Plus 500 Results due 14/2/18 for year end 31/12/17 now new napp for 2018 portfolio

Wednesday, Nov 25 2015 by
9

I first spotted this stock last October and purchased some shares in the company. It fits the William O'Neil's screen and I noticed he bought in Feb 2014. It is an AIM stock and doing really well. I have increased my holdings 4 times since then. This must be the best stock I have bought so far. First quarter figures are out today with excellent results, pushing the shares still higher.
The customer base and the sales figures still keep increasing.

As I am not a particularly good writer perhaps someone else would care to comment. I would welcome Paul Scott's view.
Cheers Lightningtiger


Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


Do you like this Post?
Yes
No
12 thumbs up
3 thumbs down
Share this post with friends



Plus500 Ltd is an Israel-based online provider of Contracts for Difference (CFDs). The Company develops and operates an online trading platform for retail customers to trade CFDs internationally over more than 2,200 different underlying global financial instruments comprising equities, indices, commodities, options, exchange-traded funds (ETFs) and foreign exchange. The Company enables retail customers to trade CFDs in more than 50 countries and in over 30 languages. The Company's trading platform is accessible from multiple operating systems, such as Windows, smartphones (iOS, Android and Windows Phone), tablets (iOS, Android and Surface), Apple Watch and web browsers. The Company conducts operations in the European Economic Area (EEA), Gibraltar, Australia and certain other jurisdictions across Asia, the Middle East and elsewhere. Its subsidiaries include Plus500UK, Plus500AU, Plus500CY and Plus500IL. more »

LSE Price
1179p
Change
-1.0%
Mkt Cap (£m)
1,357
P/E (fwd)
8.6
Yield (fwd)
6.9



  Is Plus500 fundamentally strong or weak? Find out More »


180 Posts on this Thread show/hide all

lightningtiger 12th Feb 161 of 180

Now another brokers licence to trade in Singapore which is another window of opportunity for expanding their business. We could see another breakout above the 1200p mark with yet more customers trading with Plus 500.

| Link | Share
lightningtiger 14th Feb 162 of 180

Results out today Revenues +33% ahead of market expectations.. Earnings +72%. New customers up 136% to 246,946. Active customers +103% to 317,175.
Dividends declared $164.9M XD 22/2/18 @ $1.4479 (that is over a £1.00 but subject to $/£ fluctuation at payment date of 23/7/18. This will be the highest dividend payment paid so far by Plus 500.Cash position $241,854.

| Link | Share | 1 reply
daveinthelakes 14th Feb 163 of 180

In reply to lightningtiger, post #162

Minor typo but cash is not $241,854 but $241.8M

| Link | Share
Scoobydoit 14th Feb 164 of 180

No way were these results priced in. Profit taking on ESMA fears ?

| Link | Share
Edward John Canham 14th Feb 165 of 180
1

At 2nd January 2018 the SP was 881p prior to the trading update - the SP is 1152 as I write - an increase of 30%.

I think a good slug of these results were priced in but not all.

IMHO the market is now deciding to sit on the fence a bit awaiting two resolutions:-

1) Regulation. Seen comments from both Plus500 (LON:PLUS) and IG Group (LON:IGG) that won't materially effect profits but the uncertainty remains.

2) Which business model is going to work. IG Group (LON:IGG) going for the high-rollers, Plus500 (LON:PLUS) a volume play.

I now sit on the fence.

Phil
Phil

| Link | Share
lightningtiger 14th Feb 166 of 180
1

I missed stating the net profits from Stocopedia estimates of $185.3M to $199.7M in results today and with about 15 % of extra business coming from crypto trades, I recon now it must be well over $200M mark by now.because of the extra customer numbers. and two new markets to trade in.
I should have got "off the fence " and top sliced @ around the £13.00 mark & bought back in again towards the end of trading. A bit of a surprise that the 3.48M shares traded today slightly down after such excellent results, but the true value has got to be up and increasing.
The Q1 2018 results should reflect this in due course.

Liberon Capital has a target price of 1507p and Vector Vest has a fib retracement of 1250p, which it reached today and the valuation of 1586p.

Stockopedia Rank is now at 95.

| Link | Share | 1 reply
tomg23 14th Feb 167 of 180

In reply to lightningtiger, post #166

Shares under heavy distribution today. Instas offloading while the going is good. I think you will have a lot more of this on the way up which may hold back the share price in the short term while the reg risk is ongoing.

| Link | Share
abtan 14th Feb 168 of 180
1

Having been a previous Plus500 (LON:PLUS) holder I thought some might find the following bear comments useful:

  1. 15% of FULL YEAR revenues came from crypto, which equates to c$66m. That's about 50% of Q4 revenues ($132m), which will likely not be repeated. Without it 2017 profits might not have been much higher than those reported in 2016. In other words Plus got lucky last year.
  2. Average # of New Customers per quarter from Q12016-Q22017 (i.e. prior to the crypto craze) was c.26,000. This contrasts with the 150,573 that were on-boarded in Q4 alone. I expect a lot of churn in the coming months.
  3. Average # of Churned Customers per quarter from Q12016-Q22017 (i.e. prior to the crypto craze) was c.25,000. 

