ITV has been on my watchlist for some time. In the past, many investors commented on how they followed the company because they thought it would be a takeover target due to the rise of streaming services and the thousands of hours of content ITV offers. No bids I know of have yet to be raised for ITV.
ITV offers linear TV advertising, and now with the rollout of the new ITX X streaming service, the company provides digital advertising. Linear has a tremendous local reach and has typically been used for branding and awareness to generic audiences through the free-to-air British TV network. In contrast, digital offers incredible targeting capabilities and has been used to drive more specific performance outcomes utilising the internet. The U.K. population is still forced to pay for a T.V. licence, so the audience is still there for linear marketing campaigns. In the U.S., 63% of Americans still choose to pay for cable T.V. With many exciting events, such as the Rugby World Cup, the King’s Coronation, and the FIFA Euro Cup due this year and next. Linear T.V. is still prominent in people’s lives; as a family, we still love watching Saturday night T.V.; Ant and Decs Takeaway and Catchphrase have been our favourites.
ITV X streaming services replace the catch-up service of ITV Hub, and through the extensive marketing campaigns on linear T.V., I thought I’d check out the service, and I’m impressed. It’s easy to navigate, displays programs that fit my viewing style and has a more up-to-date, stylish feel to the platform than it did with the cheap basic design of ITV Hub. You can pay a subscription for an advert-free service (if I had a subscription for everything I was interested in, I would be paying £1000s per month), but I am happy with watching adverts. Netflix has just introduced a cheaper advertising service in the U.K. at £4.99 instead of £6.99. Early reports are that not as many people have adopted the service as expected. ITV does not see the likes of Netflix as a threat due to the long relationships and experience they have working with and understanding the customers’ needs locally.
The company has warned advertising revenue will decrease in the next year, as expected, as we head into a weakened economy. As ITV has been around since 1955 and suffered many recessions and market downturns, I don’t see any worries here and have confidence the company can easily navigate the economic storm. I’d rather be comfortable being involved with a company with the experience of ITV than many of the new advertising companies jumping on the digital bandwagon. Historically, many companies cut their marketing budget at any sign of a recession. In recent years, many companies have realised their mistake in that those who didn’t pause campaigns benefitted from taking market share.
ITV doesn’t only sell advertising but also produces shows sold globally to the likes of Netflix and Amazon, which help support revenue in a downturn.
ITV looks more attractive to a potential buyer now than ever. Even though ITV, in their recent earnings call, claimed the company is not for sale, this doesn’t stop a competitor from making a bid for the company, which has to be put to the board and shareholders, plus claiming to be ‘not for sale’ could be a tactic to maintain strength in any negotiation. The company is still attractive to me if it is not for sale.
The share price of ITV is trending down and has not interested me until recently, where I can see exciting things are happening. I like the idea of a linear and digital advertising service working together, and the new ITV X has the potential to take on the larger popular online streamers. Still, many analysts comment it’s too little, too late. With the reach, relationships and experience ITV has, many companies will see the benefits ITV has to offer. I will do a deeper dive into ITV later to better understand its financial position and make my projections for the future.
Analysts predict an EPS of 10p for FY24. A historical average Price to Earnings ratio of 10x gives us a price target of 100p, an 17% upside from here. (This PE will be affected by the current risk-free rate investors have used in low-interest rate times, I predict things will normalise, and I calculate this into my projections). Simply Wall Street has a value on a 2 Stage Free Cash Flow to Equity model of £1.91, and analysts predict a price of 96p within one year.
Will the share price drift further as the recession grows, giving an even more attractive position to trade? Will this time-proven, resilient company, or will marketing campaigns continue and prosper through a market downturn as companies learn from past mistakes? I will be watching closely on a fundamental and technical level.
I last looked at this ‘Cellular Materials Technology’ Company on the 10th of October 2022. Zotefoams produces many foams used for various purposes, including packing, construction, the automotive and aerospace sector, and many more. An exciting new extension to the business comes in re-zorce circular packaging, which produces a sustainable beverage carton. The carton is said to be a game changer in recyclable beverage cartons. The cartons are still in the testing stage, but Zotefoams are confident that the product will be available soon. Zotefoams existing businesses cover finance for the new venture.
The company has been confident of beating expectations which is reflected in their latest Full Year results for 2022. In my last coverage, I estimated an EPS of 19p and improved margins. The company reported revenue up 26.5% to £127.4m with operating margins of 10.6% and Earnings Per Share (EPS)of 20.2p, slightly beating my estimate. At 355p, this gives us a P.E. of 17.2x.
