Make millions - get yourself down to the pub!
Discussion
Simpo Two said:
That seems to tick every box - but what about service/support if it breaks?
I bought a full set of integrated Kitchen appliances from them about 6-7 years ago. The Integrated oven "blew" after a fortnight or so. A phone call and it was replaced within 48 hours.I would say service was good
Simpo Two said:
That seems to tick every box - but what about service/support if it breaks?
We also got a follow up call post delivery to check all was well. They took the opportunity to try to sell warranty, not pressured and as it was a fridge for beer in the garage not necessary. From memory the cover was very comprehensive new for old replacement is not able to repair.There is a saying 'new investors learn old lesson'. Nothing more than fools and greed. It's 1.5B. The valuation is within spitting distance of Dixons which earns 120M. Worst still is the company services 28% of the market, ergo it is impossible to actually make a reasonable return.
There is however a New Zealand accounting software company that makes losses, has half the revenues and is values at twice this dog. It makes amazon look like a bargain lol
There is however a New Zealand accounting software company that makes losses, has half the revenues and is values at twice this dog. It makes amazon look like a bargain lol
johnfm said:
Numbers don't make sense - how does a company turning only £8.1m profit manage to dupe a market in paying £1.2billion for it??
That is one heck of an EBITDA multiple...or did I misread something?
Although this isn't my area as such my initial thoughts is firstly that they have a few hundred million pounds worth of appliances in stock. Also, as a quoted company their shares can be traded.That is one heck of an EBITDA multiple...or did I misread something?
People buying companies at this level/value are far from stupid.
Frimley111R said:
Although this isn't my area as such my initial thoughts is firstly that they have a few hundred million pounds worth of appliances in stock. Also, as a quoted company their shares can be traded.
People buying companies at this level/value are far from stupid.
You say it's not your area-you would be correct. A few hundred million in stock you say. Try 10M give or take. You do realise they turn over 200M. So by your calculations they hold two years of appliance stock. That would make most of it obsolete.People buying companies at this level/value are far from stupid.
A few financial ratios. Equity (net worth) to capitalisation-the lower the better.
Amazon 19X
walmart 4
Apple 4
Facebook 12
Linked In 22X
Netflix 25X (the winner of the most overvalued stock on the US exchanges)
Appliance online 250X
It follows that AO with a multiple 10X that of Netflix (the champ of bubblish valuations) may seem a tad pricey.
burwoodman said:
Frimley111R said:
Although this isn't my area as such my initial thoughts is firstly that they have a few hundred million pounds worth of appliances in stock. Also, as a quoted company their shares can be traded.
People buying companies at this level/value are far from stupid.
You say it's not your area-you would be correct. A few hundred million in stock you say. Try 10M give or take. You do realise they turn over 200M. So by your calculations they hold two years of appliance stock. That would make most of it obsolete.People buying companies at this level/value are far from stupid.
A few financial ratios. Equity (net worth) to capitalisation-the lower the better.
Amazon 19X
walmart 4
Apple 4
Facebook 12
Linked In 22X
Netflix 25X (the winner of the most overvalued stock on the US exchanges)
Appliance online 250X
It follows that AO with a multiple 10X that of Netflix (the champ of bubblish valuations) may seem a tad pricey.
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.
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
burwoodman said:
Well done the founder- he has found a mug investor(Joe Public) in paying what is simply a grossly inflated price. I bet management are flogging as many shares as they can
Edited to add-forecast growth is 11%
Current PE 187
lololol
Edited to add-forecast growth is 11%
Current PE 187
lololol
Edited by burwoodman on Tuesday 4th March 09:47
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