Team Internet Share Discussion Threads

[adamb1978] 11/10/2023 08:00

Hi Rivaldo

Thanks for flagging that. They've done this before - sneaking in a (positive) trading statement half way through what looks like an administrateive type announcement. It's not a negative, but they would get far more benefit from being clearer - either putting it in a separate update, or first para etc.

Great that its trading in-line, or likely better than expectations though!

Adam

[cyberbub] 11/10/2023 07:51

Let's hope so. Even when you can get 5% risk-free these days, a p/e of 7 is a return of 14%. Who wouldn't want to buy that?

[rivaldo] 11/10/2023 07:26

An anodyne RNS headline today, confirming the 9 months' results will be on 13th November - except that there's also the extremely reassuring comment that:

"The Directors remain confident that the Company continues to trade at least in line with current market expectations for the full year"

Note the "at least" in line with expectations.

So once again CNIC has confirmed it's trading well. Perhaps this time - on a P/E of around 7 - the market will respond:

[adamb1978] 10/10/2023 18:50

No problem. The shares held in Treasury can indeed be issued back at whatever price the recipient of them takes them at - hopefully the market price!

You're right in thats why companies keep them in treasury - administratively easier, particularly for small amounts like option satisfaction etc.

There's a cap (10% from memory) for the amount you can have in treasury, so TIG/CNIC will have to start cancelling them at some point next year, assuming they go again after this £30m

[cyberbub] 10/10/2023 12:02

Yes indeed, sorry I probably wasn't being very clear. I don't think I've ever held a company with an active buyback programme underway.What do you think of my scenario (b) where the company could sell the shares back to the market (or a single strategic buyer) at a higher price?In any case it seems much more sensible to keep bought back shares in the treasury than cancel them. Treasury shares gives more flexibility and options IMO. If so, why does any company cancel bought-back shares?

[adamb1978] 10/10/2023 10:59

Cyberbub - I'm not sure thats right. If an acuqiror makes an offer, then they'd acquire your and my shares. In doing do, they own all the outstanding shares. If the company owns shares in treasury, then you or I dont get any more cash. We get the benefit pre-offer - the market cap of the company is divided by fewer shares, so the share price is higher.

[cyberbub] 10/10/2023 10:40

The good news is that the bought-back shares are being kept in 'treasury' rather than cancelled. So if and when a bigger fish comes looking for a meal, they will have to pay for those too. Or if the share price hits say 200p by itself, the treasury shares could be dribbled out to raise more money for the company's expansion (or a special divi from the profits of buying at 120-130p and selling at 200p).

[adamb1978] 10/10/2023 08:51

Looking forward to the Q3 results in a couple weeks time.

Market expectations are for 20.6c EPS so around 16.5p, so on a PE of around 7x.

Need to just keep focussing on cash and margin improvement and the price should eventually recover on its own. If it doesnt, then keep using the cashflow to buyback more and more shares

[adamb1978] 09/10/2023 20:21

Could well be that the price doesnt do anything meaningful til the 2023 results are out. Lots of investors are lazy and will look at last reported figures, rather than doing any sort of analysis or applying thought.

If they can reported anything close to market expectations of high single digit turnover growth, then the multiple will look very cheap. Buying back piles of shares at these evels is great value for the compayn

[cyberbub] 09/10/2023 19:14

Little bit of a recovery at the end of the session but it's too early to call a bottom, let's see the next couple of sessions.

[ggrantsu] 09/10/2023 14:41

this is just torrid

[doobz] 09/10/2023 14:25

As in they've been undervalued for a fairly long time now

Also chart looks like heading back to its low 100s, sad and surprising to see again

[cyberbub] 09/10/2023 11:48

What do you mean "getting on a bit"?

[doobz] 09/10/2023 10:59

The longer they remain this undervalued the more likely a bid is becoming. Its getting on a bit now as well

[adamb1978] 08/10/2023 11:02

"Right now, with relatively low volumes nervous holders of any equities are dragging lots of stocks lower despite their performance."

