Not sure your info is correct although invesco & artemis retain large stakes;the most complete details of fund & institutional holdings in CARD, and other companies, is available on the morningstar.com website.However this is only as good as each parties most recent disclosure.
From memory the founding family directors also retain a large stake;details in most recent full annual accounts.
All shops will be busy.
The margins per card are getting squeezed.
Living wage to increase and business rates for parts of
UK also increased. Also Utilities increasing.
And turnover not increasing to the number of shops
I topped up on Fri. Sure, I'm worried but I've used my eyes and I've seen lots of people lining up at the tills waiting to buy their Xmas bits and cards. Things have calmed down some what but NEVER have I seen that shop without a customer. (Northcott Glengormley). Unless they're selling their product at a loss this should be a buying opertunity (got a new pc for Xmas and the spell checker not up and running). If this goes cheaper I will try to free up more funds to buy more as I'm here for the LONG term and have faith in the directors who bought and spent much more than me.
"Seems more like a strong buy to me. There is much more risk of a 10% upside than a 10% downside from here."
Quite, Bribon... foolish to say it won't go to 180p of course, the market can stay irrational for longer than we can stay solvent, as Uncle Warren reminds us.
And I am always keen to see reasoned, well illustrated arguments as to why it should go to 180p, or even lower. But anyone can toss off unsubstantiated near-term SP predictions - such have the advantage of being impossible to argue with! Personally, I always try to justify any investment case, good or bad - and will always show my workings.
I think this is going to 275p! And very possibly this year... there, it is easy...
If 180p is your prediction I dont see how that equates to a strong sell from 200p. Bit risky to call it a strong sell as that is only 10% downside.
Seems more like a strong buy to me. There is much more risk of a 10% upside than a 10% downside from here.
...buy when there's blood on the streets /never catch a falling knife /if you can keep your head when others are losing theirs what do they know that you don't/when you're in a hole stop digging '.the only saying I've found useful is the last one .when I've had a testing week (like this one ) I always think thank God it's Friday....it gives everyone time to think
Ah well it's only money perhaps the carillon effect. Did anyone correct Isi nog seen an appology. Holding off buying more for now might switch some lloyds but no idea where bottom is at minute.
attilio7: Mr 1 novice, card factory is in fact undervalued The calculations below outline how an intrinsic value for Card Factory is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years. See our documentation to learn about this calculation. 5 year cash flow forecast 2018 2019 2020 2021 2022 Levered FCF (GBP, Millions) £58.30 £67.70 £73.20 £78.05 £83.22 Source Analyst x1 Analyst x2 Analyst x2 Extrapolated @ (6.63%) Extrapolated @ (6.63%) Present Value Discounted (@ 8.3%) £53.83 £57.72 £57.63 £56.74 £55.86 Present value of next 5 years cash flows: £282 Terminal Value Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate g) Terminal Value = £83 × (1 + 1.49%) ÷ (8.3% 1.49%) Terminal value based on the Perpetuity Method where growth (g) = 1.49%: £1,241 Present value of terminal value: £833 Equity Value Equity Value (Total value) = Present value of next 5 years cash flows + terminal value £1,115 = £282 + £833 Value = Total value / Shares Outstanding (£1,115 / 341) Discount to Share Price Value per share: £3.26 taken from Simply Wall Street
"The reality is that divis are being paid out of reserves, and debt is accordingly creeping up bit by bit. Why the lenders allow this is one of the mysteries of our times. "
If divis are paid out of distributable reserves, and all debt/leverage metrics remain healthy (not to mention cash flow), then I can't see why it's an issue for the lenders at all? The key point being that the bulk of dividends paid post-IPO have been clearly designated "special", and predicated partly on gearing up the balance sheet to a more efficient - though hardly stretched - level (target of 1.0 to 2.0x ND/EBITDA). I can see why lenders would be queuing up to lend into that profile... I would be! Rather than, say, your average low margin, heavily indebted contractor/outsourcer...
"... company needs to adopt a more prudent balance sheet and start putting cash back in the business rather than funding it with lenders money... if we are in a low or no growth period will have to move to retain around half its earnings in the business and cut dividend pro rata."
TX2 - again, as above - CARD's ordinary divis are only around half of earnings (even in this FY, on current forecasts, depite a dip in profits). The "specials" should always have been viewed as exactly that - though clearly some in the market have come to regard them (whether foolishly or merely greedily) as something more permanent. A classic case of being fearful when others are greedy, as per Uncle Warren??
I think we will be in a situation soon enough - if not already - where total divis (including any specials) are no more than FCF, in which case you are no longer adding to lender funding (and leverage will likely be falling as EBITDA grows again, which I'd expect from next year). But this is more than enough for me, given the FCF profile.
And so the tide has turned... people are fearful now, it seems. Time to be greedy!
the travails of other retailers is sucking down CARD .it's like a vortex ....there's no escape (other than [email protected] a vey low price .Dignity is slashing its margins to stay competitive (share price halved) /Carpetright is in a mess with lack of sales/margin (share price halved) .sitting tight for now or is this stubborn pride?
After deducting "goodwill" CARD has net negative tangible assets of around £140m after taking account of the last special dividend which was not included in the last accounts.
Whilst I have every expectation that CARD will remain highly cash generative;I think we will see some decline in profits;as a consequence I feel the company needs to adopt a more prudent balance sheet and start putting cash back in the business rather than funding it with lenders money.I think if we are in a low or no growth period will have to move to retain around half its earnings in the business and cut dividend pro rata.
A CARD piece in today's edition (full text below for reference)... provides a degree if insight into the issue - as per zip00 - of the City getting it "wrong".
