Team Internet Share Discussion Threads

[adamb1978] 24/1/2024 18:53

Yes, some nice resilience in the last few days/weeks.At some point the buyback was going to exhaust all the people willing to sell at say 120p or 125p and push the price higher.Maybe we've reached that point?Looking forward to the figures on Monday

[azaman] 24/1/2024 18:06

I will go a little further and say, you can't keep a good stock down; can you ?

[robsy2] 24/1/2024 17:50

Dare I say it , the share price is making some progress....

[adamb1978] 19/1/2024 09:24

Agree boadicea. Its mopped up a pile of shares from weak holders

[boadicea] 19/1/2024 08:34

Mark W-M is rather disparaging of the share buy-back programme. My own view is that has been a profitable use of the company's resources as it enhances its eps. He ignores what the share price might have been without it while also failing to remember that it has in fact started to pay a modest dividend.

[tole] 18/1/2024 18:05

https://masterinvestor.co.uk/equities/is-the-price-decline-about-to-stop/Is The Price Decline About To Stop?By Mark Watson-Mitchell 18 January 2024 7 mins. to readIs The Price Decline About To Stop?Considering its massive store of recurring revenues, its global services on offer and its incredible potential, Team Internet Group (LON:TIG) has been a dismal performer over the last year. This time last year the group's shares were trading at around 155p, since when they have been down to as low as 112p. Today they are fractionally better at 124.60p – but could they be offering an excellent upside, especially if you follow the dealings of 'insiders' in the group's equity. The Business The group creates meaningful and successful connections from businesses to domains, brands to consumers, publishers to advertisers, enabling everyone to realise their digital ambitions. It is a leading global internet solutions company that operates in two highly attractive markets: high-growth digital advertising (Online Marketing segment) and domain name management solutions (Online Presence segment). The company's Online Marketing segment creates privacy-safe and AI-generated online consumer journeys that convert general interest online media users into confident high conviction consumers through advertorial and review websites. The Online Presence segment is a critical constituent of the global online presence and productivity tool ecosystem, where the company serves as the primary distribution channel for a wide range of digital products. The company's high-quality earnings come from subscription recurring revenues in the Online Presence segment and revenue share on rolling utility-style contracts in the Online Marketing segment. Sales By Business And Region In the group's 2022 trading year it turned over $728.2m. The Online Marketing side was some 78.9% of the total, while Online Presence represented 21.1%. Europe accounted for 83.5% of the total, North America 9.0%, Rest of the World was 6.5%, while the UK was just 1.0%. Share Buybacks Not Helpful On 30th December 2022 it commenced its first £4m Share Buyback programme, for a maximum 28,866,000 shares, or 10% of the equity. That spend was completed on 18th January last year. On 15th May it announced another £4m programme: "The Board considers the Buyback Programme to be in the best interests of all shareholders, given the cash generative nature of the business and the performance at least in line with current market expectations. It reflects the Group's renewed capital allocation policy geared towards greater returns to shareholders." On 3rd July the group announced a material £30m increase to that second programme, since when the company has been spending around £100,000 a day on buying its stock back, for either being cancelled or being held in 'Treasury' to be used for any future acquisition. It is now close to completing that increased 'Share Buyback Programme' – which has actually enriched no-one other than the brokers handling the business each day. As of yesterday morning, it is noted that the group had repurchased a total of 23,279,377 of its shares. Compared to a previous average dealing volume of around 400,000 shares being transacted daily, there now seems to be a sudden build-up of interest in the company. In the first twelve trading days of this month some 9,983,149 shares changed hands. Perhaps we should now be paying the group some attention. Trading Update Due Before The End Of The Month This international internet solutions company, which rebranded itself from CentralNic last September, is due to be announcing on Monday 29th January a 'comprehensive' Trading Update covering its 2023 financial year. Already TIG is clearly stating that the Update will feature its record performance in the final quarter of last year and for the full year too. Brokers' View Analysts Bob Liao and Carl Smith at Zeus Capital consider that the group is capable of 'outperformance' following a good final quarter. Their estimates are for revenues for the year to end December 2023 to have grown from $728.2m to $825.3m, lifting adjusted pre-tax profits to $79.2m ($70.0m) and