Plus500 Share Discussion Threads

[elcapital2018] 06/11/2018 18:47

12p down! so what, soon be well up as usual. you all know im always 100% right and you hate that!

[podgyted] 06/11/2018 17:55

?? Do we have a bit of a one-way bet at the moment.

PLUS with £10m of firepower below £13 and upside potential looking good.

Vix looking good for CFD providers. Almost wish the Republicans well to keep the volatility going.

[moneypenny2018] 06/11/2018 12:17

David he probably opened it on Q3 announcement at 12.48 hahah

[davebdavid] 06/11/2018 11:56

Hows your short going ElC ?

[moneypenny2018] 06/11/2018 11:47

I don't even mention 13 in any of my posts... I am not here to predict the bottom that is a fool's game

[elcapital2018] 06/11/2018 11:41

Playtech pulled because of regulatory concerns, not Odey, you are just making it up

We will see about my predicting skills

You are rather foolish if you think theyre trying to keep the price at 1300, even your fellow bulls will not agree with you

[moneypenny2018] 06/11/2018 11:33

Load of tosh? No one would buy this? A little reminder hasn't Playtech tried already but Odey was not ok with price? Good on him cause he has made much more. So basically you are not only rubbish at predicting the future but also at remembering facts

[elcapital2018] 06/11/2018 11:09

They are not trying to keep the price above 1300. Load of tosh that

No one would buy this company. Never

[moneypenny2018] 06/11/2018 10:50

ElCapital. Regarding your question on why would a company that has no debt, a fair bit of cash on the balance sheet and a lower P/E vs other competitors try to keep the price above a certain level.

Usually this is because they can become a takeover target if they don't... A competitor with a higher P/E can just buy you out issuing shares. Acquisition is accretive for acquirer (they buy a lower P/E business) and they also get access to a nice pile of cash... One of the reason Boards agree on buybacks rather then payout dividends.

[metis20] 06/11/2018 08:17

Last year's share repurchase was every trading day for about two and a half months. Just under a million shares were repurchased at a cost of just under six million pounds. Over this period the share price rose from about 550p to 800p. It then stayed above 800p for all but one close. That close below 800p resulted in the share repurchase restarting - but it was only needed for one extra day as ever since them the share price has been above 800p. It looks this time as if the floor PLUS is targeting is currently 1300p.

From the 23rd Oct 2018 RNS -

"Commencement of share buy back programme of an initial amount of $10m"

[elcapital2018] 06/11/2018 07:56

8000 shares lmao!

Aim to keep above 1300? Why would they need to if everything was so good? Polly peck did a lot of buy backs

[metis20] 06/11/2018 07:12

Share repurchase has started. Does look after all that the aim is to keep the share price above 1300p.

Aggregate number of ordinary shares of ILS 0.01 each purchased: 8155

Lowest price paid per share (GBp): 1294

Highest price paid per share (GBp): 1299

[andrewclarke99] 06/11/2018 07:08

There is the first RNS for 8155 buy back. Maybe this will give the share price a much needed kick start this morning

[andrewclarke99] 05/11/2018 17:16

Appreciate your effort and thoughts Financethoughts

[elcapital2018] 05/11/2018 16:23

heading for 10 quid

share price is important!

[financethoughts] 05/11/2018 16:18

Some thoughts since the Q3 update. To recap, the Co declared Revenue of $465m in H1 18 (exceptional Q1), and $100.1m in Q3, with 2/3 months of ESMA being effective. Current consensus estimates for Net Profit of $337m by YE2018 would require around $635m of Revenue, leaving only $70m in Q4.

My prediction for Q3 Rev ($101m) was within a gnats whisker of that revealed, but I'm none the wiser as to whether that was coincidence or successful modelling - I'll explain why.

First, the effect of the ESMA regulations. Effective 1st August, we have no idea based on 1 trading update whether we are still in a declining revenue picture or now firmly in a recovery from the immediate regulatory hit.. If conditions are unchanged you can extrapolate based on the past, but with a significant date-driven change of conditions we need to see the Q3 and Q4 picture to see a trend. Are we still in a declining revenue period, or are we continuing a general upward trend, albeit with a one-time step down effect from ESMA?

Second, post-ESMA, how has the landscape changed in terms of operating margin? Revenue has been, to date, a useful proxy for free cash flow as PLUS have managed to convert approximately 35-45% of Revenue to FCF, which the Co can use to buy back shares, throw off as dividends etc. However, how has ESMA changed conditions in this regard, how temporary or long term are these conditions, is the Company having to spend more to generate equivalent levels of revenue, is it converting that revenue as efficiently as before, are they gaining additional customers from other providers? Active user numbers were up in Q3, but new customers down. Average User Acquisition cost was significantly higher in Q3, and it remains to be seen whether the "higher level of marketing spend to attract higher value customers" will translate profitably as the company predicts.

