Stanley Gibbons Share Discussion Threads

[jtcod] 22/4/2008 14:50

Wish I could pick some up at 176p. ;-)

[tom.muir] 22/4/2008 13:23

They got a lousy price for them too - 176p

[cockneyrebel] 22/4/2008 12:29

Looks like European Small Caps have sold their entire stake - probably the reason these haven't moved imo.

Firming on L2 too :-)

CR

[cockneyrebel] 22/4/2008 12:26

Huge stock overhang clearing by the look of it - desperate fund needing cash?

Might be what this needs to get it moving north.

CR

[hywel] 22/4/2008 11:37

Welcome back CR! :-)

I agree a very good trading update.

[cockneyrebel] 22/4/2008 11:31

Bought back in on that T/S

Online sales soaring 60%. Alternative investment and internet retailer growth rate :-)

Chart looks like it's due to turn up here too imo.

CR

[trigger45] 16/4/2008 17:50

Thanks Liarspoker

[jtcod] 16/4/2008 10:24

Thats a good strategy Liars. It goes with their 'leading brand name' also.

[liarspoker] 16/4/2008 08:29

SGI are concentrating on the upper end of the market these days as that equals less volume for higher income.

[trigger45] 16/4/2008 07:52

I take it by your response those days are long gone then. lol

Just trying to find out if they are still trading at the lower end of the market.

[mr.oz] 16/4/2008 07:45

Gosh , I remember those days.. as a child, when you could trust and be trusted.

[trigger45] 16/4/2008 07:37

Apologies for what seems a stupid question, but... I remember a long time ago you could get stamps on approval from SG, decide which ones you wanted to buy, and then return the rest with your payment?

It was at the low end of the stamp collecting chain, but you have to start somewhere. Having looked at the website I can't find anything along those lines.

Do they still offer this service, but not online, or is it just the higher end of the market they are concentrating on?

Good luck to all holders.

[orange1] 15/4/2008 21:01

Thanks for the explanation Bookworm1.

[orange1] 15/4/2008 21:01

Thanks for the explanation Bookworm1.

[levr] 14/4/2008 17:21

Last week's Investors Chronicle column by Alistair Blair makes interesting reading (Hale Yale, www.investorschronicle.co.uk/Columnists/NoFreeLunch/). It focuses on the lessons offered by David Swenson, long term high performing manager of the Yale University Endowment.

Of note is Mr. Swenson's embracing of illiquid investments as a good thing, providing you have long horizons, because of the long term outperformance on offer. It struck me that rare stamp collecting is a reasonable example of this approach.

[bookworm1] 12/4/2008 14:05

Orange1 - 4 Apr'08 - 14:14 - 131 of 144
bookworm - Can you explain how SG can offer a guaranteed return at very little cost to itself? If prices go up by 1% instead of the guaranteed 5% then haven't SG lost 4%?

Sorry Orange1 just noticed that I didn't get round to answering your question.

Yes you are right if prices only go up by 1% instead of the guaranteed 5% then SG have lost 4%.

This is what the provision in note 20 of the accounts is for "any difference between the guaranteed return and the underlying value of the portfolio". The interesting thing to note about the provision this year is that the amount provided for this year was lower than the amount provided for last year despite an increase in sales. The total provision currently stands at £300k being 1.4% of total sales (2006 1% of total sales) although it would be helpful to know what the level of sales were under the minimum guarantee scheme.

However although others believe that this is an additional (& unnecessary?) risk for the company to take on board I am fairly relaxed about it for the following reasons;

The company will have set a rate that can always in its opinion be bettered.

Stamp prices have shown a 9.5% increase per annum over the past 50 years.


The guaranteed minimum return is based on a simple interest return. A five year investment of £5,000 invested over 5 years is guaranteed £250 per annum giving a total return of £6,250). On a compound basis this equates to an average annual return of 4.6% over five years compared to the average annual increase in stamp prices over 50 years.

The guarantee covers the whole period of the investment so although prices may rise and fall in any given year the average return over the life of the investment is unlikley to fall below the guaranteed minimum unless exceptional circumstances prevail and that amount is already fully provided for in the accounts. So there are no hidden surprises waiting (unlike stocks in the banking sector).

"while low-value stamps could be susceptible, rare stamp values were resilient to economic downturns" Mike Hall, chief executive of Stanley Gibbons.


IMO I see the guaranteed minimum return as a way of encouraging more customers to invest in stamps as an alternative investment. There are also other tax free incentives and savings that the company can offer which can make investing in stamps a very attractive proposition.

The company wins because it is currently generating a return on capital of 33%. The more it can boost sales the more it can invest in high value stamps which can then be sold to its customers. Many companies make provisions in excess of 2.5% just to cover bad debt provisions. Stanley Gibbons does not have a bad debt problem and the 'guaranteed minimum return' provision is a bit like an insurance contingency fund that it is investing in and enabling it to increase its sales.

Hope that helps.
Regards

[romi2nikki1] 08/4/2008 10:39

I use Barclays as first port of call for data, and my eyebrows have been raised on several occasions. They even sometimes fail to post RNS. Seymour are still the brokers, and they last issued revised (slightly upwards) guidance after the 07 results. Insofar as I can check, Seymour only update eps guidance for SGI once a year.

So probably v disturbing mistake at barclays.

[bookworm1] 07/4/2008 12:49

A flat eps forecast for 2008 is too prudent and too savage for SGI. Maybe they have changed analysts or something but the forecast on Digital Look is still showing a 38% growth for 2009 and the management reported that they were confident about maintaining existing growth. There has been nothing to suggest that this has changed unless the brokers think that the company is going to make an aquisition this year. IMO the broker forecast is wrong because it assumes no growth in sales and no Guernsey Corporation Tax benefit. They will be forced to revise this upwards before the half year results are announced.

[romi2nikki1] 07/4/2008 10:59

Are Seymour the only brokers that cover this stock? I ask because the broker forecasts on Barclays for 08, have been cut to flat eps growth. TDW are showing no change, and I believe are more reliable than Barclays.

[bookworm1] 05/4/2008 16:14

and (according to some employees of a company that supplied his old school) learnt his kicking skills on their vending machines..

[potem] 05/4/2008 00:11

Didn`t he learn his spelling technique in Everton? That obviously exlains it, I suppose.

[tom.muir] 04/4/2008 20:55

sorry about that but as a cynical old Everton supporter I couldn't resist it. :-)