It’s All About The FOREX
This main topic in every bar, workplace and checkout queue this week was the demise of the Great British Pound. The Pound vs the Dollar fell to a low of £1.03 recently. My local barber remembers the time he went to America and had two dollars to one pound “Those were the good old days” he stated. Every man and his dog are now experts in currencies and know the exact reasons why our currency is crashing. I suspect this all-good advertising for the Forex Market and the FX Brokers.
Most gamblers disguising themselves as traders and investors are sold a new dream now their crypto and NFCs have crashed. They seek a new way to achieve financial success quickly and guessing which way the pound is going is the easiest way. The best advice I can give you is to stay away from trading currencies. There is no structure to the forex markets and the top five biggest banks in the world will position themselves to take everything you have.
I am currently looking at companies that are benefiting from this tough macro market we are crawling our way through. That’s easier said than done. I try to identify companies dealing in dollars and that are trading above their 50-Day Simple Moving Average (SMA). I screen the markets for companies worth more than £100 million and that are trading above the 50-Day SMA. This process produces 34 companies. 34 companies out of 722.
This is where I identified three FX brokers CMC Markets, AGFX and PLUS 500. All these companies state they are beating on revenue and profits and upgrading guidance. As Jim Cramer says, “there’s always are bull market somewhere” and by listening to the conversations you hear on the bus, we could have identified one here.
Price Per Share: £17.65
Market Cap: £1.68b
Plus500 Ltd. develops and operates an online and mobile trading platform for customers to trade contracts for difference (CFDs). As I recall Plus 500 in the past only offered Forex and Crypto but now viewing the company’s website, I can see they have expanded into trading stocks using CFDs, which is a good sign.
A Contract For Difference (CFD) is an arrangement made in financial derivatives trading where the differences in the settlement between the open and closing trade prices are cash-settled. There is no delivery of physical goods or securities with CFDs. Essentially, CFDs are used by investors to make price bets as to whether the price of the underlying asset or security will rise or fall and CFD’s enable the trader to take advantage of leverage.
The company which was incorporated in 2008 and is headquartered in Haifa, Israel is making money. Plus 500s revenue is up almost 13x and net profit is up 18x since 2012 and EPS growth for the last 3 years was up over 40%. It’s not all smooth sailing with regulatory pressures constantly hovering over the CDF market putting off potential investors. Plus 500 seems to take this in its stride, going from strength to strength. If we take the swing trade, we won’t be here for long and I suspect regulatory pressures are not something we have to worry about at the moment, these kinds of things only ever seem to pop up at the top of bull markets to protect the silly people suffering from FOMO (fear of missing out) and who are desperate to depart with their money.
The company is financially sound with a Debt-to-Equity ratio of 0.6% and a Current Ratio of 3.89, there’s plenty of cash and the business is not going bust anytime soon, we hope. With that said I am always wary of foreign companies. No hate, but I like the books to be nearer to the LSE.
It was refreshing to see a chart in an uptrend, with the price of Plus 500 heading back to all-time highs, even before I looked at the financials, I suspected there may not be much room left on the upside, but I was surprised.
As swing traders we don’t look too deep at the financials just deep enough, I’m not going to spend three weeks ripping the company’s financials to bits and performing Discounted Cash Flow Models to work out what the company is going to be worth five years.
I want to know if the company making money and if is it financially sound to give us confidence the company is not going under any time soon. More importantly, are investors going to buy the stock after we do?
Analysts are bullish about the stock with Earnings Per Share (EPS) estimates positive. 2023 EPS is estimated to come in at £3.05 raising to £3.21 in 2024.
I can see that the average Price to Earnings Ratio (PE) since 2015 is around 6.7x. so if we calculate 2023 EPS by 6.7x we can see on average this share could be worth £20.43, a 15.7% upside. Very basic but fits our needs for now.
In the current macro environment, PE ratios will be heading to the downside as companies struggle and investors are reluctant to get involved. But as Plus 500 finds itself in one of the few sectors with some momentum I think investors may find some confidence to push sentiment a little higher.
I can’t see any negative news surrounding the stock or the CFD market at the moment. And the reviews of the company seem positive.
I suspect mainly losers write reviews and marketing companies bigging up the company. So, I would take any review with a pinch of salt.
Plus500 insiders have not sold any sell shares over the last year, boosting my confidence they too believe the stock is not overpriced. But even better is that the company insider, Daniel King, paid $50k to buy shares at an average price of US$13.07 and the company itself is buying back its shares, reducing the overall share count, making investors’ slice of the pie a little bigger the longer they hold.