earnings up to 21.3c (20.0c) per share. For the year now underway they look for $868.9m turnover, $84.7m profits and 25.1c in earnings per share. In an early October Tech Sector Review, analyst Michael Hill at Cavendish Capital had a 350p Price Objective on the shares, looking for the group's strong growth to be powered by its Online Marketing business. His estimates for 2023 were for $815.3m revenues, $79.8m profits and 22.4c per share in earnings. For this year he goes for $888.8m revenues, $91.1m profits and 24.4c per share in earnings. Over at Edison Investment Research, analyst Max Hayes has put out estimates that the group in 2023 will have turned over $833.7m, with profits of $80.7m, and earnings of 21.1c per share. For the current year his figures indicate $909.6m sale, $89.3m profits and earnings of 24.7c per share. Edison considers that the rating of the group's shares does not fully reflect the impact of the share buybacks and its growth prospects. Max Risk PlaysFormer army officer and stockbroker, Max Royde has been back into the market again this year, picking up TIG stock. 51-year-old Royde, who established Kestrel Investment Partners with Oliver Scott way back in 2009, was previously a Managing Director at brokers Peel Hunt, where he focussed upon the Technology sector. Kestrel is a very interesting business in itself.Together with their colleagues, Scott and Royde source the best investment ideas and structure the most suitable vehicles for new investments, whilst also driving the strategic improvement at investee companies, both as a minority investor and board member. Kestrel aims to achieve long-term capital appreciation by investing in a concentrated portfolio of quoted small and micro-cap companies. Each of its core investment holdings meet strict investment criteria. The strategy is to identify, access and invest in companies that are undervalued and offer significant growth potential. It then works closely with management teams to unlock latent value and deliver long-term capital growth and liquidity. Royde, who was a director of Gresham Technologies and Aferian, holds a number of board positions, including IQGeo Group which on Monday of this week guided results ahead of expectations, with its shares soaring in response. Back Into The Market, Follow The 'Insiders' After a near two-month break in its dealing activity, on behalf of discretionary client accounts, Kestrel Partners has this month acquired more shares. Kestrel Opportunities, in which Royde has a beneficial interest, now holds 17,926,535 shares in TIG. Together with the 48,876,324 shares that Kestrel clients hold in the internet company, that adds up to a significant stake of 66,802,859 shares, representing 25.12% of its equity. Oh, and by the way, since 2021 Max Royde has also been a non-executive director of Team Internet Group, so we should perhaps pay attention to his market movements, especially ahead of the Trading Update at the end of this month. The Equity There are around 265,380,707 shares in issue, apart from those 23,279,377 shares held in Treasury. Amongst the larger holders Kestrel Partners is the biggest (25.12%), while others include Inter.services (12.01%), Slate Investments (9.54%), Erin Invest & Finance (5.20%), Chelverton Asset Management ((4.60%), Schroder Investment Management (4.28%), Maitland Asset Management (4.26%), CentralNic Employee Benefit Trust (4.23%), JTC (Private Banking) (3.81%) and Herald Investment Management (2.79%). My View – Setting A New Target Price For The Shares Yes, I have been really disappointed with this 'money machine' and its share price performance over the last year but I have not, yet, given up hope that it will recover its upward path. As for the reason of the share buyback programmes, as a way to give greater returns to group shareholders – well I have not seen any evidence of that happening over the last year, especially with the shares being down 28% at one stage and off over 19% in that time frame and still no dividend from the cash generative business. The shares closed last night at 124.60p, at which level the company is valued at £331m. Trading on a mere 6.82 times estimated historic and on just a multiple of 5.79 for current year earnings, these shares represent an excellent participant in any growth 'undervalue' portfolio. The 'comprehensive' Trading Update on Monday 29th January could well prove a significant turning point for the group's shares, which hopefully will see the market giving it a far, far better rating. In the hope that good news could be forthcoming, I am now setting a new Target Price for the shares of 156p in 2024, while having a certain confidence that a major re-rating could help to boost them to well over the 200p level before the year is out.

[adamb1978] 16/1/2024 13:44

Azaman - good spot if so. Could either be TIG trying to eek out the limit to the next AGM, or perhaps they set some price threshold for the brokers at which levle they wanted it reduced?

[adamb1978] 16/1/2024 13:43

1watty - if they were selling that many shares, it'd have been picked up in RNS announcements.

