I’m writing this from my hotel balcony in Mallorca. Having paid a few hundred pounds for a ‘fit to fly’ Covid test, I was delighted (and surprised) that somebody actually checked them. Trading is one of the few jobs where it is truly difficult to take entire days off. What if there is news on any of my holdings, or a significant RNS announcement from a company on my watchlist? Spending an hour on the RNS announcements at 7am is always a worthy investment of time – if only to keep track of company results and updates. One day the facts on a company you track may change for the better, and if you’re in a position to buy quicker than the next person then you get the cheaper stock.
Such a thing happened this week. A technology company I have been tracking announced an 80 percent increase in its royalty income (pure cash), which over a 10-year period will cover most of the company’s current market cap. Of course, we do have to discount this cash back to its Present Value – because cash in the future is not as useful as cash today. But even then, this assumes no further growth in the royalty income and doesn’t count the company’s two other business units. I’ll be waiting for the next set of results to get some more colour on the company and will share more then.
One company that I have built a position in – and intend to add to further should the story and chart continue to be good – is Guild Esports (GILD), a company which has teams or 'clans' of top esports players on its roster and is partly owned by David Beckham. This company is fast approaching its first year of being listed having come to the market in October 2020. Sadly, for those who participated in the IPO this was a complete flop with the price collapsing to 5p. We have talked about ‘lock-ins’ before and this was a prime example of sellers unloading on the bell because the book was not cleaned up properly. You would think that this would be something a broker would focus on because a bad IPO reflects badly on the broker. But for whatever reason, this appears to not have been the case and the price went from 9p to 5p within weeks.