Warpaint London Share Discussion Threads

[villarich] 03/7/2024 12:29

Reads like an AI article.

[rar100] 03/7/2024 11:29

Simply Wall Street article on W7L yesterday, worth reading the whole thing and take it where you will.

Despite an already strong run, Warpaint London PLC (LON:W7L) shares have been powering on, with a gain of 27% in the last thirty days. The annual gain comes to 135% following the latest surge, making investors sit up and take notice.
Since its price has surged higher, Warpaint London may be sending very bearish signals at the moment with a price-to-earnings (or "P/E") ratio of 35.7x, since almost half of all companies in the United Kingdom have P/E ratios under 16x and even P/E's lower than 9x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so lofty.
Recent times have been advantageous for Warpaint London as its earnings have been rising faster than most other companies. It seems that many are expecting the strong earnings performance to persist, which has raised the P/E. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
See our latest analysis for Warpaint London
AIM:W7L Price to Earnings Ratio vs Industry July 2nd 2024Want the full picture on analyst estimates for the company? Then our free report on Warpaint London will help you uncover what's on the horizon.
What Are Growth Metrics Telling Us About The High P/E?
In order to justify its P/E ratio, Warpaint London would need to produce outstanding growth well in excess of the market.
Retrospectively, the last year delivered an exceptional 122% gain to the company's bottom line. Still, EPS has barely risen at all from three years ago in total, which is not ideal. Therefore, it's fair to say that earnings growth has been inconsistent recently for the company.
Turning to the outlook, the next three years should generate growth of 17% each year as estimated by the three analysts watching the company. That's shaping up to be materially higher than the 15% each year growth forecast for the broader market.
With this information, we can see why Warpaint London is trading at such a high P/E compared to the market. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
The Final Word
The strong share price surge has got Warpaint London's P/E rushing to great heights as well. It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
We've established that Warpaint London maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. Unless these conditions change, they will continue to provide strong support to the share price.
Having said that, be aware Warpaint London is showing 1 warning sign in our investment analysis, you should know about.

[qsmeily456] 03/7/2024 10:00

Brilliant 🩳🩳🩳👍8745;

[cu5hty] 03/7/2024 09:45

NASDAQ chart doesn't seem to be showing any signs of slowing down, arguably the opposite, it's going higher.

[sogoesit] 03/7/2024 09:42

Makes sense.
I am a TA and Momentum investor (Stock Picker).
The QQQ, and S&P 500 driven by Big Tech, is at a high on an upper parallel trend line with the long term 16%pa returns.
If it breaks that trend line to the Upside we could be off to the races. All depends on productivity gains from AI being demonstrated main stream.
We are in a Presidential election year so short term could be choppy but, long term, political effects not much on US Markets.
If there is a break down and sell-off then the Downside wins.

These last two years I have been playing TA Break-outs and they have worked well.
But always wait for confirmation, in TA trading leastwise.

Just a note on "rebalancing" tactics, which I don't do, but Nvidia is 15% of my Invested Capital and is now 32% of Valuation (Paper) Portfolio. I am still accumulating and may take it to 17.50% invested capital but I have maxed out on my exposure rules for the time being.
I view Profits as a margin of safety rather than risk of capital loss. The Profits of the Nvidia position are at risk but the Capital is not and, so long as the position shows a running CAGR greater than my benchmark, unless other opportunities are better, then it's a keeper.

[villarich] 03/7/2024 09:40

It's by far my best 'long term' investment. My average unit price is 36p and it's currently at 171.5p. It's one of those where you wish you could go back in time and put everything into it and retire early!

[villarich] 03/7/2024 09:35

Thanks both for your thoughts and opinions. I like the context of opportunity cost / gain and if there are 'better' opportunities to invest in at the moment. I also like the concept of strategic versus tactical trades. I'm very much in the tactical camp ie I'll react to a change in the story of a share / fund / sector, rather than try to anticipate one. At the moment I don't see a correction in the tech sector, but I am becoming more wary of it, probably more to do with my exposure to it rather than it being more likely.To that end, I'm probably going to let it run for now but be extra sensitive to anything that smells bad in tech.

