fully reveal here to achieve my goal. What became evident as I began applying it to my own portfolio and watchlists was just how well it matched most of the listed stocks' current market price.

It has to be said that I looked at all sorts of valuation models during my studies and in a slightly ironic twist I found that there was almost as much truth in the one book written by Robbie Burns (NT) as was in Mr Graham's "security analysis".
For anyone who's read both you will know that it is hard to imagine 2 books more dis-similar to each other.

Incidentally the software I subsrcibe to for stock screening has a number of useful methods for valuations (which it supplies automatically). It lists:-
Discounted C/F £14.40
Relative to sector £12..75
Graham formula £25 (people DO NOT understand the context of his formula often IMO)
My valuation? with present USD/GBP conversion = £14.20 (FWIW).

[pbutterworth1] 16/8/2017 21:38

Sj, thx for 15gbp @12 pe from yr model

[sailing john] 16/8/2017 10:22

The other plus for me with PLUS is that it provides a good hedge against any Market downward moves or shocks since volatility, especially in a downward direction, is usually good for leveraged derivative Brokers.

[sailing john] 16/8/2017 09:33

For info PE 12 is just over £15 in my model

Whilst I'm not quite so optimistic re PE I think they will be able to grow market share and high value customers so could reach that price through growth. (I have always underestimated growth in the past and have currently assumed Rev slightly reduced in Q3/Q4 compared to the stunning Q2 performance but slightly higher than the combined Q1+Q2 Rev) Unless ESMA rule on limiting advertising I don't think removal of bonuses and reducing leverage will have a significant impact on the larger Regulated participants such as PLUS and IGG - and already in place for some jurisdictions.

Next major news Q3 KPIs late October (and IGG 1Q late September for a market view of Jun-Aug)

[interceptor2] 16/8/2017 09:31

I agree with the estimates here, after the interim results I pencilled in a conservative EPS estimate of 121p which is still only a PER of 7.4 at 900p level. I say conservative because I have just assumed a same again performance in H2, yet historically PLUS tend to enjoy a stronger second half.

As mentioned here market is still catching up with the excellent interim results, it does take time for the market to adjust after a strong catalyst.

Wonder if Jesse Livermores favoured round number theory will work today at the 900p level?

[pbutterworth1] 16/8/2017 09:20

I agree. Long term pe 12