LON:GBO^J17 | Globo PLC - Buy Signal

-->

11th Jun '15 by Pcarrallo10

12 comments 16359 reads

Globo Plc provides multi-platform enterprise mobility management and telecom software solutions worldwide.

http://www.globoplc.com/

Historic peak in the last 12 months?	Yes
Spread <1%?	Yes, 0.8%
Exchange market size?	20,000 shares
What is my max spending according to EMS?	20,000 * £ 0.63 = £12,600
Is EBITDA Positive?	Yes, 55.92 m
Market Cap	235.42 m
Is Market Cap / Ebitda < 20?	Yes, 235.42 / 55.92 = 4.21
Debt	-44.85 m
Is debt smaller than 3 times EBITDA?	No debt

Make sure to check out my trading strategy at http://www.stockopedia.com/content/trading-made-ea...

Unlock with Email

Unlock with Google

Already have an account?
Login here

About the Author

Pcarrallo10

Premium Member

12 comments

Rusty2

11th Jun '15

Hi Pablo,

Have you read Paul Scott's blogs on Globo, if not I urge to do so before investing. You can find them under the discuss button on the Stockreport.

DVB99

11th Jun '15

surely the best is to buy low sell high, not buy at a high???

Pcarrallo10

11th Jun '15

herbie47 thanks for the tip, it is really very interesting. Someone to follow no doubt.

There are also positive points of view (https://uk.finance.yahoo.com/news/why-d-buy-globo-plc-130341363.html) but, of course, the more information you get, the better chances to succeed in stocks picking.

Pcarrallo10

11th Jun '15

From my point of view, when a stock is in 52 week breakout, there are some chances to go up because people are pushing upward because maybe they know something we don´t.

Buying low and selling high is the ideal, who knows what the stock will do in the future, maybe this point was a good slow entry in a year.

Rusty2

11th Jun '15

The problem is they are taking the figures as gospel, if you can dig deeper into the balance sheet like Paul does you can uncover certain things.

Pcarrallo10

11th Jun '15

The fact is that there are many analysts who are based just on technical analysis, others exclusively in fundamental, and a third group in both, as in my case.

For this stock, by technical analysis, it is in 52w breakout, the overall numbers look good but, it is true, the deeper you dig the better you will have chances to win.

Rusty2

11th Jun '15

Yes the more you know the better you can judge. I know Globo has shorters involved in the past and probably still does? I'm sure you are aware of what happened to Quindell (LON:QPP), Plus500 (LON:PLUS),

The other problem for Globo is its Greek.

GrindertraderUK

11th Jun '15

Hi Pablo

GBO is one of those controversially discussed stocks. It is down to a matter of whether you believe the figures on the financial statements or not and what type of investor/trader you are.

If you believe them, then YES this is a good buy.
If you do not believe them then of course one to avoid.

I am not sure if you are a subscriber to Stockopedia Pro but if the management of Stockopedia do not mind I would like to add in the current rankings in which might be interesting to your investment case.

Much or your strategy is about momentum. The current momentum rank here is 96/100. This means GBO is in the top 10% of all stocks listed in the UK that is on high momentum.

Cross the momentum figure with the high Quality and Value Ranks then you have what Stockopedia terms a high ranked super stock - It is in the top 10% of all UK listed stocks worth a consideration to invest into.

Now all this ranking 'stuff' is too complex for me to explain properly and they are based on the information provided by the financial and trading statement with some other magical calculations behind the scenes. But below is the link which explain it all for you

http://help.stockopedia.com/knowledgebase/articles...

So here is my main point..

According to you strategy that the share price has a good chance of going to new highs, you have found some basic metrics that conforms to your investing check list. The Stockopedia StockRank for GBO appears to make this a 'super stock (?)' and this provides further evidence that this may be a 'good buy (?)'.

Providing GBO is telling the truth!

However you are protecting yourself with using a Stop Loss, just in case at some point, (whether that is in a few months or in a few years) the bubble bursts on GBO!

But by then you may have made good profit due to the momentum AND Stopped out if it goes wrong!

Good luck!

Disclosure:- I have no positions long or short in GBO

Pcarrallo10

12th Jun '15

Hi Grindertrader,

I agree with you. There is always a doubt about if the managers are showing good information.

As they say in their 'Annual Report 2014':

Notice is given that the Annual General Meeting of Globo Plc will be held at 10.00am on Monday 29 June 2015

at Thames Court, 1 Queenhithe, London EC4V 3DQ to consider the following resolutions of which resolutions

1 to 5 will be proposed as ordinary resolutions and resolutions 6 and 7 as special resolutions.

1. To receive the annual report and audited accounts for the year ended 31 December 2014.

We´ll see!

Regards,

Pablo Carrallo

Flackwell

15th Jun '15

Herbie - Globo isn't Greek anymore

dradjackson

19th Jun '15

News today of Globo issuing senior bond notes does seem to back up the sceptical view... why raise money if you are sitting on a €40 million cash pile?

One of my favourite metrics is Price to Free cash flow and Globo is on 40.3 and performing well below industry and market average! Compare this to Zytronic, one of my faves at the min, on 12.2. Market median is 20 by the way... I think you cut to the chase using this metric - how much cash is it making?

Paul Scott

20th Jun '15

Hi,
I am VERY suspicious of Globo (LON:GBO) because of the numerous red flags I have found in their accounts, and other factors such an unexpected/unplanned changes of auditors. Twice.

EBITDA with this company is completely meaningless, as they capitalise so many costs into intangibles. So the real level of profitability is actually very low. You would therefore be making a grave error to value the shares on a multiple of EBITDA, in my view.

What else? The thing that worries me the most, is probably the way the company is so keen to borrow money. Yet it claims to be sitting on a large cash pile. This is completely irrational behaviour. You should perhaps ask the company why, when it has E82.8m cash in the bank, it decided to take out E42.4m in bank borrowings, and thus unnecessarily paid interest payments of E4.1m in 2014. This is a ridiculous situation commercially (to voluntarily pay E4.1m in interest, when you have cash in the bank to repay those borrowings in full).

This raises the suspicion that the cash pile may actually have disappeared somehow (misappropriated maybe?). What other explanation is there for a company taking out fresh bank borrowings, when it has apparently also got stacks of cash in the bank? It suggests there is maybe some sort of restriction on the cash deposits, or that they have been misappropriated possibly?

The debtors on Globo's Bal Sheet also look irrationally high. When I've seen situations like this before, they usually end badly - with big write-offs of the debtors (which means that previous reported profits were bogus, of course).

This share stinks to high heaven, in my view. That's why it's on a PER of about 6 - because the market doesn't believe the numbers, very sensibly!

Just in my personal opinion. I have no position in Globo (LON:GBO) shares. Although I would be more inclined to short it, than go long. Just not yet.

Regards, Paul.

P.S. Please see my detailed notes on the 2014 results here.

Unlock the metrics for all these stocks and more...

Take a free trial

Facebook Twitter Youtube Instagram RSS

This site cannot substitute for professional investment advice or independent factual verification. To use it, you must accept our Terms of Use, Privacy and Disclaimer policies.

Unlock the metrics for all these stocks and more...

Take a free trial

Globo PLC - Buy Signal

Unlock the rest of this article with a 14 day trial

About the Author

Pcarrallo10

12 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...