I bought into Plus 500 on Monday 3rd October at £16.55 gaining 6.7% to date. My stop loss is set at £15.54 with a target of £20 where there is some resistance which formed in Aug 2018.
Argentex Group PLC (AGFX)
Price Per Share: £106.5
Mk Cap: £120.5m
Argentex Group provides foreign exchange advisory and execution services for businesses worldwide. It offers spot, forward, structured solutions, and personalized hedging strategies FX capabilities are provided primarily through voice broking, Bloomberg, and online trading platforms enabling customers to manage their own trades. The company serves corporate, financial institutions, and private clients.
Argentex Group PLC was founded in 2011 and is headquartered in London, United Kingdom.
This company seems to serve the big boys, the suits, the characters we have heard some much about in the media and are conditioned to hate. I suspect the sector has benefitted from this in the past weeks. I have a theory that people reading and researching the current currency issues mentioned daily in our media will be targeted by them pesty cookies, becoming targets for FX Brokers selling the dream. With companies, such as the ones mentioned today, investing millions in excellent yet annoying marketing strategies, some targets will cave in and have a flutter. I think this is already showing.
AGFX posted its H1 update for the six months ending September 2022 stating it will exceed expectations for the period ending 31 December 2022.
The company reports this success was due to a more favourable market, with the recent historic lows in Sterling presenting exceptional short-term trading conditions. There is more demand now for Currency Exchanges to manage volatility in the markets as high-net-worth individuals worry about their fortunes.
AGFX is much smaller than Plus with a market cap of £120m and a PE of c.10 based on 2023 EPS of 10p but serves a different demographic of customers. Again, as with Plus, I think the average PE for AGFX can be achieved and exceeded. The average PE is c.13x. There is clear momentum on the upside with the volume of shares traded increasing, probably by investors noticing that revenue forecasts are set to grow 17.33% per year. I think the downside action of the price since 2020 is behind this company for some time.
The company has a debt-to-equity of 20% and a current ratio of 1.5 (in current market conditions I feel confident seeing a current ratio above 1.5) the balance sheet looks fine and I’m happy my trade will be safe.
On the day of earnings, AGFX was up 23% and I am looking to enter this share on a pullback, maybe around 100p. with a target of 130p. The longer the media reports their doom and gloom surrounding currencies, the more I think these companies will benefit.
It’s All About The FOREX
This main topic in every bar, workplace and checkout queue this week was the demise of the Great British Pound. The Pound vs the Dollar fell to a low of £1.03 recently. My local barber remembers the time he went to America and had two dollars to one pound “Those were the good old days” he stated. Every man and his dog are now experts in currencies and know the exact reasons why our currency is crashing. I suspect this all-good advertising for the Forex Market and the FX Brokers.
Most gamblers disguising themselves as traders and investors are sold a new dream now their crypto and NFCs have crashed. They seek a new way to achieve financial success quickly and guessing which way the pound is going is the easiest way. The best advice I can give you is to stay away from trading currencies. There is no structure to the forex markets and the top five biggest banks in the world will position themselves to take everything you have.
I am currently looking at companies that are benefiting from this tough macro market we are crawling our way through. That’s easier said than done. I try to identify companies dealing in dollars and that are trading above their 50-Day Simple Moving Average (SMA). I screen the markets for companies worth more than £100 million and that are trading above the 50-Day SMA. This process produces 34 companies. 34 companies out of 722.
This is where I identified three FX brokers CMC Markets, AGFX and PLUS 500. All these companies state they are beating on revenue and profits and upgrading guidance. As Jim Cramer says, “there’s always are bull market somewhere” and by listening to the conversations you hear on the bus, we could have identified one here.
Price Per Share: £17.65
Market Cap: £1.68b
Plus500 Ltd. develops and operates an online and mobile trading platform for customers to trade contracts for difference (CFDs). As I recall Plus 500 in the past only offered Forex and Crypto but now viewing the company’s website, I can see they have expanded into trading stocks using CFDs, which is a good sign.
A Contract For Difference (CFD) is an arrangement made in financial derivatives trading where the differences in the settlement between the open and closing trade prices are cash-settled. There is no delivery of physical goods or securities with CFDs. Essentially, CFDs are used by investors to make price bets as to whether the price of the underlying asset or security will rise or fall and CFD’s enable the trader to take advantage of leverage.
