Daily Stock Market Report (Fri 3 Jan 2025) - WIZZ, RYA, VLX

3rd Jan by Graham Neary

31 comments 3917 reads

Good morning! Let's see what the newswire has for us today.

7.15am: my initial impression is that today's feed does not contain any items that I would ordinarily consider to be worth covering. I will add the briefest of comments on WIZZ, RYA and VLX.

9.10am: today's report is now finished. I guess this will be the last weekend before the RNS gets busy again!

12 Stocks of Christmas: this series continues today with Mark Simpson looking at Serabi Mining (SRB). This stock also featured in Ed's QVM Portfolio.

Wizz Air Holdings (LON:WIZZ) (£1.46bn) - December 2024 Traffic Statistics

This Hungarian airline saw December bookings increase slightly year-on-year, despite a reduction in capacity. Its load factor therefore increased from 82.1% to 86.5%. Early indications for the company's Q4 period (Jan to March) are "positive, with bookings currently running ahead by over 2ppts [percentage points] vs this time last year".

Graham's view: the cheap earnings multiple at which this stock trades (PER 5.6x) is explained by the net debt figure of nearly €4.8 billion (as of the Sep 2024 interims).

Ryanair Holdings (NSQ:RYAAY) (£17.1bn) - Ryanair December Traffic

Ryanair doesn't have a London listing these days, but let's check in on its latest numbers anyway.

The total number of December passengers was up 8% year-on-year, and the monthly load factor was up 1 percentage point to 92%. Note the difference vs. Wizz Air at 86.5%.

The rolling figures for the financial year show Ryanair's load factor running at 94%.

Graham's view: the market will have priced them in already, but today's figures are unambiguously positive. Ryanair also runs a net cash position (€0.6 billion as of Sep 2024) even while buying back shares in large quantities and paying dividends. Ryanair's shares trade at a premium to its peers and rivals, e.g. RYA is at 12x while EZJ is at 8x.

Volex (LON:VLX) (£497m) - Deferred consideration for acquisition - GREEN

This is a good news update: a Turkish business acquired by Volex in 2023 has hit its initial EBITDA targets.

The result is the payment of €10m (£8.3m) in cash to the vendors, along with 2.9 million new VLX shares (value around £8m at the current share…

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JimMcLad

3rd Jan

Patrickmylnetrade

Volex (LON:VLX) I’m a holder and topped up recently. Good to see they weren’t prepared to overpay for TT and walked away.

Murat is obviously performing well and cross-selling to their existing customers will benefit other parts of the Volex group.

I'll hold and wait for the 'ahead of expectations' announcement.

Spender71

Haha. Nothing like hands-on reporting. Thanks.

We need this type of foreign correspondent reports!

Lots of old ladies in China though.

Brilliant, thanks.

archibold

Happy New Year all! Quick question on a quiet day, the scheme of arrangement has paid out for Tritax (Tritax EuroBox (LON:BOXE^L24)). Any thoughts on similar that I can further investigate as a replacement? Had a quick look at Schroder European Real Estate Investment Trust (LON:SERE), but seems to have some adverse on potential french tax, which is not something i necessarily need. That said it looks to be trading on a decent discount after recent falls.

I found this thread useful as well (https://www.stockopedia.com/co...) led off well by the ever insightful Ken Mitchell....but is a bit dated now.

Thanks in advance!

timarr

Hi archibold

Ask on the monthly Investment Trust thread - here: https://www.stockopedia.com/co...

But agreed, the Schroder European Real Estate Investment Trust (LON:SERE) tax situation and the lack of provision for it makes it hard to invest there at the moment.

Thanks timarr! You mean there is more than one place to post things on stockopedia, who knewo? :)

Cricketfan

Tritax EuroBox (LON:EBOX^L24)

On this general subject, there is an interesting comment in today’s Investors Chronic, re SEGRO (LON:SGRO), Slough Estates as was, and their new £350m investment in 3 data centres and the premium rental that these will command.

tom stokes

Patrick & Jim

Volex (LON:VLX) is my largest holding.

I have a lot of confidence in Nat and as the largest shareholder he has a vested interest to ensure further success.

