Plus500 Share Discussion Threads

[rackers1] 13/9/2018 07:56

The troll is back. Smug with his 100 point gain, when silent holders here have got over 1000 points bagged.Total buffoon sb888 is.

[s_a_b] 13/9/2018 07:27

Nice to see some informed and balanced comments on here again!The customer revenue point is a good one - my understanding is that they have always had the most revenue from a relatively small group of customers (80:20 or even 90:10) so while total customer numbers are useful it's the size and quality of those customers that really matters

[dumbbunny] 13/9/2018 00:10

Thechurch333, I wouldn't read too much into the low new customer number of 21,188 for Q2. The number tells us nothing about the quality, value or jurisdiction of these customers.

All the data and Plus500 commentary indicate new customers are increasingly being recruited from high-value territories where customers have higher lifetime values.

The fact Plus500 is now rated #1, by primary and secondary customer accounts, in the UK and Germany supports there has been a change up in new customer value.

Fewer but more valuable customers are the way forward and this will be especially true under ESMA's new rules.

[dumbbunny] 12/9/2018 23:29

Hussyo, I'm a marketing specilaist. I subscribe and have access to a whole range of web traffic data and analytical tools.

There are many providers of this data with various levels of access and tools depending on what you are prepared to pay for it. www.alexa.com, www.luckyorange.com, www.hotjar.com and www.similarweb.com to name a few. To obatin useful data, you usally have to pay significant fees but it's there if you want it and are prepared to pay.

[thechurch333] 12/9/2018 23:15

I think it is a mistake to focus on the rating right now. The market has always been suspicious of the sustainability of returns and growth, but for the first time it has evidence these may be coming under pressure. I would add that half way into Q3 the company said trading was in line with market expectations. Well, look at what market expectations are for H2...
I don’t know how committed the short positions are, but they have been given a bit of a free hit by the company until we get more news on trading. They also correctly predicted that the founders would be heavy sellers again before we get that news.

[gettingrichslow] 12/9/2018 22:55

Church, I get that there will be question marks on sustainability of growth, so one would think the rating would take that into account, but to this extent? And after the company has beaten forecasts year after year? You'd have thought that the track record might start to count for something after ten years, no?

[thechurch333] 12/9/2018 22:46

Noujay - I have huge respect for Hanbury and Odey. They are taking a view on the sustainability of returns. I think their arguments were a lot stronger before the recent interims than they are now. The Liberum Research is very poor and offers few insights. To be fair to the analyst he is publishing what he is told. He knows his forecasts are complete nonsense.

[thechurch333] 12/9/2018 22:35

GRS - Israeli companies listed in London do not have a good record and are treated with suspicion. The company has grown very fast and is extremely profitable particularly when compared to more established peers - many think it is too good to be true and is simply not sustainable. Having said that, the shares have still done very well.

[dumbbunny] 12/9/2018 22:33

Hussyo, I'm seeing record marketing spend since mid-July on keyword paid search traffic in UK, Germany and Australia. It is 50% higher than at any time previously. This is likely to lead to higher AUAC in Q3. However, the long-term, lifetime value of these customers will be superior to those customers the company has historically on-boarded. It would appear the company is now going head-to-head with IG Group in its core markets.

EMSA will most likely cause some short-term disruption to revenues and ARPU but it looks like it will also give rise to opportunities to grow/take market share in high-quality, high-value territories as well.

[noujay] 12/9/2018 22:32

A very interesting post and thank you for it. Aside from the various analysis of the numbers and questions as to esma impact on growth, increased spend for apparently little return etc, I would observe that Odey have been in this a very long time with Hanbury seeing it as hugely undervalued. He has probably done at least as much analysis as anybody if not more and in the face of huge volatility Odey hold, and have increased, their position. I am not for a second suggesting they bat 100%, nobody does (excepting el capital of course!), but they clearly have deep conviction.Equally, Liberum posit a price of £28 on "super cautious" forecasts from Plus. That's significantly lower than Hanbury's estimate. Yes they are the house broker, but that doesn't mean putting out numbers that lack credibility.The Liberum target may well be based on IG comparators and the assumption that the two must soon start to be valued on a similar basis. Which means IG would be due a massive correction, or Plus a significant upwards rerate.Seems to me that right now the fall is overdone and fair value sits between current price and the highs, based on clarity in the next update.

[nurdin] 12/9/2018 22:13

thechurch333...good post.Perhaps you could explain why IGGs share price has remained relatively unscathed when they are facing the same regulatory headwinds as Plus? A serious question.

ps...disposals by the original investors and PTEC notwithstanding of course....

[f15jcm] 12/9/2018 22:07

Worth reading IGG's annual report. Their total number of active users declined in their last financial year while their ARPU increased. Hasn't damaged their share price Users are important but not everything.

"OTC leveraged revenue of £548.4 million was 16% higher than in FY17. The 144,600 active clients in FY18 were 2% lower than in FY17, which was more than offset by the 18% increase in average revenue per client to just under £3,800."

[gettingrichslow] 12/9/2018 21:55

Church, thank you for your post. At last someone has a proper go at explaining recent events. I think you make some very good points. But what are your views on why Plus has been on such a low rating for years, long before the recent results?

[thechurch333] 12/9/2018 21:32

Hussyo, the H1 AUAC numbers were indeed incredible, but driven by Q1, which even the company says is not repeatable. My reference was to the year on year Q2 numbers, which show some concerning trends.

[bulltradept] 12/9/2018 21:24

thechurch333,

If what you say becomes a reasonable assessment then perhaps we could be in to lower prices further down the road i.e. from growth to ex growth.

[hussyo] 12/9/2018 21:21

Nurdin is right, from 16.35 onwards it's all very hard to read.

church makes some good points, and it is unfortunate that index funds have possibly been filled by the two big tranches of sells. However, the AUAC was actually down 19% for H1, which is incredible, I'll say again INCREDIBLE, when considering EBITDA was up 195%. I have to say, I'm not seeing much in terms of advertising from them at the moment - just a small message on the Investing.com app.

The numbers to look for in the update will be how many of the 12% EEA traders, who account for 75% of revenue, they will have made into EPCs. It was 5% at the interims.

The shares, though, are falling, whether it's for a justified reason or not we'll find out soon.

[nurdin] 12/9/2018 20:49

After hour trades can be quite deceiving...hard to say whether they buys or sells

[financethoughts] 12/9/2018 20:46

Well, the trades through the day are typically in the low or teen thousand pounds, but from 16:38 onwards they are almost all printed as buys and they are significantly bigger trades.. for example 2 trades over a million pounds.. I look predominantly at fundamentals but this still looks interesting to me.

[hussyo] 12/9/2018 20:45

finance... you didn't finish.. what about them?

[rackers1] 12/9/2018 20:01

I heard his boyfriend gets brutal on him most nights so feels the need to take it out on all and sundry on here every waking hourPoor angry dwarf.

[gettingrichslow] 12/9/2018 19:52

He needs a girlfriend (or boyfriend?) and fast...