Last week we got a great crowd of retail (and professional) investors down to the Holborn WeWork to pitch their best investment ideas. It was a night of good fun, tasty pizzas, and great ideas.
If you’ve never been to one of our StockSlams, they are worth checking out. Retail investing can be a rather solitary pursuit, so these events are a great way to meet and swap stories with fellow enthusiasts.
We recorded the whole thing and have transcribed it below. Hopefully this gives you an insight into what to expect if you’d like to make it to the next one. Either way, reading through these pitches is sure to bring a couple of new investment opportunities to your attention.
Thanks to Damian Cannon for hosting the event and to all the speakers and listeners!
Topps Tiles (TPT)
When I’m looking at an investment for the first time I almost always start by looking at the Stockopedia StockReport. Here we have Topps Tiles, a retailer that is probably familiar to most of you. Now high street retailers are in a bad place, and have been for some time, but I think that there will be winners and losers. Topps Tiles is no exception and you can see here that earnings have been falling for almost 5 years now. However I think that there is room for some optimism at last.
For a start analyst forecasts point to a 25% improvement in earnings this year with further growth in 2020. Given a P/E ratio of around 10 and a dividend yield above 5% this suggests that we’re getting some cheap growth here. The business also has some reasonable quality metrics with ROCE above 20% although including lease obligations does bring this down to around 11%.
So what’s changed with the business? Well Topps has always sold into the retail and trade markets with sales roughly equally split between the two. Recently management have expanded into the commercial market on the back of an acquisition which opens up a whole new line of sales. In addition trade sales are increasing while the store estate is being carefully managed to optimise their retail exposure. With the average unexpired lease term coming in at around 4 years they are in a good position to close loss-making shops.
Then there’s the recent Q3 update where like-for-like sales were…
.jpg)
.png)
