Plus500 Share Discussion Threads

[thevaluehunter] 03/5/2018 20:57

atletico madrid 1 up. Looks like Plus 500 will make it through to the Europa League final.

[interceptor2] 03/5/2018 19:29

In the recent trading update they said that after the large volatility in Cryptos which helped them to record results in Q1, that intertest had subsided and expect more normal conditions for the rest of the year.

But I believe the volatility that attracted the increase in new customers is still present, and as such would expect to see continuing market beating expectation statements throughout this year.

Over the past 10 trading days Bitcoin has seen intradays swings between 4% to 11% which gives an average of 5.5%, this is still volatile in my book. And the new Cryptocurrency EOS that PLUS have recently added to their platform has seen an average intraday movement of 18% over the last 10 trading days. The highest was a 40% difference 9 trading day back with yesterday seeing a 20% difference.

Even the DOW is more volatile than usual with a 400 point move from the low of the day as I type. Over the last 10 trading days there have been four trading days with the following points daily swings, 250, 300+, 300+, 750, and this isn't including today.

[podgyted] 03/5/2018 16:54

Just a thought. Why don't they do some share buybacks - shares undervalued according to every post I can see above - and they must have a massive amount of cash after Q1.

Like my dividends, so not a normal fan of buybacks, but a bit of both seems to fit here.

[sailing john] 03/5/2018 09:23

Noticed a strong move up yesterday from 2pm. US Interest? Will be interesting to see if it repeats today.

[thevaluehunter] 02/5/2018 21:19

I've updated my forecast model and at the current share price I estimate the following for FY18: EBITDA $580m; year end cash $540m; EV/EBITDA 3.1; EPS 4.0; P/E 4.2. Dividend >10%.

[thevaluehunter] 02/5/2018 18:41

I still can't believe they nearly achieved the full year FY17 ebitda in the first quarter. Absolutely incredible for the size of the business and virtually no capex spend!

[podgyted] 02/5/2018 17:12

And a dividend of 6-8%

[thevaluehunter] 02/5/2018 14:02

I challenge anyone to find a business growing ebitda by over 300% on a quarterly basis with a EV/EBITDA of sub 5.

[thevaluehunter] 02/5/2018 13:09

There's quite a big gap to fill - plus500 is on a EV/EBITDA of sub 3 now and IG is over 10. The model is also now generate more profit than the large betting groups. I've been here a long time and still think we could double from here.

[nurdin] 02/5/2018 11:23

I think yesterdays concerns have now given way to a more positive view...and an awareness of the valuation gap.Should see a decent move from here....imo

[thevaluehunter] 02/5/2018 10:52

I think analysts are mostly rules based, unable to spot mispricings in the market and generally suffer from groupthink. They need to wake up look at the numbers and see this is a bigger and more profitable business than IG.

[chucko1] 02/5/2018 09:55

@church, I think you are correct. He who pays the piper ...

I suppose when you consider the extreme volatility of PLUS over the past three years (not so much the share price but the various other things it has experienced) a managed newsflow is of higher importance.

[thechurch333] 02/5/2018 09:32

The analysts are doing what the company tells them. Liberum analysts clearly want to increase their forecasts more, but the company is saying no. Plus500 are effectively paying their wages, so they do as they are told. That’s the way it works when you are corporate broker.

[chucko1] 02/5/2018 09:29

A more important consideration for them is to be not so far from the crowd - that is to say, it is safer to have earnings estimates as part of a bunch. Why? Job preservation. You see this with economic estimates all the time. You get 72 estimates for important numbers such as US jobless, they are generally quite narrow in range. But there are several occasion on which, for example , the range might have been 150k to 270k (a wide range), and the number came in at 320k. Reject the null hypothesis, as the statisticians would say!

Corporate earnings estimates follow the same pattern. They are entirely redundant other than indicating direction of travel. Over the life of PLUS, the earnings estimates have averaged a 30% underestimate. Always in a negative sense.

Compare that with BP. Average absolute surprise of 7.70% though actual average of only 1%, so at leat in that case the surprises are without trend. 5% surprise for MKS with trend, and even FB has a surprise of only 7% and 4% respectively.

Interestingly, IGG has only a 2% and 1% surprise. It therefore seems plausible that the analysts hate to upgrade earnings very significantly as they suffer from some form of financial vertigo.

[aakash30] 02/5/2018 09:08

Agreed Chucko, thats a good point. @church, I'm curious why the sell-side would be prone to be cautious and update with quite non-sensical figures. So that they can give frequent upgrades and get more air-time? Isn't their job and value add (in theory) to be accurate which should benefit them, if not in the short run, in the long run.

[chucko1] 01/5/2018 19:59

Just look at today’s price action. Then take a look at Odey’s holding over the past month. They just keep selling and as said before, they simply have to under UCITs regulation.

They sold on April 4 and on April 26. share price moved from about 1200p to 1420p in that time, so if the share price moves up by 20% then they have to sell about 2%. That is pretty well what they did. share price shot up today, so maybe they find today a good day to sit on the offer and just keep selling again. And once they have sold what they need to, do not be short, as the broker said today!

