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  1. #3511
    A BEARISH BULL winner69's Avatar
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    Quote Originally Posted by Brain View Post
    Applying DCF to Plexure at this stage is total nonsense. Future cash flow prediction will be influenced by the bias of person doing the prediction. DCF is only useful when a company has a history of cash flow either stable declining or increasing. Even with reliable data the result will still be effected by the judgement or bias of the analyst.

    Your brain keeps telling you crap that isn’t true. (Different brain to you Brain)


    Donald Rumsfeld once said -

    There are known knowns. There are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns. There are things we do not know we don’t know.
    “Just consider that maybe the probability of you being wrong is higher than you think.”

  2. #3512
    Senior Member King1212's Avatar
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    Go master winner! Tell Brain what Donald knows and what he does not know!

  3. #3513
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    Quote Originally Posted by winner69 View Post
    Your brain keeps telling you crap that isn’t true. (Different brain to you Brain)


    Donald Rumsfeld once said -

    There are known knowns. There are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns. There are things we do not know we don’t know.
    I would tend to agree with Brain a little here. For a growth company like Plexure, using DCF could get you a valuation anywhere between maybe 40c and $5. It's really valuing the assumptions of the modeller rather than the value of the company.

    I wouldn't say that DCF is nonsense but when pricing in exponential growth, small changes in the assumptions will create large changes in the value. And with the large changes in the SP this week I don't think the market can even agree on a value for PLX.

    For me personally, I'm not sure if their growth is going to dry up tomorrow or if they will grow 40% next year. How do you value that?

  4. #3514
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    Yes I would never say that DCF is nonsense it is just that it needs to be applied using good data. Garbage in garbage out.

    I will never loose any sleep over the unknown unknowns.

  5. #3515
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    Rod Drury was always proud of his crocodile chart - didn’t have real data in it but it was a chart that had the revenue line steeply rising before flattening out and the expenses line only increasing slightly.

    He told us it looked like a crocodile mouth and the wider it became the more Xero’s profits were going to be ...cool eh

    Rod no longer there but the crocodile’s mouth never got as wide as Rods chart implied it be.

    Maybe Craig needs a chart like Rods....currently down at neck level but surely the mouth must be opening big soon.
    “Just consider that maybe the probability of you being wrong is higher than you think.”

  6. #3516
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    Quote Originally Posted by Brain View Post
    Yes I would never say that DCF is nonsense it is just that it needs to be applied using good data. Garbage in garbage out.

    I will never loose any sleep over the unknown unknowns.
    Even revenue multiples as a basis for valuation needs good data ....otherwise even that way is nonsense.
    “Just consider that maybe the probability of you being wrong is higher than you think.”

  7. #3517
    Senior Member King1212's Avatar
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    Many posters here sound like Ogcc....when PPh founders...Chris n Elliot sold down their shares ...saying the company was crap....

    Look at Pph now ..all fundies flocking in and buy..buy ..buy

  8. #3518
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    Quote Originally Posted by winner69 View Post
    Even revenue multiples as a basis for valuation needs good data ....otherwise even that way is nonsense.
    true but at least revenue is something that is quantifiable and we are looking at current revenue and not trying to guess what it will be in 5 years or so time. The real art in this though is assessing the ability of the board and management. Are they up to the task and also does the product or service have legs? These are the tricky questions and I wish there were simple answers to this. The answers to those questions in my opinion is more important than the balance sheets unless of course a company is loaded with debt, and goodwill and is bleeding cash.

  9. #3519
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    Quote Originally Posted by King1212 View Post
    Many posters here sound like Ogcc....when PPh founders...Chris n Elliot sold down their shares ...saying the company was crap....

    Look at Pph now ..all fundies flocking in and buy..buy ..buy
    I am not highly critical of PLX . I have sold a fair few and It is still about 18 % of my portfolio. I have done well out of PLX and to some extent it has been a Covid antidote. My attitude is that PLX is not a done deal. 180 m users and they are not making a significant profit. There has been a lot of criticism of Balances views which I believe are just that - his views No Ulterior motives. I welcome the views of those for and against. Balance may well be right but in the short term people could make money. It is for individual investors to decide how they play the game. Personally I hope PLX goes from strength to strength and we all make money but there are significant risks involved. As winner would remind us - many known unknowns.

  10. #3520
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    Quote Originally Posted by Brain View Post
    I am not highly critical of PLX . I have sold a fair few and It is still about 18 % of my portfolio. I have done well out of PLX and to some extent it has been a Covid antidote. My attitude is that PLX is not a done deal. 180 m users and they are not making a significant profit. There has been a lot of criticism of Balances views which I believe are just that - his views No Ulterior motives. I welcome the views of those for and against. Balance may well be right but in the short term people could make money. It is for individual investors to decide how they play the game. Personally I hope PLX goes from strength to strength and we all make money but there are significant risks involved. As winner would remind us - many known unknowns.
    As Craig outlined last week, many of PLX contracts come from 2014 days when the platform was licensed based on the number of stores, not users.

