Make millions - get yourself down to the pub!

Make millions - get yourself down to the pub!

Author
Discussion

johnfm

13,668 posts

249 months

Saturday 8th March 2014
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Simpo Two said:
johnfm said:
I think I will short this puppy.
You're going to put a young dog across the mains?
Isn't that how they cook them in Vietnam??

Countdown

39,690 posts

195 months

Saturday 8th March 2014
quotequote all
burwoodman said:
Dixons Revenue £8 billion
Dixons EBIT 120M
Dixons cash generated from operations( 260M)
Dixon debt to earnings ratio (2X or 2 years to clear their debt) the lower the better
Price to earning 13X
Market valuation 1.8B

AO Revenue £300M
AO EBIT £7M
Price to earnings 180
Market valuation 1.5B
AO debt to earnings 6X.

Dixons is also growing it's online business 56% faster than AO. Net margins are almost identical despite Dixons operating a vast bricks and mortar business.
Dixons prices are on average 3% lower like for like.

Something else to consider-the total market for appliances is 3.2B. Even if AO managed to secure 100% of the market which is impossible their after tax earnings would be no more than £39M giving them a PE 38 which is still 3X dixons. It isn't as though they can expand margins-in retail they are ever decreasing and they already operate at the lowest point of the curve.

The only thing 'missing' are the brains of people buying this dog.



Edited by burwoodman on Thursday 6th March 15:36
Whilst I completely agree with what you're saying - didn't people say the same thing about Facebook?

I'm not buying AO but I'm wondering whether that's just because I'm not clever enough to understand. biggrin


burwoodman

18,709 posts

245 months

Saturday 8th March 2014
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FB is technology, AO is fridges. I actually think FB is a joke and will never make profits that justify itsvaluation, same as amazon

burwoodman

18,709 posts

245 months

Sunday 9th March 2014
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20b is a big jump in profit.

burwoodman

18,709 posts

245 months

Thursday 27th November 2014
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Since their listing at 398p day 1 they are trading 220p down 42%


Mahogany

382 posts

208 months

Thursday 27th November 2014
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johnfm said:
I think I will short this
Good call.

gregf40

1,114 posts

115 months

Thursday 27th November 2014
quotequote all
Mahogany said:
johnfm said:
I think I will short this
Good call.
Put wink

burwoodman

18,709 posts

245 months

Thursday 27th November 2014
quotequote all
gregf40 said:
Mahogany said:
johnfm said:
I think I will short this
Good call.
Put wink
lol. Although to be fair i'm not sure anyone is selling Puts on this stock. Long Dixons short AO would have been the play. Same argument with Amazon and Alibaba.