Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
I would appreciate if anyone can advise if HSW Dividends are subject to Irish withholding tax. I feel cheated when dividend payments are made and the first knowledge of withholding tax is when I see it on my payment advice. I've tried to find somewhere that identifies shares subject to non uk tax but have found it confusing and difficult to identify specific shares. Thanks in advance.
I notice last year a trading update was provided on the 15th October. Assume one must be due soon ?
I brought back in on Thursday in hope of good news regarding International travel only to see it plummet in the run up to Fridays news.
Good to be back in the blue and hoping to get back over £1 in the near future.
The long term future as COVID retreats is promising.
I don’t think the results next week will be as bad as some might think. Try booking into a hostel at the moment and you’ll find they are often full (although capacity may be reduced). I have done searches for hostels around the globe. You will regularly find a blog with reports of their local hostels. Nearly every time the link in the blog takes you via hostelworld to a booking. Very impressive. Good marketing. I can appreciate why they still have fees in these difficult times, I’m assuming it’s mainly advertising costs. I think this is a good investment at a bargain price. Hoping to double my money in a year - won’t get that return from Lloyds or HSBC.
Increased their stake by a further 1% last week. Price action was very positive towards Fridays close.
I see to a good stock to be in
Fat cat bonuses and shareholder revolts. Also poor Q1 revenue. Yet share price rises today.
Revenue has fallen off a cliff as you would expect (81% down compared to 2019) so really it’s a question of how quickly HSW can get back to business and does it have cash to see it through.
They had €18.2m cash in December but I’m a little concerned that the total admin costs for 2020 was €36.1m and this was after considerable belt tightening.
If Europe opens up in late summer then I’m not too concerned; however, there’s a real risk of this third wave making the summer a write off and then we’re into the next academic year when a lot of young people will be more keen on reuniting with university friends than on travelling.
The company has access to a €30 million term loan facility so I’m not suggesting that they cannot survive. At the same time, I’m not so keen to invest at this time. I’ll sit it out and see how this third wave of the virus plays out.
Hi guys
I nothing about this company, but i do own shares in Legal & general who have just raised their stake in HSW from 3 to 4% . LGEN are not idiots, they must see potential to make a return on their investment. I fancy a speculative punt myself because of this, any advise would be appreciated
Cheers
HSW starting to pick up a bit with ABnB float, $86bn v $125m HSW
At 71p, this is up 40% in under a week and sitting on the 200d moving average, next stop 90-100p.
A good day for HSW
Here's another interesting article on this stock - https://thecollective.finance/2020/10/hostelworld-hsw-l-travel-restrictions-aside-could-the-management-be-doing-more-for-shareholders/
Sorry, I meant to mention that I have seen that two pro contributors on Seeking Alpha seem to have picked up on Hostelworld, I am not a premium subscriber so cannot access those particular articles there but I'd assume that both are positive. Nice to see the word spreading.
https://seekingalpha.com/symbol/HSWLF
It was interesting in the Easyjet update today that they reported a load factor of 76% on the flights they are running, far higher than I would have imagined them achieving in today's angst-ridden world of travel. That kind of figure would seem to support the thesis of the article just posted, that people, I'd guess particularly younger people, will be itching to get travelling and backpacking again. Locked-up university students perhaps most of all!
Post Lockdown the Millennials and the Zoomers are going to get out and explore – Hostelworld (HSW.L) has 200% upside on a 2 year view.
Post lockdown there will be major demand for the young budget conscious traveller to explore, socialize and interact. By the new year, global youth will have been starved of ‘experiences’ for close to 12 months with significant disruption to their lives and often trapped at home. Pent up demand for a budget hostel and backpacking is significant once lockdowns dissipate. This month, September 2020, Hostelworld released an interesting survey based on a survey of over 3,000 backpackers. The main points a) 52% are ready to travel within 6 months b) 55% expect international travel to be available in 2021 c) 56% of Americans were planning to travel domestically. Given restrictions domestic and short haul has represented 2/3rd of its booking for Americans, British, German and French nationals. However, they need flexibility given the uncertainty and Hostelworld has accommodated with non-refundable but flexible rate.
The company benefited from a capital raise in H1 of 15mn euro and has very little long term debt at 3.5mn euro (but, like a lot of businesses payables have grown to 17mn euro with employer contributions being a big driver). However, these obligations are more than covered versus 33mn euro cash on balance sheet at the end of June. This means the cash on balance sheet remains close to 50% of its market cap. The cash burn in H1 was controlled (thanks to a reversal in working capital and pushing out payables). This will mean the equity value is supported with a high net cash position.
What is Hostelworld worth?
Lets look at revenue multiples as earnings have been decimated. Historically the company has traded around 2 to 3x Revenue (EV/trailing revenue).
When the revenue growth rate was higher in 2015 to 2018 the market afforded it a multiple of 4x EV/Revenue.
Analysts expect that by 2022 it will have recovered its 2019 revenue of 80mn euro. We believe the pent up demand to go backpacking will be significant.
Let us be conservative and put Hostelworld at 2x trailing revenue for 2022, this would imply an enterprise value 160mn (2x revenue). If we add back net cash of 30mn this points to an implied share price of 1.7 euro versus 0.59 euro currently (note the liquidity is on the UK line, 55 pence).
Conclusion
Hostelworld is an industry leader, with cash on the balance sheet to deal with an extended lock down. We believe the shares offer 200% upside on a 2 year view. The youth will go travelling again and a travel lockdown will not continue indefinitely. Now is the time to start accumulating.
Can't post the link for some reason! it's on www. thecollective.finance
Read this today, makes sense so bought some Hostelworld as a hold. https://thecollective.finance/?p=67
With hindsight it was a good decision to get numpties to pay 72p. What I don’t get is the logic today issuing bonus shares in lieu of a dividend?
**** poor effort by the board, this should be available to retail investors. They will be the ones who profit while we sit on a lower share price. Not happy
This should also be available via Primary Bid as is now becoming common practice. Very poor from the board and the broker not to make this available as an option, looks like treating private investors with contempt and needs to stop as a practice as per all the recent press coverage
Watch out for possible merger & acquisition in this space also.
Its a good value e-commerce stock in the portfolio sub £1