Stanley Gibbons Share Discussion Threads

[hotmark] 23/10/2009 17:57

Bid coming next week

[ed the business] 10/10/2009 09:35

Postman died before he could sell 2 million-strong stamp collection

[undervaluedassets] 02/10/2009 07:04

been going over balance sheet.

share holder equity has more than doubled from £7 million in 05 million to £16 million today

and there is no long term debt to speak of.

[hotmark] 01/10/2009 22:33

With a major stamp exhibition taking place in London next year.

[undervaluedassets] 30/9/2009 10:02

begun to notice alot of advertising by SGI

there are new offices in Jersey

and the stamp fair this year

new personnel as well

this organization is going through a big push for growth

[hotmark] 16/9/2009 19:50

Called into the Strand shop lunchtime. Plenty of customers. They also have a stand at STAMPEX this week.

[riskblue] 16/9/2009 11:21

Not sure about the predator idea. I don't think the picture has changed dramatically for SGI throughout all the recent turmoil. Still a strong business. The decision to delay writing profit to the bottom line on some of the investment packages was what hit the share price hard. I believe that will be back in for H2 and as a result the business will be marked back up to a fair value - which must be at least £2.00 IMO - DYOR etc

[supreme mo] 15/9/2009 23:29

Still long by a 10a...

[hotmark] 15/9/2009 21:54

Predator about to swallow this one up me thinks.

[moneybags] 11/9/2009 14:45

And I collect rare stamps too......I see my last posting was 20th Nov 07 when I sold above the £2.00 level.

This was one of mine.






Regards , Moneybags

[moneybags] 11/9/2009 14:41

I am back in these today.Not been in these for a while.

Regards , Moneybags

[weemonkey] 11/9/2009 13:58

these are just cheap aren't they.

and look to have been recession proof

[cambium] 09/9/2009 14:45

breaking out

[bookworm1] 22/8/2009 14:37

Chairman many thanks for an excellent reply and a point well made that has sparked off some interesting debate and thoughts.

A colleague who had worked in the textile industry (an industry that experienced massive change) pointed out that even though most of the UK manufacturers had been decimated many of his old colleagues were still making money simply because they retained control of the brand name. The absence of any overheads meant that the royalties that they were earning were greater than any money they used to earn when they were running a factory. It may well that this is a side we keep forgetting and it could well be that the publishing side of the business becomes much greater in the future (note their recent purchase).

I did wonder at one time whether they might venture into coins but I think they have enough on their plate increasing their market share in stamps and autographs.

[plasybryn] 22/8/2009 10:36

Tipped in Shares magazine as a BUY.DYOR

[chairman2] 18/8/2009 18:40

Thanks for the response wcb.

I am not a bookdealer but I do have a number of specialist
collections and without being scientific my 'standard' items
are available for less than 20 years ago. Of course it is
impossible to disentangle the effects of recession (if any);
cnnging taste (a lot)and distribution channels. But..

It stands to reason in any 'market' the costs of bringing
to market and then matching buyers to sellers and vice versa
must have a considerable impact on liquidity turnover and (here
I am on shaky theoretical ground) on price. It depends on
whether you start from an assumption of a thing called perfect
markets and price as the principal determinant of market clearing
balances, or if (like me) you believe markets are imperfect.

The examples you quote of the 'discovery' that there are only
two dealers world-wide who hold item A is a nice anecdote - but it
doesnt cover the whole market picture. It is just as likely that
discovery will show that there are 200 'offers' ww as that there
are two.

The anecdote also presupposes the old model of bookseller - books
in stock - catalogue list as principal marketing tool. Abe is a fabulous
1st generation internet idea using electronic web crawling technology
to exploit the old model in the internet age. But my point is
that the model is changing. Already 2nd generation search engines and
web crawlers can do what bookfinders do for a fee.

What eBay and its ilk does is allow zero stockholding traders to emerge.
Collectors can now wait to pounce on any appearance of an item for
their collection. Only if there are at least two bidders (and often
there is in reality only one buyer) the prices tend to start low
and stay low.

All I can aduce in evidence is in a number of areas I look at there is
an alarming disappearance of bookshops, dealers, and above all stock.

There is probably a fascinating PhD to be written in all of this. I can see within 20 years the electronic auction records being deep enough for
the market to know the location and value almost every copy of the
material that is in fixed known supply (like first editions with dust
wrappers).

I am glad I havent put you or anyone off SGI (that was not my intention)
- if they get the internet right they could really make a big impact.

PS - I quite like the memorabilia bit of the business - if only they
can market that succesfully that could also make a fortune. The product
appeals less to anoraks and more to impulse buys for 'fans' with
an enormous market in what the antiques trade calls 'decorator' items
(Think Hard Rock Cafe).

[eacn] 18/8/2009 07:34

I am in agreement with westcountryboy on antiquarian book values for rarer items.

[jtcod] 17/8/2009 21:42

Nice post Chairman

[westcountryboy] 17/8/2009 20:24

Nowhere, except on the occasional weekends. Old habits die hard...