I think that's certainly true currently diesel and you can see it in many companies. The other big factor currently is that whilst investors can make 5%+ risk free, a certain proportion of them will shun smallcaps as they'll view the 5% being better on a risk adjusted basis. This competition should gradually ease over coming months though.

Going back further, CNIC/TIG's problems IMO were (i) the volume of acquisitions made it hard to see what the true run-rate performance was and (ii) somewhat linked, the business being cashflow negative. These two things are now in the past though, but it takes a little while to jettison negative perceptions and they just need to keep churning out quarter after quarter of good figures and lots of cash.

Some people won't like the model, but its hard to argue with cash and its that which I think will drive the price higher

[ggrantsu] 08/10/2023 10:57

I wonder a lot about a potential sale process here...with the OP part going to a larger industry player like GoDaddy...TIG basically specialise in all the areas that GoDaddy/other large players don't. It's also a highly scalable business which could see a lot of cost efficiencies realised.

OM is harder to envisage a buyer for...the most obvious one in my mind is Google itself!

[cyberbub] 08/10/2023 10:55

As a relatively new holder, is TIG trying to diversify and reduce reliance on Google?

[diesel] 08/10/2023 10:40

If I may add…it’s understandable to be considering all factors that are holding this back. Despite efforts made to increase shareholder value with buybacks and divvies we are unable to sustain any increase. I’m not convinced this is due to a ‘big’ seller, the chart for the last couple of years would indicate we have had many sell offs and yet the big buyers have far outweighed the sellers. Right now, with relatively low volumes nervous holders of any equities are dragging lots of stocks lower despite their performance.

[adamb1978] 08/10/2023 09:12

Fair point ggrantsu. There's threats/risks to any business though and, whilst easy to come up, its virtually impossible to say they won't happen....and if you get hung up on them they you wouldnt invest in anything!

The great thing about TIG/CNIC is the cash which its throwing off, whilst still growing too. You dont get that combination very often

[ggrantsu] 07/10/2023 20:23

Adam I agree with what you’ve said - I don’t see the risk as being google trying to eat their lunch and screw them. The risk is that the digital ad is highly fluid and something else could come along which google view as favourable vs TONIC and centralnic. The risk is that google hold all the cards contractually and could let them go…unlikely but there you go.

[cyberbub] 07/10/2023 20:15

Just been looking at another company GATC, different sector but they are running a daily share buyback of roughly the same %age of the company as TIG. Their share price chart over the last few weeks looks almost identical to TIG, two peaks and then a plummet the last few days. Seems to support the idea that there is some general selling overwhelming both buybacks, due to weak markets, and there's not something specific at TIG?

[adamb1978] 07/10/2023 16:36

It amazes me sometimes that people worry about BigUglyMegaCo (google, amazon or whoever) might deliberately do something to kill off a tiny co. Google and those others are only interested in things which generate billions of revenue. They wont care remotely about TIG and the pennies which they pick up

[ggrantsu] 07/10/2023 16:31

apologies - didn't mean to sound sarcy. in terms of google...for people who didn't get to the CMD and/or asked company about it further...I have garnered as much colour as I can on it:

the contract has been live for 10 years now...which at the very least demonstrates google are very satisfied. it is renewed every 2/3 years which is also very encouraging. the company also said that they are the only player in the space with any kind of agreement like this with google...

altogether...there is tail risk, but quite frankly it really does seem tail risk like in the true sense of the word. they make a lot of money for google and clearly service to them a high standard.

[adamb1978] 07/10/2023 12:45

"Tail risk" means a very low probability event. Relates to a normal distribution curve and the very narrow bits at the end

[cyberbub] 07/10/2023 12:10

Yes I'm aware of that but hadn't heard the term "tail risk" before. So it essentially means "over concentration".