Problem with SP is there probably not be any more financial information until April and price seems to drift downward till March.

I intend to add but will wait.

I do hope the recently mooted take over does not happen as there seems great concern if company adds to its debt pile in current uncertain world markets especially EVs

Tom

rmillaree

Volex (LON:VLX)

people say volex is going great guns but the trending forecasts for this year and next on stocky show that the expected earnings have been subject to a dripfeed of reductions for this year and next over the last 12 months.

is this not at odds with the narrative coming from the company ?

so if they are doing well why are these numbers trending downover ?

Cancun

The EPS is still increasing by 15 % each year, rather than the previously forecasted 20 %... that seems slightly nit-picking considering what has been thrown at the economy in the last 6 months IMHO... I wish that all my other holdings were increasing at such a healthy clip ... I hope that Nat Rothschild will under promise and over deliver...

it is nitpicking indeed to a degree so not a huge issue. Note you have to be careful ref trend though if trend looks like it will continue in same direction.

For example 2025 expectations back in October were for 0.365$ eps for 2025 year - we now have 0.365$ eps expected for 2026. To me thats suggests nil growth 2026 compared to position expected back in October - even if it will be actual growth due to paring back both sets of numbers.

Note its still levels well above prior years - but practicably speaking the trend at the moment if stocky is correct is downwards. No biggie but personally i prefer companeis to under promise and over deliver when they are promising growth - i am kinda nitpicking a bit here as the economy certainly aint booming at present and i understand that there is probably external reasons why the figures may have slipped - a reversal of the downward trend would be nice though. Should they have perhaps tamed expectations so as not to reduce them later ?

Richard Goodwin

I've only flown once with Wizz Air Holdings (LON:WIZZ) and it was pretty terrible. That doesn't mean it's a bad investment though...

Kev

Note how most major shareholders have been topping up their holdings since the November SP drop. They clearly see value at these levels. I hold

yiannos1

I have never quite understood the investment case after this has reached the £4 mark.

With a forward 2027 EV/FCF at 20X is not the cheapest listed stock on the LSE.

Hopefully for all here is not going to be the next Bumi!

All the best

It kind of makes sense whilst they are increasing sales and acquiring other entities that the FCF wont match earnings. No one really knows how the mop will flop ref the future but everything looks on track ref investments paying offf.

there is two ways to skin a cat - if one doesnt have any reason to not believe the actual earnings are real then it all does look fine and dandy to me.

Perhaps if they take pause for breath now ref acquisitions then the FCF metrics should be expected to start to improve pretty soon?

I have not quite got round to buying here - there are expected big jumps in profit and when acquisitions are at play its always slightly more risky tyhat the new stuff will deliver as expected. Looks like they are solidly on target to hit some very decent numbers this year overall (compared to prior years) so i think some of the risks are subsiding in that regard unless they go on another spending splurge - that is very possible if not probable. Overall they have done a decent job of building the steps for future higher profits and the all important free cashflow (per share)

I am talking about 2027 FCF!

Thanks

5th Jan

I havent really looked at this company in detail - so i am guesing you will have more clue than me why FCF in that year would be less than profits being generated (my presumption that is the case) - not sure what forecasts are for that year either but i would be surprised if they expected profits to drop.

for anyone interested the two Pauls have covered this company on their latest podcast recently (vox markets you tube) - they did mention that Volex that there might be tariff headwinds for Volex so that might be creating some short term uncertainty i hadent really thougfht about.

Rhodie Jonners

I did hold but it was one of my AIM holding that I chopped pre budget and don’t see the need to rush back in. I am slightly surprised by their lack of recent progress. Although EV car sales have slowed the building of the infrastructure has not. Additionally, with the boom in AI, what is definitely required is high speed data centres and lots of them and that means miles of specialist cabling. Both of these should have really driven earning but it doesn’t seem to be filtering through to the share price yet. I’m happy to sit on the sidelines for now but I do recognise the quality metrics so expect to buy back in at some point.

Daily Stock Market Report (Fri 3 Jan 2025) - WIZZ, RYA, VLX

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Graham Neary

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