Cost increases have been passed on to customers, which shows pricing power and this, along with a favourable strong dollar and a normalisation to other costs, has helped increase margins. Costs that Zotefoams incurred in 2022, such as high energy prices and supply chain issues, are still falling, so they should be reflected in margins in the future.
Zotefoams comfortably sits in my Growth at a Reasonable Price (GARP) swing trading/ investing strategy, which relies on high revenues, increasing margins and a bright growing future in a favourable market. The company historically trades on A PE Ratio of around 20-21x, so I see an upside from here, especially with the addition of the new re-zorce business. The company has estimated a flat year for FY23 due to the macroeconomic situation but is expected to increase EPS to c.28p by 2025. At a PE of 21, this could be a long-term price target of 588p, with the potential to beat with upgrades.
On a technical level, the share price has trended upside since hitting a double bottom in October 2022. More recently, the price has pulled back slightly, and I decided to open a position on a drop of 3% on results day at £3.51. As with many companies, Sentiment is dulled by predicting how hard a recession will be. I am sick of discussing this situation and happy to invest in excellent, will-lead, profitable companies which trade in favourable markets. If the price drops, I will top up my holding. Trying to time the perfect bottom of the market is near impossible, so I am happy to average in on longer-term trades.
NEXT plc is a United Kingdom-based retailer which offers clothing, footwear, accessories, beauty and home furnishing and upholstery products. The company operates through NEXT Retail, NEXT Online, NEXT Finance, NEXT International Retail, NEXT Sourcing, Lipsy, NENA, and Property Management segments. The company is still making acquisitions, recently rescuing made.com and Joules, thus, increasing market share in the retail clothing industry.
Next probably produces the best annual report on the London Stock Exchange; it is a pleasure to read, the information surrounding the macroeconomic environment, the retail industry and the company is extensive, and I love how the company engages with their shareholders; check out the latest report here. Also, check out previous reports on the company website for further education in retail.
The company expects a challenging year going forward but is confident it will grow considerably once the cost of living headwinds disperse. Next claims it is not slowing down, even though it already has seven million online customers and 466 stores nationwide. The company states it has many ideas to boost growth and is not worried that it might have topped out attracting new customers.
The business has raised prices in 2022 and is continuing, albeit at a low pace in 2023 and is confident inflation will peak and reduce by year-end. The supply chain and suppliers’ prices are normalising, and energy and rent are expected to decline. Next has the confidence that it can weather a slowdown in the economy and bounce back stronger.
Next has an Operating Margin of 18.4% which is excellent for such a large retailer, and produces an EPS of 5.71p. The balance sheet is good, with a manageable long-term debt of £790m, easily covered by earnings. EPS, as stated above, is due to drop next year to 5.05p and then increase to 5.38p for FY25; this number will change with the economic outlook. On a historical PE of around 14x, we could look at a price target of 75oop by FY25. A 14% upside from current prices. With a dividend yield of 3%, I think there are much better opportunities out there. Still, Next is a good fit onto my watch list while monitoring the economic outlook. Earnings upgrades and furthering education from reading the reports the company releases that could have a read across to other market segments.
I do not invest in Chinese companies. In fact, non-Chinese nationals are unable to invest in Chinese companies. The listings you see on the U.S. exchanges are American Depositary Receipts (ADRs).
ADRs offer U.S. investors a way to purchase stock in overseas companies that would not otherwise be available. Investing in an ADR gives no voting rights or claims to the company.
I do not trust the accounts of Chinese companies, and audit problems are rife. Nevertheless, this week, I was interested in hearing about the plan to split Alibaba into six different companies, thus helping the business grow and unlocking shareholder value. Alibaba is the Chinese equivalent of Amazon. Many experienced investors, such as Charlie Munger, have talked favourably about Alibaba in the past while its stock prices headed south.
With the new restructuring plan, the depressed stock price could double from its lows by boosting investor confidence, and I have decided to open a spread bet position with a tight stop loss, hoping to hold for several weeks. I am mindful of the charges that come along with the trade.
DISCLAIMER: I am not a financial advisor; this is not a financial advice website. This is a diary of my thoughts and mine alone. All information is provided strictly for educational and entertainment purposes. It does not consider anybody’s circumstances, situation, trading style or risk levels. If you are making an investment or other financial management decisions and feel you need guidance or advice, please consult a suitably qualified licensed professional. If interested in trading, please develop your strategy and research your own trades.
