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JD.COM – building a scale advantage or just buying profitless market share?
The world seems to be in love with JD.COM. After the concerns about the possible headwinds from a slowing Chinese economy that had been dragging down sentiment and shares in rival Alibaba, JD.COM’s results assuaged many of these fears. As well as reporting a +52% YoY increase in Q3 revenues and +72% rise in gross profit […]
Continue readingPearson CEO buys more time by selling FT Group and Economist stake
Pearson is pricing in a +3.9% CAGR growth rating but has delivered only +1% organic revenue growth in H1 FY15. Deferred revenues however were up +3% organic at end H1, which if translated into similar improvements in H2 organic revenue growth would put the group on course to perhaps delivering +4-5% for FY16 and therefore […]
Continue readingYahoo unveils ‘SpinCo’. Well it can’t be plainer than that surely?
Yahoo Inc: New management has finally accepted what the markets have been trying to discount for some time; that with Jerry Wang’s legacy investments in Alibaba and Yahoo Japan, Yahoo was beginning to look like an investment trust. New CEO, Marissa Marr’s decision to split off the remaining (15.4%) stake in Alibaba into a new […]
Continue readingDigital Plonkers
WPP’s annual digital investor day provided Sir Martin Sorrell another opportunity to show off his digital wares as well as take some entertaining swings at rivals; particularly the “plonkers†who had recently been over-paying (ie out-bidding WPP) for digital assets and particularly those in Brazil. Comment est-ce qu’on dit ça en Francaise Maurice? At […]
Continue readingBeware fake arbitrages on Yahoo – Alibaba!
For an arbitrage opportunity to exist, asset classes need to be fungible (deliverable against each other), so anyone selling you a scheme to “arbitrage” an apparent pricing disparity between related, but non-fungible, assets maybe selling you a dud. When I see investor research by banks, who should know better, promoting “the Yahoo arbitrage trade” […]
Continue readingFacebook – Q2 FY14: Squeezing out the returns, but DAU growth slowing
Facebook: Unparalleled qualitative information on consumers and unmatched reach makes Facebook a must have for both advertisers and NSA alike. For the moment, the group is managing the migration to lower yield mobile and overseas users while sustaining overall yield growth of +41% YoY and +14% QoQ and somewhat surprisingly, an average yield increase on […]
Continue readingAMAZON (AMZN-US) – Opportunity as group loses growth rating (WYT valuation perspective)
AMAZON (AMZN-US) Price: $177 Target: $158 Recommendation; HOLD – Long term over-weight (seek entry at around our $158 TP) Amazon – You can deliver growth, or margins, but woe betide a ‘go go’ growth stock disappointing on both metrics. In our analysis of the relationship between revenue growth and growth ratings of what we called […]
Continue readingYell – haircut for debt holders, but implications for the equity?
When debt holders are prepared to sell out at only 35% of face value, what does this say about the value of the equity? Aptly timed for Friday 13th, Yell announced the first tranche of its £159m debt re-purchase programme with the purchase of debt with a face value equivalent to £137.5m for consideration of only […]
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