Q4 initial trading comments given at the Q3 update were bullish, with references to positive momentum, increased volatility, growth in elective professional clients representing nearly 40% of EEA revenues, and a $10m share buyback program.

I remain convinced that this is a company who has been highly profitable for the last 6 years, not by chance. I believe the company management will navigate the impact of a changing landscape well, and adapt where appropriate. The question for me largely therefore becomes how long it takes to recover to 'normal trading conditions', (if the impact is a couple of quarters then we should be seeing ESMA effects largely resolved by full results time), and how the trading/profitability landscape looks post-ESMA & how the company diversifies to increase revenues outside EEA.

I'm not interested in share price per se, more where this Company valuation can go, and the free cash flow it can generate. I always hold long (not short), with a medium to long term bias - my holding period may not turn out to be long if the story changes, but I buy on the basis of holding for the medium to long term unless things change.

I look forward to Q4/final results with anticipation, personally expecting around $700m in Revenue (around 9% higher than current estimates). Key for me will be the trend picture with regards ESMA, and its effects on profitability. I will look at cash levels and FCF with particular interest. I'd like to see an increase in EPC status, representing around 50% of EEA revenues. Along with Q4 results, last financial year there was a trading update on 3rd Jan ("Post-Close trading update") which this year should give further clues to the above, albeit narrative based rather than audited accounts.

[elcapital2018] 05/11/2018 14:34

shorts may have hedged by going long? Thats calling closing!!

[moneypenny2018] 05/11/2018 10:27

yes lol. Typing in the tube has become even more difficult these days...

[fenners66] 05/11/2018 10:22

sky booking ? I guess you meant ski booking

[moneypenny2018] 05/11/2018 09:24

Also I cant stress how important volatility is here for this business. It is the equivalent of snow to a sky booking business... No snow no bookings... No volatility = reduced trades

The VIX term structure has now been inverted for 20 days straight... the longest streak since August 2011. With no signs of this changing, at least in foreseeable future

[trulyscrumptious] 05/11/2018 07:05

Thanks moneypenny2018.

[moneypenny2018] 04/11/2018 20:51

1) I think “bearishness” has gone to far and too many shorts here (overcrowded trade). Unless there are company specific reasons that I am not aware off I can’t justirfy why this is trading at much lower multiple vs others.

2) vix or gold pays no dividend but investors still pay to hold them ...

3) I can rephrase the “do you think the dividend is sustainable” to “do you think there are people out there that will continue to trade CFDs when markets are volitile”. Because that’s what it comes down to. The answer is yes btw.

4) The fact that institutionals have increased stakes (recent RNS) tells me that there is some logic to my reasoning.

Been thinking that shorts maybe have hedged by going long after the Q3 results by going long on other names (I.e IG had a good pop recently).

[trulyscrumptious] 04/11/2018 19:03

moneypenny2018. You seem gemmed up on this one, do you think the dividend is sustainable at this level?

[moneypenny2018] 03/11/2018 21:57

Pls make sure you look at the Saxo figures. July 2017 total monthly volume at 336.4m vs July 2018 at 316.2m

There was less volatility this summer. There is a drop for August and September but this has two components 1) ESMA related and 2)Lower volatility.

October volumes are still lower vs last year but significantly higher vs September and August. Agian this increase has two components (increased volatility vs last year and effect from clients moving to professional status vs August and September) I write off Agust because most traders are on holiday so I assume majority of the transition to professional status started during September.

Every business goes through a rump up phase when there is regulatory change or change in business plan. It will take some time for revenue to ramp up to pre ESMA levels, as clients change to professional status, and assuming like for like volatility levels (I.e taking effect of volatility out of the equitation). If you look at the Saxo figures we are already not far from that.

The shorts are assuming a huge effect on revenue vs what we have seen and ignore the ramp up due to shift of clients to professional status.

[moneypenny2018] 02/11/2018 23:09

I went long on Plus back in 2015 when US funds started shoring what was a business I understood well. I went long again before Q3 results and added more on the drop on the announcement date. I am not selling this. I have made my decision and I am sticking to my thesis. I don’t follow your clone comments and I don’t understand the aggression either. If you don’t like what I post you can ignore it or block me.