ITV has been on my watchlist for some time. In the past, many investors commented on how they followed the company because they thought it would be a takeover target due to the rise of streaming services and the thousands of hours of content ITV offers. No bids I know of have yet to be raised for ITV.
ITV offers linear TV advertising, and now with the rollout of the new ITX X streaming service, the company provides digital advertising. Linear has a tremendous local reach and has typically been used for branding and awareness to generic audiences through the free-to-air British TV network. In contrast, digital offers incredible targeting capabilities and has been used to drive more specific performance outcomes utilising the internet. The U.K. population is still forced to pay for a T.V. licence, so the audience is still there for linear marketing campaigns. In the U.S., 63% of Americans still choose to pay for cable T.V. With many exciting events, such as the Rugby World Cup, the King’s Coronation, and the FIFA Euro Cup due this year and next. Linear T.V. is still prominent in people’s lives; as a family, we still love watching Saturday night T.V.; Ant and Decs Takeaway and Catchphrase have been our favourites.
ITV X streaming services replace the catch-up service of ITV Hub, and through the extensive marketing campaigns on linear T.V., I thought I’d check out the service, and I’m impressed. It’s easy to navigate, displays programs that fit my viewing style and has a more up-to-date, stylish feel to the platform than it did with the cheap basic design of ITV Hub. You can pay a subscription for an advert-free service (if I had a subscription for everything I was interested in, I would be paying £1000s per month), but I am happy with watching adverts. Netflix has just introduced a cheaper advertising service in the U.K. at £4.99 instead of £6.99. Early reports are that not as many people have adopted the service as expected. ITV does not see the likes of Netflix as a threat due to the long relationships and experience they have working with and understanding the customers’ needs locally.
The company has warned advertising revenue will decrease in the next year, as expected, as we head into a weakened economy. As ITV has been around since 1955 and suffered many recessions and market downturns, I don’t see any worries here and have confidence the company can easily navigate the economic storm. I’d rather be comfortable being involved with a company with the experience of ITV than many of the new advertising companies jumping on the digital bandwagon. Historically, many companies cut their marketing budget at any sign of a recession. In recent years, many companies have realised their mistake in that those who didn’t pause campaigns benefitted from taking market share.
ITV doesn’t only sell advertising but also produces shows sold globally to the likes of Netflix and Amazon, which help support revenue in a downturn.
ITV looks more attractive to a potential buyer now than ever. Even though ITV, in their recent earnings call, claimed the company is not for sale, this doesn’t stop a competitor from making a bid for the company, which has to be put to the board and shareholders, plus claiming to be ‘not for sale’ could be a tactic to maintain strength in any negotiation. The company is still attractive to me if it is not for sale.
The share price of ITV is trending down and has not interested me until recently, where I can see exciting things are happening. I like the idea of a linear and digital advertising service working together, and the new ITV X has the potential to take on the larger popular online streamers. Still, many analysts comment it’s too little, too late. With the reach, relationships and experience ITV has, many companies will see the benefits ITV has to offer. I will do a deeper dive into ITV later to better understand its financial position and make my projections for the future.
Analysts predict an EPS of 10p for FY24. A historical average Price to Earnings ratio of 10x gives us a price target of 100p, an 17% upside from here. (This PE will be affected by the current risk-free rate investors have used in low-interest rate times, I predict things will normalise, and I calculate this into my projections). Simply Wall Street has a value on a 2 Stage Free Cash Flow to Equity model of £1.91, and analysts predict a price of 96p within one year.
Will the share price drift further as the recession grows, giving an even more attractive position to trade? Will this time-proven, resilient company, or will marketing campaigns continue and prosper through a market downturn as companies learn from past mistakes? I will be watching closely on a fundamental and technical level.
I last looked at this ‘Cellular Materials Technology’ Company on the 10th of October 2022. Zotefoams produces many foams used for various purposes, including packing, construction, the automotive and aerospace sector, and many more. An exciting new extension to the business comes in re-zorce circular packaging, which produces a sustainable beverage carton. The carton is said to be a game changer in recyclable beverage cartons. The cartons are still in the testing stage, but Zotefoams are confident that the product will be available soon. Zotefoams existing businesses cover finance for the new venture.
The company has been confident of beating expectations which is reflected in their latest Full Year results for 2022. In my last coverage, I estimated an EPS of 19p and improved margins. The company reported revenue up 26.5% to £127.4m with operating margins of 10.6% and Earnings Per Share (EPS)of 20.2p, slightly beating my estimate. At 355p, this gives us a P.E. of 17.2x.