The company which was incorporated in 2008 and is headquartered in Haifa, Israel is making money. Plus 500s revenue is up almost 13x and net profit is up 18x since 2012 and EPS growth for the last 3 years was up over 40%. It’s not all smooth sailing with regulatory pressures constantly hovering over the CDF market putting off potential investors. Plus 500 seems to take this in its stride, going from strength to strength. If we take the swing trade, we won’t be here for long and I suspect regulatory pressures are not something we have to worry about at the moment, these kinds of things only ever seem to pop up at the top of bull markets to protect the silly people suffering from FOMO (fear of missing out) and who are desperate to depart with their money.
The company is financially sound with a Debt-to-Equity ratio of 0.6% and a Current Ratio of 3.89, there’s plenty of cash and the business is not going bust anytime soon, we hope. With that said I am always wary of foreign companies. No hate, but I like the books to be nearer to the LSE.
It was refreshing to see a chart in an uptrend, with the price of Plus 500 heading back to all-time highs, even before I looked at the financials, I suspected there may not be much room left on the upside, but I was surprised.
As swing traders we don’t look too deep at the financials just deep enough, I’m not going to spend three weeks ripping the company’s financials to bits and performing Discounted Cash Flow Models to work out what the company is going to be worth five years.
I want to know if the company making money and if is it financially sound to give us confidence the company is not going under any time soon. More importantly, are investors going to buy the stock after we do?
Analysts are bullish about the stock with Earnings Per Share (EPS) estimates positive. 2023 EPS is estimated to come in at £3.05 raising to £3.21 in 2024.
I can see that the average Price to Earnings Ratio (PE) since 2015 is around 6.7x. so if we calculate 2023 EPS by 6.7x we can see on average this share could be worth £20.43, a 15.7% upside. Very basic but fits our needs for now.
In the current macro environment, PE ratios will be heading to the downside as companies struggle and investors are reluctant to get involved. But as Plus 500 finds itself in one of the few sectors with some momentum I think investors may find some confidence to push sentiment a little higher.
I can’t see any negative news surrounding the stock or the CFD market at the moment. And the reviews of the company seem positive.
I suspect mainly losers write reviews and marketing companies bigging up the company. So, I would take any review with a pinch of salt.
Plus500 insiders have not sold any sell shares over the last year, boosting my confidence they too believe the stock is not overpriced. But even better is that the company insider, Daniel King, paid $50k to buy shares at an average price of US$13.07 and the company itself is buying back its shares, reducing the overall share count, making investors’ slice of the pie a little bigger the longer they hold.
I bought into Plus 500 on Monday 3rd October at £16.55 gaining 6.7% to date. My stop loss is set at £15.54 with a target of £20 where there is some resistance which formed in Aug 2018.
Argentex Group PLC (AGFX)
Price Per Share: £106.5
Mk Cap: £120.5m
Argentex Group provides foreign exchange advisory and execution services for businesses worldwide. It offers spot, forward, structured solutions, and personalized hedging strategies FX capabilities are provided primarily through voice broking, Bloomberg, and online trading platforms enabling customers to manage their own trades. The company serves corporate, financial institutions, and private clients.
Argentex Group PLC was founded in 2011 and is headquartered in London, United Kingdom.
This company seems to serve the big boys, the suits, the characters we have heard some much about in the media and are conditioned to hate. I suspect the sector has benefitted from this in the past weeks. I have a theory that people reading and researching the current currency issues mentioned daily in our media will be targeted by them pesty cookies, becoming targets for FX Brokers selling the dream. With companies, such as the ones mentioned today, investing millions in excellent yet annoying marketing strategies, some targets will cave in and have a flutter. I think this is already showing.
AGFX posted its H1 update for the six months ending September 2022 stating it will exceed expectations for the period ending 31 December 2022.
The company reports this success was due to a more favourable market, with the recent historic lows in Sterling presenting exceptional short-term trading conditions. There is more demand now for Currency Exchanges to manage volatility in the markets as high-net-worth individuals worry about their fortunes.
AGFX is much smaller than Plus with a market cap of £120m and a PE of c.10 based on 2023 EPS of 10p but serves a different demographic of customers. Again, as with Plus, I think the average PE for AGFX can be achieved and exceeded. The average PE is c.13x. There is clear momentum on the upside with the volume of shares traded increasing, probably by investors noticing that revenue forecasts are set to grow 17.33% per year. I think the downside action of the price since 2020 is behind this company for some time.
The company has a debt-to-equity of 20% and a current ratio of 1.5 (in current market conditions I feel confident seeing a current ratio above 1.5) the balance sheet looks fine and I’m happy my trade will be safe.
On the day of earnings, AGFX was up 23% and I am looking to enter this share on a pullback, maybe around 100p. with a target of 130p. The longer the media reports their doom and gloom surrounding currencies, the more I think these companies will benefit.