Liberum now forecasts a total divi of 23.9p for this year - which implies a "special" element of pretty close to the 15p they've sustained for the past three years. As I've previously argued, I think this is just too high - it doesn't square with management guidance, nor do I think it should EVER have been expected, given the more "mature" balance sheet position they've now reached.
For the following two years they now forecast a divi of 17.7p - so an implicit "special" of more like 8p. This is more reasonable - but for this year (ie. FY18) IMHO, not just reducing to this for FY19 and FY20. It would be a more sustainable level, based on FCF forecasts (ie. dividends being fully covered by FCF, not relying on further increases in leverage, as has been the case with the special dividends for the past 3 years).
But quite why the analyst had to cut his FY19/20 total divi forecasts by 30% to get to these levels, in the first place, defeats me... Equally, I am not sure his price target (240p, down from 260p) squares with, on his own numbers, a 10% yield for this year and a sustainable yield well over7% thereafter. It all smacks of CARD being a classic victim of unreasonably inflated expectations... and, perhaps, its own success?
"Greetings cards-to-gifts retailer Card Factorys (CARD) income credentials have weakened following a warning (11 Jan) full year earnings will disappoint due to continued margin pressure. We mentioned Card Factory, which pays a big chunk of its shareholder rewards as special dividends, in an article spelling out the dangers of such an approach in last weeks issue.
Given subdued footfall, earnings growth for next year is likely to be limited amid foreign exchange and wage-related cost pressures. While like-for-like sales grew 2.7% in the 11 months to 31 December, this was driven primarily by lower margin non-card categories such as gifts and dressings, with card sales being stable.
Given margin pressure, Liberum Capital has cut earnings forecasts again and dramatically reduced its dividend estimates for the historically generous dividend payer. Aside from what was a secure dividend we did not view Card Factory as a growth stock but an income play and until we gain more confidence that margins have troughed then the dividend outlook is less clear, writes Liberum, trimming its year to January 2018 dividend per share (DPS) estimate by 3% to 23.9p, with its 2019 and 2020 forecasts slashed by 31% to 17.7p. We cut our DPS by 30% in full year 2019 and beyond as we move to a covered free cash flow (FCF) position and a declining debt profile which we feel is much more appropriate when both topline and cost pressures persist, explains the broker, paring its price target from 260p to 240p.
A hold rating is retained in light of a sharp share price fall to 220p that leaves Card Factory trading on a 10.9% prospective dividend yield."
Have a pretty large holding in Card, all purchased after the fall , in 7 blocks.
I had been looking at Card for some time, but had not done much research on them, but having some spare time prior to going on hols , I did do quite a lot of work to decide whether to invest, well that research gave me the confidence to invest.
Why the "city" have hammered this share is somewhat of a mystery, the offer is unique, the board of non execs have a very impressive retail history, cash generative, good divi well covered, etc etc . I did not bring my research notes with me but will go into more detail in 10 days time, but suffice to say I am well happy with my purchases to the extent I bought another tranche today.
Cannot always get on the Internet, first time today, so made sure my purchase was a pretty large one.
Roger Whiteside, Chief Executive Officer, bought 22,520 shares in the company on the 15th January 2018 at a price of 219.90p. The Director now holds 22,520 shares.
Card Factory has been notified that on 15 January 2018, Elizabeth Whiteside, the wife of Roger Whiteside, the Company's Independent Non-Executive Director, purchased, in aggregate, 22,520 ordinary shares in the Company at an average price of 219.9p per share. The transaction took place on the London Stock Exchange.
Show of confident , stop worrying guys. always a good sign when directors buy a decent amount of shares.
I've got 3 batches of Card shares, all have a sell trade listed at 3 different targets, closest is 250 the other 2 much higher. The way I understand the rules on shorting if you have a sell (trade) price set then they can't be shorted, not that my few makes much difference but if all small holders did this might help a little.....
"Given the moaning and groaning I am hearing on other boards, I respectfully suggest that iii would be better off trying to manage a dealing platform that actually works, rather than churning out dodgy pieces of "research" (sic)..."
Indeed so and as one that has suffered loss through the uselessness of iii`s new platform,I`ve done more than my fair share of moaning.
Useless platform and useless analysis on stocks.
They are quite rightly getting torn to shreds here :
My main issue is - their numbers don't stack up! Quite a big issue, really, when you are writing articles essentially based on such a quantitative screen...
They quote a dividend yield of 6.8% - which implies a divi around 14.6p (of which broadly 5p would be a "special"). Fair enough - may well be a reasonable expectation for this year IMHO. Yet they also quote a dividend cover of "1x" - which does not compute with the current forecasts for EPS of around 18.5p this year, which would be cover of 1.3x (vs 19.8p previous FY EPS, cover of c.1.4x).
My sense is there is, most likely, a disconnect between the overall (ie. ordinary + special) dividend level assumed in the yield figure and that assumed in the dividend cover level. An example of the dangers of relying on the numbers churned out by third-party web data sources! No substitute, as always, for DYOR...
FWIW the yield on the ordinary divi alone is currently around 4.4% (prospective) - with cover of just under 2x.
And of course, all of this ignores CARD's (very strong) profile on FCF cover...
Given the moaning and groaning I am hearing on other boards, I respectfully suggest that iii would be better off trying to manage a dealing platform that actually works, rather than churning out dodgy pieces of "research" (sic)...
Glad to read that some people who I regard highly are still providing calm, sensible and positive comment here! CARD has been on my radar a while (even though I usually shun retail) and the price fall last week was unjustified in my opinion. So I crystalised a 15% profit on Tullow Oil (that I had been looking to exit because of volatility) and bought into CARD at 216.8p.
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