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(NXT) Next General Share Chat

Discussion in 'General Share Chat' started by Microem1, Nov 10, 2015.

  1. moolahcoaster

    moolahcoaster investor

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    Major fall today - almost 10%!
    Next bought back £500,000 worth of shares today to add to the £300,000 on Friday.
    Ex-dividend is next Thursday - dividend is £1.05.
     
  2. moolahcoaster

    moolahcoaster investor

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    Bounce back today and another £500,000 worth bought back by the company. Wish I could spend £1m in 2 days....
     
  3. moolahcoaster

    moolahcoaster investor

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    ... and another half a million on share buy back
     
  4. moolahcoaster

    moolahcoaster investor

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    another half a mill spent on share buyback.
    Back in May there were more than 150million shares on the market - now under 148m
     
  5. Mongoose82

    Mongoose82 A Legendary Member

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    "Next performed resiliently in H1 FY 2017, considering the damage from slowing pre and post the Brexit consumer confidence vote had already been factored in, in addition to the weather hit in March and April. Sales were boosted by higher number of stock for sale, with clearance rates slightly ahead of the management's expectations. For the current year (FY 2017), the Group is well-positioned to cope with sterling weakness, as it has fully hedged all currency exposures. For FY 2018, the impact of a weak sterling would be partly mitigated by factors such as pre-referendum hedging and euro and dollar revenue. While consumer demand is likely to remain subdued for the remainder of the year and year-on-year performance in Q3 would be challenging given last year's strong comparative, Q4 is expected to read better. This is subject to winter this year, as last year saw a warm quarter. The group's mobile website was well received with conversion rate increasing 16% from 4.9% to 5.7%. Next plans to increase net trading space by 350,000 sq ft this year, bringing its portfolio to 8 million sq ft, substantially more than the forecast in March. In light of the above argument, we maintain a Buy rating on the stock."

    Update from Beaufort on Research Tree.
     
  6. MedicInvestor

    MedicInvestor Member

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    NXT current trades at 3888p, having fallen over 50% in the last year or so, has it bottomed yet?
     
    Makaira88 and Mr Nick Collyer like this.
  7. Richie

    Richie Demi God of BlueShare

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    Ive bought some this week as part of my new income portfolio . The fall looks overdone to me. All retailers will have the same costs pressures from min wage and £. Nxt are forecast to generate lots of cash still and are paying a chunky div. So a long term buy and hold for me
     
  8. Walter @ WalbrockResearch

    Walter @ WalbrockResearch Member

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    NEXT been buying back stock since 2000 with the share issue dropping from 370m to 150m. Here is a table showing the change in NEXT's share price with the changes in share issue for each year: NEXT's Share Price (Adjusted).
     
    MedicInvestor likes this.
  9. Walter @ WalbrockResearch

    Walter @ WalbrockResearch Member

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    Next PLC is an exciting business with a lot of competitive advantages.

    Their 20% operating margin beats ASOS's 4%, BOOHOO's 7% and luxury retailer's Burberry's 17%.

    Okay, I grant that ASOS and BOOHOO are growing faster, but regarding the PEG ratio, NEXT is lower on 0.61, compared with BOOHOO’s 0.93and ASOS’s 5.04.

    Debt to Equity of 300% shouldn't be a worry, as long as it produces these levels of earnings. Plus, they cover the interest cost 25 times over.

    Unlike some businesses, NEXT has to deliver the goods to justify its valuation where the EPS doubled from £2.21/share in 2011 to £4.42/share in 2016.


    NEXT’s management is right to be realistic by stating that the rise of input costs of 5%, or £29m are specifically due to:

    A. National Living Wage;

    B. Energy taxes;

    C. Wage Inflation;

    D. Website improvements.


    Other adverse points of NEXT PLC are:

    1. NEXT PLC’s consistently record NEGATIVE like-for-like sales but still manage to earn extraordinary operating margins.

    2. This leads to the company’s retail division reporting declining revenue per SQ. Ft. from £1,000 to £650, while tripling in sizes.

    3. Despite the large dividends give away, the company cash balance is under £70m, therefore NEXT need to churn out exceptional results year after year.

    Where are we now

    On a historical valuation basis, NEXT looks undervalue from the latest financial numbers. Future results for 2017 and especially 2018 will see if this market is right to justify today’s valuation.

    NEXT PLC looks very attractive at these levels but this is a volatile stock (despite being in the FTSE 100) because the sector is volatile and there is no cash cushion (as earnings are returned to shareholders) meaning it needs to perform every year.

    Don't forget when earnings fell by 18% during the financial crisis, NEXT's share price plunged by 70%!!! The question is: "Has the share price declined factored in weaker future earnings?"
     
    Richie and MedicInvestor like this.
  10. moolahcoaster

    moolahcoaster investor

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    this was the update from Woodford today:

    "Next was also weak, along with the broader UK retail sector. This has been the result of lingering concerns about the outlook for the UK consumer economy. As regular readers will know, we believe the market has become far too pessimistic about the prospects of the domestic economy and although this has weighed on the share prices of businesses like Next, a compelling and contrarian opportunity has, in our view, opened up. As far as Next is concerned, this view was reinforced during the month following a meeting with Lord Wolfson, the company’s CEO, which reassured us that the company remains a well-managed retailer, determined and well-situated to deliver long-term shareholder value. We added to the holding during the month."
     
  11. Richie

    Richie Demi God of BlueShare

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    The company seems very well managed to me. Mrs richie works at one of the bigger shops. She complains about how wveryone has to work so hard as there is only just enough staff to do everything.

    From an investment case the company generates a lot of cash. 4.5% divvy covered 2.7 times, and it currently trades on a forward pe of 9.

    I hold and am adding periodically
     
  12. Bristol87

    Bristol87 Demi God of BlueShare

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    Amazing margins compared to their peers. There is just something about Next stores that I hate. Their clothes are so boring.
     
    Richie likes this.
  13. Bristol87

    Bristol87 Demi God of BlueShare

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