XLM another Minervini type stock?

Saturday, Oct 28 2017 by
5


XLMedia (XLM). This stock is showing the chart characteristics that Minervini seeks in his investments. The business appears to be financially sound and to have a "technology moat". Although it was predominantly a betting industry business XLM has expanded into the credit card and cybersecurity industries. This is a strong positive for me as I think that expanding the model into other areas/industries could lead to very significant growth. Their technological expertise is likely to allow them to do this successfully and keep ahead of competitors.

I also like the positive cash position and recent large director purchases. An excellent review of XLM was recently posted on Stockopedia.

https://www.stockopedia.com/content/lsquothere-once-was-an-ugly-ducklingrsquo-ndash-xlmedia-xlm-203107/

I am long in this share and recently topped up during the spurious dip in price caused by the dividend delay (not the fault of XLM and now paid).


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.


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XLMedia PLC is the United Kingdom-based online performance marketing company. The Company focuses on paying users from multiple online and mobile channels and directs them to online businesses who, in turn, convert such traffic into paying customers. The Company's segments include Publishing, Media and Partners Network. The Company owns over 2,000 informational Websites in approximately 20 languages. Its Media division acquires online and mobile advertising targeted at online traffic with the objective of directing it to its customers. It buys advertising space on search engines, Websites, mobile and social networks and places advertisement referring users to its customers Websites or to its own Websites. It manages marketing partners, whose role is to direct online traffic to its customers. Its partner program enables affiliates to have a single point of contact for directing traffic. more »

LSE Price
211p
Change
1.4%
Mkt Cap (£m)
425.1
P/E (fwd)
16.6
Yield (fwd)
3.1



  Is XLMedia fundamentally strong or weak? Find out More »


14 Posts on this Thread show/hide all

Mike888 28th Oct 1 of 14
4

XLM has had a good run, I am also a holder, so I am very pleased with how this stock has moved this year.

However from what I understand of Minervini it doesn't yet meet his criteria as a super performer, specifically from a fundamentals perspective. Although revenue is moving upwards, margins are not really increasing and EPS growth is reducing. So for the moment I don'y think it would tick all the boxes.

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HumourMe 28th Oct 2 of 14
1

EPS growth rate is declining, which might disqualify it from a Minervini screen .

59f45d546e751Capture.PNG

Margin growth might also be questioned. Despite those considerations I bought 11 Sep on a new high.

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bobo 17th Nov 3 of 14

I would think the bigger concern is the intangible and goodwill assets noted at £117m. Given the high level of divi being paid out (which keeps the Director's share value up) there are some interesting questions to be answered.

Using stockopedia's own figures no depreciation has occured since a blip in 2014.

Not a long holder, more a dipper in I suspect

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HumourMe 17th Nov 4 of 14

... and today I was stopped out for a small return (3.5%) despite being 20%+ at one stage. Positive is better than a loss though. Now 50% cash. Expecting one more similar result like this today. But who knows? It might reverse.

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willhampson 17th Nov 5 of 14

I've never dared with a stop for XLMedia (LON:XLM), perhaps that will come to haunt me one day... It is fairly frequently subject to big spikes down, followed by swift rallys up; often coinciding with director buys. I bought some more this morning as I see it hitting new highs in the coming months, and suspect we will see a director buy rns shortly. Could very well be wrong, however...

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Ramridge 17th Nov 6 of 14

RE. XLMedia (LON:XLM) With today's current SP fall, it takes the SP to below the 50-day MA. In Minervini's terms, a signal to think about selling or reducing your holding. But have to say it has been an excellent run since the start of the year.

No position.

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HumourMe 17th Nov 7 of 14

In reply to willhampson, post #5

To be completely transparent I had also a buy stop order in, above the recent highs, the sell stop just got hit first. I'm surprised at the decline from the recent high, but the order did its job. I suspect we are in for a period of market consolidation, where bases form, and give lower risk entry points, if not a decline.

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Edward John Canham 17th Nov 8 of 14

Looking more and more like a defensive quality stock - with the risk of Israel thrown in.

The growth and value stats are mediocre at best.

Guess I'm waiting to see if Mr Weihs wants to risk anymore cash.

Phil

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blondeamon 19th Nov 9 of 14

Hi guys, I cannot find a Minervini screen in Stockopedia. Is there anything similar that shows which shares are for example on Stage 2 of Minervini's guide?

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HumourMe 20th Nov 10 of 14

In reply to blondeamon, post #9

There are a few examples people have put together in the thread here: https://www.stockopedia.com/content/mark-minervini-interview-a-guide-to-superperformance-from-a-stock-market-wizard-173828/
However, I'm aware that the best time to look for bases is towards the end of a bear market or at the beginning of a bull, so personally I'm being very cautious. Another recent entry fell by the wayside today for break-even. Now 56% cash and 5% draw down from peak portfolio valuation.

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nickwild 21st Nov 11 of 14
2

Very positive RNS update today

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HumourMe 21st Nov 12 of 14

In reply to HumourMe, post #10

Examining this from a Minervini perspective, or my interpretation of it, we have just experienced a ‘base’ forming (a period of consolidation/pullback as weak holders transfer to strong holders). The ‘pivot point’ as the previous high was taken out, allows a lower risk entry, if the stop can be placed at a reasonable level. In this case the ‘natural stop’ is the last ‘reaction low’ (where the price zigged, after it zagged) which is about 20% below the breakout price. For me, that is too far, as my average gain is not 40%, although I could adjust position size to reduce risk – but I still would not get the 2:1 odds I’m looking for. For swing traders, today would have been lucrative. Longer term holders will be vindicated.


5a14298a38f9dCapture.PNG


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Ramridge 21st Nov 13 of 14
1

In reply to HumourMe, post #12

Hi Humourme - XLMedia (LON:XLM)
If you are looking at this from a Minervini perspective, Minervini does not hold a long position going into a results or trading update day. He sells his long position before the announcement day. The only exception (according to him) is if he has a good profit margin and he is confident about the share prospects. In this case he would reduce his holding ahead of the news.
Not saying it is right or wrong, simply what he does.

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HumourMe 21st Nov 14 of 14

In reply to Ramridge, post #13

If you are looking at this from a Minervini perspective,

Trying to! I've now read both books twice and have trouble reconciling this statement (which he makes) with some of the spectacular share appreciation examples (which are largely irrelevant if not holding through results). 

If the Minervini focus is though on the effect of compounding many small gains, which is fully compatible with both trading breakouts and not holding into results, then that's a slightly different approach.

I think it'll be a while before I appreciate all aspects that he is trying to convey.

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