[azaman] 16/1/2024 13:09

Have you noticed, that the buyback volume is decreasing?

[1watty] 16/1/2024 12:58

About 6 months' ago on the CNIC BB, it was mentioned that there was a large seller and it was felt that the seller held 30+m shares at the time. I seem to recall that it was said that the seller was intending to withdraw all his shareholding over a period of time for another business venture. Since that time there seem to have been many withdrawals at any price holding the share price down. Obviously, I do not know if the withdrawals have been made by the seller referred to nor do I know how many shares the seller has now or what his future intentions are which I feel, might be having some inpact on the share price.

[muffster] 16/1/2024 12:52

Simply Wall Street has this at a PE of 78.Any thoughts?

[azaman] 16/1/2024 12:41

You can't keep a good stock down.

[adamb1978] 16/1/2024 12:13

Yes boadicea - back into the upper part of the 115p-130p range which its been stuck for the last 9 months, despite greater focus on cash generation and shareholder returns.

At some point the share buyback will pull the price out of the range.

If you were able to look at shareholders behind any company on the market, then you would find x% of shareholders would sell between a pence and b pence, y% of shareholders would sell between c pence and d pence, etc...

Therefore a sustained, large (relative to the company) buyback will at some point exhaust all the sellers in a given range and the buyback will have to pay more.

I thought we'd have pulled out of this range by now, but obviously impossible to know what volumes of buyback in $m is needed to clear this range

[erbullion] 16/1/2024 11:58

Trading update 29th January

[boadicea] 16/1/2024 11:53

A 3 month high this morning - might be worth mentioning.
How many sellers will it attract and will it hold till close?

[adamb1978] 09/1/2024 16:26

You bought back in recently grantsu? So a complex business model, but one which you're comfortable investing in.

As discussed before, I apply a large amount of deliberate strategic ignorance given that I've seen when working in listed companies before how wrong external professional and amateur analysts can be about the +ves and -ves about a company.

Hence why I generally focus on fundamentals

[elsa7878] 09/1/2024 15:06

If their best ever quarter includes improved margins then that would be especially encouraging.
Definitely interesting that Kestrel / Royde keep buying. He is an insider so unless he's lost the plot he MUST know what's happening under the hood.

[adamb1978] 09/1/2024 13:57

Possibly just portfolio level exposure

[azaman] 09/1/2024 12:19

I am wondering why doesn't Kestrel buy more at this price ?

[rivaldo] 09/1/2024 11:44

Good to see Kestrel buying almost another £100k of shares. They're now up to 25.09% of CNIC - hopefully they'll keep buying up to 29.99% and help clear out whoever's doing this selling which has to stop at some point:

[diesel] 08/1/2024 21:37

Unusual for a company to issue a trading update within the notice of timing of the trading update! It was said by the previous CEO that the biggest risk he saw was a takeover approach, maybe that thought persists at these valuations.

[adamb1978] 08/1/2024 20:31

Just had their 9 mo figures up on screen as I was checking my model. Need to focus on what the run-rate w/cap is so that you can understand what to typically expect.

Operating c/f for the first 9 months was $50.2m which if you add back w/cap of 9.2 gets you to normalised operating c/f of 59.4.

Capex incl intangible spend is (8.4) so pre-financing cflow is $51m.

Then there's c.$10m of leases and interest costs, which leaves you with $40m normalised cashflow for 9 months before discretionary things like M&A, divis, buybacks etc.

That's a lot of cashflow for a £300m market cap business...and it was just 9 months.

They've put a high hurdle on M&A now so, aside from deferred consideration, thats a lot of cash for shareholder returns or debt reduction.

[elsa7878] 08/1/2024 19:51

Can anyone actually show me the free cashflow they generate that they keep referring to....that is what will lead to a re-rating. If they can demonstrate it at the end of January then perhaps they will get the recognition they crave.

[adamb1978] 08/1/2024 18:05

"What I don't understand is, that, since the price is lower than what the buyback program will allow, why not buy more at this price?"

Not TIG making the decisions. They'll have told their broker that they want to spend $30m over a given period and their broker executes it as they see fit

TIG will have burned through the authorisation from shareholders by Feb/Mar, and then they'll request a new authority at the next AGM and start again.