Investment research into UK Stocks by Walbrock Research

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Old Mar 6, 2017, 2:10pm   #1
 
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Investment research into UK Stocks by Walbrock Research

A look in the life of individual stocks of UK-Listed companies. So, stay tune.
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Old Mar 7, 2017, 11:11am   #2
 
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Can RIGHTMOVE PLC (LSE: RMV) gives us clues in looking for great businesses?

Walbrock Research started this thread Rightmove's business model is successful as long as they see rising house prices in the UK. And that has been the case in the past eight years. Since then, RIGHTMOVE was able to:

1. Raise advertising fees from £117pcm in 2004 to £830pcm today, an annual compound rate of 17.7%. Meanwhile, UK House prices compounded at 3.9%/annum, or a total of 58% in that same period.

2. Cash operating margins increase to 60% from 30%, a decade ago.

3. It accounts for 70% of the UK property internet portal driving 11.7bn visits with visitors spending 1bn minutes per month on their website.

The Economics of RIGHTMOVE (and ZOOPLA)

A typical fee one estate agent makes is between 1% and 3% of the property value sold. So, typically a property value of £250,000 gives the estate agentís £2,500 to £7,500 in fees. I can hear the thoughts on your mind telling me this:
£842/month multiply by 12 = £10,104 of fees to RIGHTMOVE.
Remember, property transaction is a volume business. The UK does over 100,000 property transaction per month, or over 1.2m transactions per year, also there are 157,000 estate agents. So, one estate agent (on average) sells 7 or 8 properties per year. In total, an estate agent makes around £17,500 to £52,500 in properties transaction.

If you want to know more, please go to my website.
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Old Mar 9, 2017, 6:02pm   #3
 
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Carpetright PLC to target £4/share soon

Walbrock Research started this thread Management attitude of conserving cash and refreshing storesí format is the right strategy for the turnaround of its business. Also, I get the sense Carpetright wants to emulate WH Smith by focusing on margins improvement while stemming the decline in sales.

However, the share price of Carpetright PLC seemed less enthusiastic, despite the return to profits (making £14m per annum) and reduction of debt (£7m in borrowings from £105m, six years ago).

The interesting thing is the current market valuation of £140m is 85% below peak valuation of £1bn. And, profits are growing from the refreshing their stores' format.

Recently, Carpetright plc shares gone up by 25% in two weeks with the monthly chart telling me a £4/target is next. http://bit.ly/2mFdRyQ

P.S. I researched this a few weeks ago and written an article on my blog.
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Old Mar 12, 2017, 1:44pm   #4
 
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Dialight valuation ahead of fundamentals?

Walbrock Research started this thread Dialight (DIA) saw market valuation reached £350m or 440% higher in 15 years.
But, what about its fundamentals?

The business saw no growth in sales (+4%) with declining earnings of 78%. One positive spot is free cash flow increasing by 55%.

However, fundamentals have not catch-up market valuation. The only explanation is the stock market is overheating sending any shares to the moon.

P.S.: The dot-com bubble didn't end well for the shareholders back in 2000.
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Old Mar 13, 2017, 2:54pm   #5
 
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Jd sports given shareholders 1,500% gains

Walbrock Research started this thread JD Sports is one of the most successful companies in the last decade with share price gains of 1,584%!

These factors contribute to the following gains:
1. RISING PROFITS AND INCREASING MARGINS; - Profits grew from £8m to £133m in 12 years, whereas margins rose from 1.5% to 7%.
2. Revenue growth grew at a compound rate of 12.2% per year.
3. The value placed on JD Sports is close to 40X earnings and EV/EBIT of 25X (a record).
4. For every BRITISH POUND spent, JD manages to produce an extra £2.45 in sales within one year of implementing capex.
5. JD Sports has a net cash position of over £112m.

The funny thing is the previous decade (1996 to 2006) saw shareholders lose 8% on the stock.
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Old Mar 16, 2017, 3:19pm   #6
 
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Is Molins a value play?

Walbrock Research started this thread Maturing business Molins is struggling to grow.

Revenue is 33% smaller today, then 2004. Market valuation decline by 80% since 2003. Are Molins shares still value for money?

Molins management made a recent trading update suggesting the poor results is for last year. Because customers were delaying orders till 2017.

The second good news is their pension situation. With the UK Bond Rates (known as the 10-year Gilts) rising. Their assets pay more in cash flow to Molins retirees.

The downside to Molins is capital expenditure. Because they havenít spent big for a long time. Molins asset age in 14 years (is a record), and 60% of their assets meet that age.
Their last big spend was in 2003 at £13.6m. Since 2009, Molins average £4m in CAPEX. Donít be surprised if they spend £10m.

On share price, Molins could average 80 pence per share in 18 months. But, donít be surprised if it falls back to 40 pence because of the markets at all-time highs.
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Old Apr 3, 2017, 11:28am   #7
 
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St. Ives plc

Walbrock Research started this thread Here are some facts about this company you need to know (not in any particular order):
-Net book value of freehold drops from £55.3m to £13.3m in 16 years.
-It has 160 clients on their books compared with 130 last year.
-Revenue in the early 2000s is higher than today.
-Profits are very volatile.
-The business disposed of assets worth £500m since 2002.
-Today, property, plants and equipment drop from £200m to £30m in 15 years.
-The weekly technical chart shows a strong buy signal. http://i.imgur.com/APja03L.png
-The capital turnover ratio is an early indicator for investors to sell if valuation got too frothy.
- The depreciation and amortisation charge since 2002 is £341m.
-Since 2002, total gross capex spending came to £477m with net capex amounts to £136m.
-As well as doing a lot of disposing (£500m worth in 14 years), they did a lot of acquisitions causing goodwill to go from £41m to £189m (2016).


- In the last 14 years, there have been 15 occasions where the share price movement were greater than 20% in either direction.
-If 2017 is another loss-making year, it will be the second time in a row.
-The last time it made a net loss (in 2009), market valuation (such as P/B and P/S) is 70% cheaper than today, despite share price collapsing. You can argue we are in a bull market which helps St. Ives to keep a hefty valuation.

Last edited by Trader333; Apr 3, 2017 at 2:09pm.
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Old Apr 7, 2017, 10:36am   #8
 
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Tasty PLC, a value restaurant chain?

Walbrock Research started this thread I like this business because management has a record of past success in the industry.
Below are some key findings:
1. Annual lease per restaurant is £88k, down from £110k seven years ago.
2. The leasing duration for each chain is roughly 16.7 years. It worked out as annual lease/total operating lease = 6%. So, (1/6% = 16.7)
3. Asset turnover minus cash is stable.
4. External funding since IPOís admission totals £32m or £3.2m per year.
5. Market valuation is at a three-year low.
6. As management revise that new store openings to seven, it helps reduce capex down to around £6m. Previous guidance of 15 new stores would result in £13m to £14m capex.

Industry Outlook

The Guardian posted a piece stating an accountancy firm cite 5,570 restaurants has a 30% probability of going bust in the next three years.
These contributing reasons are: -
-The UK imports 48% of its food, this leads to higher operating costs;
-The cost of labour is rising from £6.70 to £7.20 in April, with a further rise to £7.50 to take place next April;
-More consumers are in debt; - 48% of borrowers have a credit card which is not cleared in full each month, compared with 39% a year ago.
Although they were valid points, we donít know how many of them are restaurant goers?
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