Saturday 21 July 2018 | ShareProphets: The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares
Lighthouse Group – half-year trading update, is ‘in line with expectations’ sufficient for the valuation?
Tom Winnifrith Bearcast: ahead of his next helping of Reynolds humble pie,. Cynical Bear sticks his todger in the Versarien hornet's nest - FWIW
The Register today reports on an incident at Just Eat (JE.) which appears not to be a one off and suggests that the Company's attitude to data protection is bordering on the reckless. The one incident now sees Just Eat suffering an official investiogation but the victim says that other women have now contacted her and so this could be just the tip of the iceberg.
I bought a few Just Eat (JE.)for a trade recently on the basis that the share price fall on the news of the standing-down of founder and CEO David Buttress was probably overdone. The shares have continued to drift and I have sold out at a small loss and opened a short at 500p
Earlier this week, I covered Fevertree and noted that despite the extraordinary earnings multiple attached (100x the most recent six-month result), I thought a portfolio of similar companies might do reasonably well over the long-term. Of course, this would require that we succeeded in finding at least a couple which did fulfill their organic growth potential – not easy – and held them for the long run. This morning brings interim results from Just Eat (JE), and the features are somewhat similar.
With some businesses you need to include a fair bit of value for high growth rates, but in the case of Just Eat (JE.) I think it is currently over-valued.
Pursuant to yesterday's warning by the US listed online restaurant order and delivery service, GrubHub (GRUB US, market cap $2.2 billion), I sold short a few shares in Just Eat (JE) - market cap £2.9 billion, the UK listed online restaurant order and delivery service.
It can be said that shares of Just Eat (JE) have been on the ropes at various times since they came to market just over a year ago.
A bunting of red warning flags is now billowing gently over the share price of Just Eat (JE.). I first identified this as a candidate to watch for an opportunity to short at the start of last December. Unfortunately I then chose shorting Just Eat as one of my tips for 2015. That decision is going to come back and bite me, but now that Just Eat is trading at 435p (last seen), and after the flurry of recent insider selling, it is time to revisit what could be a cracking trade.
I first covered Just Eat (JE.) at the start of December. Three of the company’s founding investors had just sold £139million worth of their holdings, through a discounted placement. This looked like a not so tacit admission that they saw limited further upside for the stock and were very keen to reduce their exposure.
Earlier this year, Doc Holiday made a sublime call to short Ocado (OCDO). His timing was perfect. No sooner had Doc sounded the death knell for this stock, the share price took a cliff dive. The logic of Doc’s call was deadly simple – “sell the founder”.
Shares in JUST EAT plc (JE.), which describes itself as “the world's largest online & mobile marketplace for takeaway… (which) connects 6.9 million active users to over 40,000 takeaway restaurants in 13 countries” have moved more than 9% higher, to a current 240p, on the back of results for the first half of 2014. The outlook is that “July's results continue to show significant year on year growth and we are confident that this momentum will be maintained”. With the shares having reached more than 290p following the April IPO, I now wonder how greedy the current share price is?
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