[masurenguy] 17/8/2009 19:59

another quality post - wcb, where are you on the westcountry map ?

[westcountryboy] 17/8/2009 18:57

Hi Chairman2

Excellent post. I disagree with you on one point. It would be plausible to think that the existence of the internet has driven down second-hand book prices, as you suggest, but in fact that is not the case in my experience (and this is an area I know quite a bit about). Or rather, it depends what sort of market you mean. Naturally if books exist in profusion, as many recent publications do, then the revelation of a global market in them will lower prices. But if you need a second-hand book published 100 or 50 years ago then in fact what the global market place has usually revealed is the scarcity of said books. Dealers can now charge more for them than before. If you are looking for a book and bookfinder or abebooks or amazon reveal that in fact there are only two online booksellers in the world who seem to stock it, then that gives those booksellers a tremendous advantage that they didn't have before. These are not 'rare' books; these are just old books which are now revealed to be quite a bit rarer than people tended to think. A lot of copies may have been printed, but most are not on the market. There is no doubt about inflation in this sector over the last five years.

All this may therefore be good news for Stanley Gibbons. In fact your post has made me think again about SGI because I was on the verge of selling (I had already reduced). I didn't like the recent results and the way that restatements gave the impression of greater growth than in fact had occurred. I don't like the marketing strategy. Like you, I don't like the stock issue on the balance sheet. I also didn't like the picture of Michael Hall in the FT :-) But despite all that I think the slowdown in growth (which is marked over the last two years) is in fact reflected in the current price. So I am tempted to give SGI a bit more time. Thanks.

[chairman2] 17/8/2009 18:01

long term (lock away and forget)

rather like the old collection in
a 'Kong Hakon' Chocolate box, tied up
with string! Must be at least 50 years
since it was opened

[masurenguy] 17/8/2009 17:37

What a really excellent post, incorporating some very good insight. Are you an existing shareholder or are you just evaluating the pros and cons at this stage ?

[chairman2] 17/8/2009 17:17

The serious issue with which Stanley Gibbons is grappling
is the internet.

already eBay must account for something like 25% of trading
in stamps (seen from a UK perspective). Its mostly low value stuff.

but it also includes specialaities - buyers and sellers of the
odder and quirker being far more likely to find themselves online
than via a catalogue dealer.

SGI are dealing with this on a number of fronts. Their overseas
strategy is to get to as many new (rich) clients as they can as
fast as they can (The Christies - Sothebies - Spinks types.)

They are developing not just a new website but are aiming to be
the web trading portal or platfom for stamp trading online - bit
hush hush as they havent even got it launched yet.

SGI are using the web to offload 'low quality' material, so as quietly to
upgrade the quality (value) of their own stock. Everyone concentrates
on the marvellous positive new discoveries that emerge from time to
time - the real bane for a dealer is the vast surplus of badly kept,
badly stored, or damaged material that 'Good customers' present every day.
Its difficult to tell someone who is slavering over the SGI-30 index
that what they paid 100 for, and think is worth 350, is probably only
'worth' 20 because of 'condition' and the way they have treated it -
something as simple as the wrong type of glue on a stamp hinge can
'ruin' a stamp value.

These considerations are directly comparable to the antiquarian book trade.

The impact of the web on antiquarian books has been dramatic. In all but
the very top high-value rarities web trading has driven down prices and
the value of dealers' stocks. Secondhand English language books is now a
completely global marketplace linked by the web. You want a particular
edition of a favorite book? In the past you scoured 20-30 dealers, often
for years, till you found it listed. Now you post on the web abd will
have 20 offers from all over the globe but most likely from remote
corners like deepest South Island New Zealand to Nova Scotia and your pick
in a week. The only bugbear? Condition. - And to real collectors (in it for
the money as well as the collection)condition is totally critical to value. And it takes an expert to collate a book properly, judge whatever 'slight foxing' means and lay down the law on the state of the book.

Stamps are exactly the same.

All this I see is well appreciated by SGI. These guys know what they are
doing. Whether they can succeed business wise in riding the trends is
a more open question - but that is the essence of capitalism.

The only thing that continues to worry me is balance sheet.

SGI - it seems to me -are still trying to follow the old De Beers diamond market model of being the holder of stock and controller of 'supply' to the market. De Beers has been beaten in diamonds and they had 60% of the market.
SGI has less than 10% of the global stamps market - so I just cant see it.

But holding stock is critical to the existing (pre-internet) business
model. Its the essence of the SGI-customer interface at all levels
but especially credit sales and buying back product. This in turn makes
the cash side of the balance sheet a very very tricky bit of the business
to evaluate - a problem since its what gets certain investors most
switched onto SGI in the first place. Cash accounting - stock values -
credit sales - are all pretty complex issues - to which SGI has given
reasonably reassuring answers so far. But longer term the value of stock-holding and cash in the internet trading model is a key issue for the group.