[sogoesit] 03/7/2024 09:33

Yes, 5x between 2015 and 2024 is a CAGR of about ... whoops let me check.... 20%.

My high risk tech benchmark is QQQ which, over the recent long term, is compounding returns at 16%pa. (SOXX is compounding at approximate similar rate).

[3ootuk] 03/7/2024 09:20

Up 400% is pretty staggering, but tech has been super hot over the last couple of years.
If you feel you're overweight then I would look at Trustnet to filter funds that show above average performance.
Personally I think defense/electronics will keep going as there's a massive new threat from drones and electronic warfare with Europe rearming and feeding Ukraine/Israel.

[sogoesit] 03/7/2024 09:14

Haha... maybe the best of the worst more appropriate in my case...
For transparency, I make money in a portfolio, beating the market, on a discrete stock pick Win/Lose rate of 45%/55%.

Selling; always the most difficult of decisions!

My rules:
- Pareto effect says 80% gains come from 20% of investments (in my case sometimes 90/10); therefore

- Run Winners, Sell Losers;

- If any investment is compounding at more than benchmark (or market) returns it's a keeper in the portfolio; therefore (being happy, not greedy), beating one's benchmark)...

- I don't "rebalance" (I measure portfolio exposure by Invested Capital not by Valuation (paper) Capital);

- Selling a position implies I have a better Opportunity to place the money, risk/return wise, elsewhere otherwise selling the position will mean I suffer an Opportunity Cost if I sell (applies especially to "Take Profits", "Top Slice" mentality); therefore

- What is that Opportunity Cost against the Opportunity Gain?

- On the above "thinking" a decision can be made, it is measurable (for future learning) and rational not emotional.

I think that's it... but I'm sure to have missed something...

Reminder "any (future) correction in the tech sector" is speculation about the unknowable future. But, if that is a term view that you have then the whole position should be sold and invested in a different risk/return investment in the portfolio. It's a Strategic decision not a Tactical (positional) decision always mindful of opportunity costs versus gains.

AIMV

[villarich] 03/7/2024 08:56

Off topic but given the best of the best are on this board I thought I'd seek opinion...When I started managing my SIPP in 2015, I put funds into the L&G Global Tech fund. I've regularly added to the position but never sold. I'm now at the point where the investment is up nearly 400% and it represents 20% of my SIPP value. Clearly hold and wait has worked but I'm starting to think what's next. I don't have any strict rules about how big a position can be, I like to let my winners run but I am also conscious that any correction in the tech sector could have an impact on the value of my SIPP.I'm still 15 years away from accessing it so have a risk on mindset.I welcome your thoughts on what I should do with it...

[villarich] 02/7/2024 16:54

Your last published short was at 588 ??How's the short at 418 doing?

[qsmeily456] 02/7/2024 14:02

🩳🩳🩳🛩9315;🤣ԍ15;

[johndoe23] 02/7/2024 10:44

Some large delayed trades, look like buys

[cu5hty] 02/7/2024 08:34

Tight spread640/641.4At 0833

[pyglet] 01/7/2024 22:20

They like it. They say it's brilliant for the price.

[davr0s] 01/7/2024 21:21

So I'm curious.... What do you do with the information if the feedback is it's good/ok/ rubbish?

[stamford hill] 01/7/2024 21:03

Hi Pyglet. What's there opinion of it? Quality, price etc?

[pyglet] 01/7/2024 20:49

Both my girls have heard of it and both produced some this evening. Amazon are selling it now

[stamford hill] 01/7/2024 20:03

Maybe I'll ask again but this time whether her male friends have heard of the brand. That's another market in itself ;)

[johndoe23] 01/7/2024 19:40

Interesting Stamford. I asked my gf and and some of my work colleagues and none of them had heard of it either...

[stamford hill] 01/7/2024 18:56

I asked my work colleague to ask his girlfriend (fresh out of University) and all her friends which she has many whether they had heard of the brand. None of them had. I take that as a huge positive. Growing as they are organically without any advertising..

[davr0s] 01/7/2024 18:37

Indeed - the hard part psychologically is hanging onto it.... but I know my exit point if it's required

[stamford hill] 01/7/2024 18:27

This beauty (pardon the pun) will be entering the FTSE 250 in September if this rise continues..