I just cannot see where growth will come from.

| Link | Share
lightningtiger Thu 12:07am 169 of 180

Heavy selling today to take profits.
Abtan, in order to answer your 3 bear points, point 1. the crypto trades were about 15% which was extra business. In fact from their company report you will see that 86% of business was from profitable trades & 15% may well be a lot less than that. Plus 500 has now got over twice the number of existing customers than last year.
Point 2.regarding churn, again from the report that churn is reducing in 2017 from 2016 and in any case the customer numbers now, both new and existing are the highest they have ever been.
Point 3. those assumed figures are now history and again see the report of reducing churn.
Regarding compliance and regulations, they now have 240 permanent staff to make sure that they are compliant with all the rules.
The board expects revenues for the year ending 31/12/18 to be significantly ahead of market expectations. In addition to that they are expecting to open other global licences to trade this year.
The growth will come from the customers in larger numbers and they are aiming to be the top CFD provider.
Fib retracement now showing price of 1405p.

| Link | Share | 1 reply
abtan Thu 9:22am 170 of 180
1

In reply to lightningtiger, post #169

Morning

I'll address your rebuttals in turn:

  1. I'm not sure what you mean about "15% of extra business." The statement clearly said 15% of revenues. Not 15% of Q4 revenues, or 15% of profitable revenues. So crypto revenues were $66m for 2017 (Total Revenue: $437m), or 50% of Q4 revenues (Q4 Revenue: $132m).
  2. "Plus 500 has now got over twice the number of existing customers than last year." Of course they do. This is the point I'm trying to make. They've gone from on-boarding 20,000-30,000 new customers a quarter to 150,000 customers in Q42017 alone. This is a crypto-influenced anomaly.
  3. Churn is all over the place each quarter, with no underlying upward trend. Q1 2014 to Q2 2017 churned customers per quarter is as follows: 19,520, 24,335, 9,955, 12,029, 15,763, 32,388, 18,936, 19,315, 9,977, 25,000, 26,143, 20,597, 22,104, 22,972, 28,408, 21,319.
  4. I don't understand the focus on global licenses. When Plus had issues with UK authorities they simply directed new customers to sign up via the Cyprus License ie the EU is covered. They already have access to most of the major markets as far as I recall.
  5. Market expectations according to Stocko are revenues of $439m. Seems low. Do you have an updated figure?


I'd like to add that Plus are always extremely bullish in their statements, unlike the other providers, who appear to paint a more realistic picture of their and the industries situation.

| Link | Share
lightningtiger Thu 12:51pm 171 of 180

Have a look at the Plus500 report just out, and you will see on the page 86% of profitable trading the spike in crypto trades.I did say about 15%, it may be less but it is certainly extra business for them. That covers your point 2.it is a bit of extra business coming in.Your numbers relating to churn has to take into account of extra customer numbers as time moves on and taken as a percentage of customer numbers to get a clearer picture of how it is improving. Again it shows in the report improvement from 2016 to 2017.
Regarding global licences, each country has it's own rules and regulations to run with regarding trading CFD's & therefore they want to add more countries worldwide to trade in.
Actual figures for end of 2017 revenues are $437,238 from the report.
Plus has now got the regulators rules correctly in place to trade which caused problems in the past.
So now why should they not be bullish about their company?

| Link | Share | 1 reply
abtan Thu 6:29pm 172 of 180
1

In reply to lightningtiger, post #171

Plus500 (LON:PLUS)

I presume the 86% (of profitable trading days in 2017) you're referring to is Page 21 of the PowerPoint Presentation, published Feb 14th 2018 (link)

Here's a screenshot of that graph for any interested:

5a85c9c883031Plus.JPG


I keep getting the feeling that you're making my points for me.

Yes, therewas a big $10m profit spike for "crypto volatility" at the end of year.

As for this being "extra business", you're completely correct, it was a one-off profit spike. What I'd be more interested to know is what profit would have been without this "extra business". Based on the 15% crypto-influenced revenues, I personally believe profits would have been much lower for 2017.

On a related note I'd also be interested to understand what the material negative spike in October 2017 relates to - this has inconveniently not been labelled.


You also make a good point on churn. I can't be bothered to reproduce all the figures here but on average since Q1 2014 churn per quarter has been about 33% of opening customer numbers. To me that is high. Excluding the last 2 quarters of 2017, average new customers per quarter was 39%. Fingers crossed for shareholders they keep the average 6% gap going.


