Apologies but the date is not a misprint. Life has taken a front-seat since I had the pleasure of hosting our second StockSlam of the year! Nevertheless I know that many investors can't always make an event in central London and so I'm happy to provide this cleaned-up transcript of the event. As ever we had some excellent presenters and an engaged audience which made for an enjoyable evening. I hope that you find something educational or interesting from these brief notes of the event.

Stop press: I'm pleased to say that the next StockSlam will take place on July 9th! If you'd like to present, which I thoroughly recommend, please follow the instructions here:  https://www.stockopedia.com/content/stockslam-9th-july-call-for-presenters-479751/

Motorpoint (LON:MOTR)

Okay, here is Motorpoint. Some of you may know this as a car supermarket. Motorpoint floated back in May 2016. As is typical with IPOs it profit warned within the first year. The share price duly halved in the first six months. They blamed this on Brexit. Since that point the business has done well, with margins normalising and sales increasing. The share price did recover back to an all-time high back in June ‘18, but since then the price has drifted down by almost 30%, down to 189p today. This fall is despite an ongoing share buy-back. They’re buying over £10m of their shares and this is continuing. Clearly off-setting this is a fair level of selling pressure in the company. I’m not saying this is necessarily the best time to buy, but at some point the share price fall is going to stall and it’s going to go back up, if the business is doing well.

So what’s the attraction here? Well the ROCE is 80%, exceptionally high, and it has very good cash generation. The reason why the ROCE is high is because it is a very asset-light business and has a very high turnover of cars, which means there’s not a lot of working capital tied up in the stock. Now, what you will also notice is that the operating margin is very, very low at 2%. Ordinarily this would put me right off because that kind of margin means you’ve got a lot of operational gearing with a fixed cost. If your sales fall by a small amount, profits are going to fall by a much larger amount.…

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