[douglas fir] 01/5/2018 18:54

High-yielding Plus500 shoots the lights out
By Graeme Evans | Tue, 1st May 2018 - 14:22
Share this
High-yielding Plus500 shoots the lights out

Even though the frenzy around cryptocurrencies has long since cooled, there's been no let up in buying interest in online trading platform Plus500 (PLUS).

Shares in this high-yielding AIM-listed company, which enables retail investors to trade contracts for difference (CFDs) on a wide range of securities including cryptocurrencies, rose as much as 15% to a fresh record high today above 1,600p.

Broker Berenberg raised its price target by 16% to 1,790p, noting that the company is trading at a discount to rivals IG Group (IGG) and CMC Markets (CMCX). Liberum made a similar move to 1,729p today. "Don't be short," writes Jeremy Grime, well-respected analyst at broker finnCap.

The upgrades come after Plus500 raised earnings expectations for this year on the back of an "exceptional" and record-breaking first quarter performance. This was triggered by a major surge in customers wanting to bet on the price of Bitcoin and other cryptos at the end of last year and early part of 2018.

The Bitcoin price surged towards almost $20,000 amid a flurry of headlines and speculation in December, before returning back below $9,000 in recent weeks.

Source: interactive investor Past performance is not a guide to future performance

For Plus500, this spike in activity has done wonders for attracting new customers and boosting all-important KPIs.

First quarter revenues surged 284% to $297.3 million in the first quarter, equivalent to more than two-thirds of the 2017 total. The number of active customers jumped 204% to 218,187 in the quarter, lifted by the addition of 72,960 new clients.

Plus500 concedes that market conditions have returned to more normal levels in the last two months, adding that it does not expect a repeat of such an exceptional performance over the remainder of the year.

As Grime put it, this has made the task for analysts of coming up with an accurate forecast for Plus500 "feel like chasing a burning cat".

There's the added complexity of recent moves by European and UK regulators to clamp down on CFDs for retail investors, including the use of binary options.

Plus500 has said that is already aligned with many of the proposed changes, which it believes will enhance the CFD trading landscape by creating a more level playing field.

Despite raising their price target, analysts at Berenberg warned there was still much uncertainty around the impact of regulatory intervention and the eventual run-rate for active customers.

As a result, they have only increased their full-year revenues forecast by around 4% to $577 million, with the underlying earnings figure of $329 million up by a similar level.

However, Berenberg believes there is scope for upgrades in the future if Plus500 can navigate the current regulatory environment.

The team said that the company was trading cheaply at 8.8x 2018 forecast earnings and at a discount to IG Group and CMC Markets with 15x and 12x respectively. The projected dividend yield for 2018 is 6.8%, rising to 7.2% in 2019 and 7.5% the year after.

Since its 2013 IPO, the company has generated $578 million of free cash flow with the majority of this returned to shareholders. Alongside high growth and high margins, Berenberg notes that cash requirements in the business are low with very limited fixed and working capital requirements.

Active customer numbers, revenues and underlying earnings have grown at a compound annual growth rate of 40% since 2013, the broker added. The average EBITDA margin has been 55%.

[thechurch333] 01/5/2018 18:28

The analysts aren't stupid, they will have been instructed by the company to only increase their forecasts moderately so that the company can keep giving the market upgrades. The Liberum note is pretty explicit and I suspect the analyst is very frustrated knowing that his forecasts for the current year are materially wrong. It may be annoying for you today that the shares have not gone up more, but in the long run I think it's better this way.

[podgyted] 01/5/2018 18:02

Definately a possibility - sorry, rant over.

[sailing john] 01/5/2018 17:42

Yes and not the first time - I think they need to be awarded the order of the boot!
Not sure of the date of ESMA implementation (Can't see in EJ and not effective until two months after publication) so no effect on Q2 - and depending on volatility and cryptos their forecast revenue might well be reached in 1H!!!!!

[podgyted] 01/5/2018 17:25

Sometimes I wonder how analysts even dream of getting paid for their work.

According to ii Berenberg have increased their revenue forecast for the current year by 4% (!!!!) to $577m - because of uncertainty @ regulation.

Given revenues of $297 in Q1 this suggests quarterly revenues of $93m for the rest of the year.

If this is the case they should issue a sell recommendation (falling revenues compared to 2017) rather than increasing their TP to 1790.

Absolute BS! No brain cells. Pathetic.

[thevaluehunter] 01/5/2018 17:14

So for the last 4 quarters combined sales of $658m and ebitda of $451m. Their year end net cash was $241.8m add on say $320-350m cashflow for H1 less tax of say $70m in tax and other outflows and on an EV/EBITDA basis it's looking very cheap.

[poolefox] 01/5/2018 15:38

Referring to article on plus today on interactive investors

[poolefox] 01/5/2018 15:25

Don't be short PLus500! Tell us something we don't know

[...]