As I don't hold, I don't feel like commenting further on the recent results, or Plus500 (LON:PLUS) in general. I only made the above comments as 95% of comments I have read have been positive and don't seem to factor in any of the above (and IMHO, highly relevant) bear points. For holders, fingers crossed that I am wrong.

A

| Link | Share
lightningtiger Thu 9:13pm 173 of 180

Thanks Abtan for your valuable points on the negative side & being able to bring up the 86% profitable days graph.I do not know how to do that. Looking at the graph again, the first half seems to be averaging about $2M a day, but the last quarter including the down points seems to be averaging much higher at about $4M a day as can be seen with solid blue covering most of the $2M line. This is a sharp contrast from the beginning of the graph which is less than $2M a day.
So taking all the positive and negative points into account & having discussed it at our investment meeting today we will be still holding onto Plus 500 and others considering opening new positions & collecting the dividends of over 8% (rough calculation £1/£12) You can get the actual facts from dividenddata.com & look for the AIM.. Obviously if you have been a holder with an entry point of £5.00 then the dividend would be worth 20% (£1/£5) and the capital would have more than doubled over that time frame.
Please DYOR and calculations.

dividenddata is currently showing with the tab dividend impact 8.81% @ 117.5p

| Link | Share | 1 reply
abtan Thu 9:59pm 174 of 180

In reply to lightningtiger, post #173

I saved a screenshot to my desktop and then added the image using the Text Editor function.

Also, the graph is from 2013-2017, not just 2017

| Link | Share
lightningtiger Thu 11:59pm 175 of 180

Perhaps the most striking change is shown in the KPI section in their website as a bar chart ,which will have to make huge strides forward.
Active customers increased 103% from 155,956 to 317,175.
New customers increased 136% from 104,432 to 246,,946
Total increased customers.......    from 260,388 to 564121 That is an extra 303,733 customers.
That has to have a massive impact to revenues, profits, dividends, & market cap now standing @ $1.86BN

| Link | Share | 1 reply
daveinthelakes Fri 8:42am 176 of 180

In reply to lightningtiger, post #175

Do they provide info on the geographic locations the new customers are from ?

I see house broker Liberum put out a new target of 1507p following the results.

| Link | Share
atali1 Fri 10:30am 177 of 180
2

The October $4 mil negative spike was due to cryptos.
Bitcoin was up 25% on the 12th October with everyone long.
Since then PLUS introduced a raft of measures to limit their exposure through cutting contract sizes, increasing spreads, increasing premiums, lowering leverage and shortened expiry dates.
You can see that in Nov/Dec when the really big influx of customers happened PLUS didn't experience as big an impact again. Clearly their measures were effective.
Other CFD providers suffered heavy losses (XTB, Trading 212). IG closed down their crypto books and it took them till January to get them going again.
I have been very impressed by the proactive risk management PLUS had during an incredibly volatile time in cryptos.
And the boom in cryptos is by no means over. The current "crash" was was less severe than all previous big crashes and cryptos have bounced back strongly recently.
Plus were able to take advantage of the market conditions through targeted marketing which gave them a strong edge over competitors.
Is a crypto customer less likely to remain then one who doesn't trade cryptos? I don't know so I think churn may be at similar levels % wise to what it has previously been.

| Link | Share
lightningtiger Fri 3:45pm 178 of 180

76% of business has been coming from Europe which is shown in the latest results.I think that the crypto extra business should be taken as extra icing on the cake for them. There will always be punters out there wanting to "try their luck" trading them.
The good news from Stockopedia is we now have a Stock Rank of 99, Quality increased to 94 & Value increased to 72 and now, for the first time ever 10 screens. 50day MA 14% 200day MA 41.7% and a strong brokers trend showing a strong Buy.

When you think that Lloyds have been paying just 1p in dividends, it makes you realise how good this dividend really is.

| Link | Share
lightningtiger Sat 1:39pm 179 of 180

Now 11 screens and ODEY buys more shares.

| Link | Share
lightningtiger Tue 11:36pm 180 of 180
1

Fib retracement is currently showing 1405p target price & valuation 1650p.With the XD coming up the share price will come down by about 100p, which is roughly the dividend payment for later in the year. This could be a choppy ride for the share price.for a while until Q1 results come in.

| Link | Share

What's your view on this thread? Log In to Comment Now

You can track all @StockoChat comments via Twitter

 Are Plus500's fundamentals sound as an investment? Find out More »





Stock Picking Tutorial Centre



Let’s get you setup so you get the most out of our service
Done, Let's add some stocks
Brilliant - You've created a folio! Now let's add some stocks to it.

  • Apple (AAPL)

  • Shell (RDSA)

  • Twitter (TWTR)

  • Volkswagon AG (VOK)

  • McDonalds (MCD)

  • Vodafone (VOD)

  • Barratt Homes (BDEV)

  • Microsoft (MSFT)

  • Tesco (TSCO)
Save and show me my analysis