    This is the difference between the old management and the new management.... the ability to pivot those contracts towards more profitability. I just hope when the old contracts come up to be renewed, that they are happy to pay increase costs for the platform.

    To be honest the new management team have taken this company from strength to strength. I'm happy to hold.

  11. #3521
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    Quote Originally Posted by Cobber View Post
    As Craig outlined last week, many of PLX contracts come from 2014 days when the platform was licensed based on the number of stores, not users.

    This is the difference between the old management and the new management.... the ability to pivot those contracts towards more profitability. I just hope when the old contracts come up to be renewed, that they are happy to pay increase costs for the platform.

    To be honest the new management team have taken this company from strength to strength. I'm happy to hold.
    What is likely in renegotiation of existing contracts, assuming a pivot to transaction revenues or share of transactions converting to sales, is that essentially that PLX position to take on more risk in that their customers customers (end users) transactions will be sustained or preferably grow, and the tradeoff will be to accept lower recurring license revenue. It's a careful balancing act.

    The other thing that will feature is that while the bulk of PLX transactions will be from McDonalds, but the contracts are country based, the risk to McD's is disparity of costs (revenues to PLX) across their global network. With McD's ownership of PLX and influence, it is possible if not probable that McD's corporate negotiates a global contract model that countries roll into when their current contracts expire. That global negotiating position is very strong on McD's side and while they are likely to want PLX to remain viable and successful, they won't be motivated to make PLX super successful at McD's expense.

    Ultimately the future prosperity of PLX is reliant on bringing online more and more global / country scale customers, using a blended license & transactions contract model as the benchmark. I'd like to hear more about how the White Castle rollout and IKEA is going. PLX have a habit of going silent on great prospects, like Anheuser-Busch. We've heard nothing either about 7Eleven Fuel App launched in March 2016, although it is still an advertised product. The SuperIndo contract is exciting for the diversification into grocery retail and assuming that goes well, the massive potential of SuperIndo's 51% owner Ahold Delhaize.

    Having held most since 2014, after taking a chunk of profit in 2016, now mostly fully loaded again. 30% of portfolio. I am impressed with how the Board and Management have moved this company to growth, modest profit, and decent cash reserves. It is much more secure as each year goes by and has a great future, imho.

  12. #3522
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    Quote Originally Posted by Brain View Post
    Yes I would never say that DCF is nonsense it is just that it needs to be applied using good data. Garbage in garbage out.

    I will never loose any sleep over the unknown unknowns.
    Using DCF to value a SaaS company gives you a nonsense result. Use the right tools for the right job, Guys....It's like a painter using a sledgehammer to paint a wall and following up with a big time consuming discussion on the painter's forum site why it doesn't work..
    Last edited by Hoop; Yesterday at 06:39 PM.

  13. #3523
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    Quote Originally Posted by Baa_Baa View Post
    What is likely in renegotiation of existing contracts, assuming a pivot to transaction revenues or share of transactions converting to sales, is that essentially that PLX position to take on more risk in that their customers customers (end users) transactions will be sustained or preferably grow, and the tradeoff will be to accept lower recurring license revenue. It's a careful balancing act.

    The other thing that will feature is that while the bulk of PLX transactions will be from McDonalds, but the contracts are country based, the risk to McD's is disparity of costs (revenues to PLX) across their global network. With McD's ownership of PLX and influence, it is possible if not probable that McD's corporate negotiates a global contract model that countries roll into when their current contracts expire. That global negotiating position is very strong on McD's side and while they are likely to want PLX to remain viable and successful, they won't be motivated to make PLX super successful at McD's expense.

    Ultimately the future prosperity of PLX is reliant on bringing online more and more global / country scale customers, using a blended license & transactions contract model as the benchmark. I'd like to hear more about how the White Castle rollout and IKEA is going. PLX have a habit of going silent on great prospects, like Anheuser-Busch. We've heard nothing either about 7Eleven Fuel App launched in March 2016, although it is still an advertised product. The SuperIndo contract is exciting for the diversification into grocery retail and assuming that goes well, the massive potential of SuperIndo's 51% owner Ahold Delhaize.

    Having held most since 2014, after taking a chunk of profit in 2016, now mostly fully loaded again. 30% of portfolio. I am impressed with how the Board and Management have moved this company to growth, modest profit, and decent cash reserves. It is much more secure as each year goes by and has a great future, imho.
    If McDonalds want a global license, they would be better off just buying the rest of PLX that they don't own. This is what they have done in the past with other tech companies who have been allowed to continue selling to 3rd party businesses.

    I don't think McDonalds can exit PLX anymore, they are way to invested... and will only have the same result if they were to try and pivot to a PLX competitor.

    It will be interesting to see how PLX get over the $30 million revenue mark... more McDonalds or more new customers. Time will tell.

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