Cost increases have been passed on to customers, which shows pricing power and this, along with a favourable strong dollar and a normalisation to other costs, has helped increase margins. Costs that Zotefoams incurred in 2022, such as high energy prices and supply chain issues, are still falling, so they should be reflected in margins in the future.
Zotefoams comfortably sits in my Growth at a Reasonable Price (GARP) swing trading/ investing strategy, which relies on high revenues, increasing margins and a bright growing future in a favourable market. The company historically trades on A PE Ratio of around 20-21x, so I see an upside from here, especially with the addition of the new re-zorce business. The company has estimated a flat year for FY23 due to the macroeconomic situation but is expected to increase EPS to c.28p by 2025. At a PE of 21, this could be a long-term price target of 588p, with the potential to beat with upgrades.
On a technical level, the share price has trended upside since hitting a double bottom in October 2022. More recently, the price has pulled back slightly, and I decided to open a position on a drop of 3% on results day at £3.51. As with many companies, Sentiment is dulled by predicting how hard a recession will be. I am sick of discussing this situation and happy to invest in excellent, will-lead, profitable companies which trade in favourable markets. If the price drops, I will top up my holding. Trying to time the perfect bottom of the market is near impossible, so I am happy to average in on longer-term trades.
NEXT plc is a United Kingdom-based retailer which offers clothing, footwear, accessories, beauty and home furnishing and upholstery products. The company operates through NEXT Retail, NEXT Online, NEXT Finance, NEXT International Retail, NEXT Sourcing, Lipsy, NENA, and Property Management segments. The company is still making acquisitions, recently rescuing made.com and Joules, thus, increasing market share in the retail clothing industry.
Next probably produces the best annual report on the London Stock Exchange; it is a pleasure to read, the information surrounding the macroeconomic environment, the retail industry and the company is extensive, and I love how the company engages with their shareholders; check out the latest report here. Also, check out previous reports on the company website for further education in retail.
The company expects a challenging year going forward but is confident it will grow considerably once the cost of living headwinds disperse. Next claims it is not slowing down, even though it already has seven million online customers and 466 stores nationwide. The company states it has many ideas to boost growth and is not worried that it might have topped out attracting new customers.
The business has raised prices in 2022 and is continuing, albeit at a low pace in 2023 and is confident inflation will peak and reduce by year-end. The supply chain and suppliers’ prices are normalising, and energy and rent are expected to decline. Next has the confidence that it can weather a slowdown in the economy and bounce back stronger.
Next has an Operating Margin of 18.4% which is excellent for such a large retailer, and produces an EPS of 5.71p. The balance sheet is good, with a manageable long-term debt of £790m, easily covered by earnings. EPS, as stated above, is due to drop next year to 5.05p and then increase to 5.38p for FY25; this number will change with the economic outlook. On a historical PE of around 14x, we could look at a price target of 75oop by FY25. A 14% upside from current prices. With a dividend yield of 3%, I think there are much better opportunities out there. Still, Next is a good fit onto my watch list while monitoring the economic outlook. Earnings upgrades and furthering education from reading the reports the company releases that could have a read across to other market segments.
I do not invest in Chinese companies. In fact, non-Chinese nationals are unable to invest in Chinese companies. The listings you see on the U.S. exchanges are American Depositary Receipts (ADRs).
ADRs offer U.S. investors a way to purchase stock in overseas companies that would not otherwise be available. Investing in an ADR gives no voting rights or claims to the company.
I do not trust the accounts of Chinese companies, and audit problems are rife. Nevertheless, this week, I was interested in hearing about the plan to split Alibaba into six different companies, thus helping the business grow and unlocking shareholder value. Alibaba is the Chinese equivalent of Amazon. Many experienced investors, such as Charlie Munger, have talked favourably about Alibaba in the past while its stock prices headed south.
With the new restructuring plan, the depressed stock price could double from its lows by boosting investor confidence, and I have decided to open a spread bet position with a tight stop loss, hoping to hold for several weeks. I am mindful of the charges that come along with the trade.
DISCLAIMER: I am not a financial advisor; this is not a financial advice website. This is a diary of my thoughts and mine alone. All information is provided strictly for educational and entertainment purposes. It does not consider anybody’s circumstances, situation, trading style or risk levels. If you are making an investment or other financial management decisions and feel you need guidance or advice, please consult a suitably qualified licensed professional. If interested in trading, please develop your strategy and research your own trades.
