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WPP fall

Practical discussions about equity High-Yield Portfolios (HYP) for income
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Arborbridge
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WPP fall

#199943

Postby Arborbridge » February 8th, 2019, 3:12 pm

Looking around for my next top-up, I notice a rather heavy fall in WPP yesterday.

Is there any news that could account for this 8% drop?


Arb.

idpickering
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Re: WPP fall

#199944

Postby idpickering » February 8th, 2019, 3:23 pm

Arborbridge wrote:Looking around for my next top-up, I notice a rather heavy fall in WPP yesterday.

Is there any news that could account for this 8% drop?


Arb.


Can’t remember the name of the share, but a company in the USA put out a bad report about loss of advertising. That share went down a lot more than WPP.

Ian.

OLTB
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Re: WPP fall

#199945

Postby OLTB » February 8th, 2019, 3:26 pm

Hi Arb

I am aware that WPP's rival, Publicis, published lower than expected 4th quarter earnings and that seems to have had an effect. Here's one of the news stories http://prolificlondon.co.uk/news/market ... nings-fall

Cheers, OLTB.

moorfield
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Re: WPP fall

#199947

Postby moorfield » February 8th, 2019, 3:29 pm

Arborbridge wrote:Looking around for my next top-up, I notice a rise in WPP yield yesterday.

Is there any news that could account for this 0.7% point increase ?


Arb.


Fixed that for you ;)

Market concerns about the "old media" sector following Publicis disappointing results yesterday. It's certainly an unloved share currently, an attractive entry point perhaps.

idpickering
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Re: WPP fall

#199948

Postby idpickering » February 8th, 2019, 3:35 pm

I hold WPP, and sometimes regret buying into it. A bit of diworsification on my part.

Ian.

blobby
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Re: WPP fall

#199949

Postby blobby » February 8th, 2019, 3:42 pm

I think WPP has moved even further into the area for potential HYP buying because of this:

https://seekingalpha.com/news/3430307-ad-giants-slip-publicis-revenue-disappointment?dr=1#email_link

Ad giants slip after Publicis revenue disappointment

Feb. 6, 2019 1:28 PM ET|About: WPP Plc (WPP)|By: Jason Aycock, SA News Editor

Ad-industry giants are moving lower today after Publicis Groupe (PUBGY -7.1%) fell short on its organic revenue, which declined amid marketing budget cuts from its consumer-goods clients.

WPP is down 3.5%; Interpublic Group (NYSE:IPG) is 5.8% lower and Omnicom Group (NYSE:OMC) is down 4.9% today.

Along with a 0.3% decline in organic revenues, well short of expectations for 2.5% growth, Publicis forecasts a "bumpy ride" for Q1 due to the client attrition.

Next up to report among the Big Four is likely IPG on Feb. 13.


At at p/e of 5.6 and a yield of 7.5% this looks amazing value. However, I can’t yet bring myself to invest. The Net Tangible Asset Value per share is -434p (share price of 801p). In advertising I can’t understand why all the key people don’t just move and start up another WPP without debt, i.e. what are the barriers to entry?

simoan
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Re: WPP fall

#199962

Postby simoan » February 8th, 2019, 4:30 pm

blobby wrote:At at p/e of 5.6 and a yield of 7.5% this looks amazing value. However, I can’t yet bring myself to invest. The Net Tangible Asset Value per share is -434p (share price of 801p). In advertising I can’t understand why all the key people don’t just move and start up another WPP without debt, i.e. what are the barriers to entry?

You pretty sound bullish but have not mentioned the Net Debt increased to just short of £5bn at the last update which is 3.7x forecast net profit. If net profit falls much further the debt will start to look very burdensome, which it is already frankly. And surely the market is saying the EPS value on which you are basing your P/E value is wrong. My numbers tell me the P/E is around 8x on current EPS forecasts, which could also be lowered of course.

As for NTAV, what are these assets? If the brown stuff and the fan were in close proximity would they really be worth 434p?

Si - Chief advocate of the devil

Arborbridge
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Re: WPP fall

#199969

Postby Arborbridge » February 8th, 2019, 4:48 pm

Thanks, folks. Those results explain everything; a shame really as it looked as though WPP was having some respite from bad news - now it catches a cold from a "read across".

Arb.

monabri
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Re: WPP fall

#199984

Postby monabri » February 8th, 2019, 5:13 pm

OLTB wrote:Hi Arb

I am aware that WPP's rival, Publicis, published lower than expected 4th quarter earnings and that seems to have had an effect. Here's one of the news stories http://prolificlondon.co.uk/news/market ... nings-fall

Cheers, OLTB.


Yes, it was ze French that done it!

blobby
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Re: WPP fall

#200205

Postby blobby » February 9th, 2019, 8:58 pm

simoan wrote:
blobby wrote:At at p/e of 5.6 and a yield of 7.5% this looks amazing value. However, I can’t yet bring myself to invest. The Net Tangible Asset Value per share is -434p (share price of 801p). In advertising I can’t understand why all the key people don’t just move and start up another WPP without debt, i.e. what are the barriers to entry?

You pretty sound bullish but have not mentioned the Net Debt increased to just short of £5bn at the last update which is 3.7x forecast net profit. If net profit falls much further the debt will start to look very burdensome, which it is already frankly. And surely the market is saying the EPS value on which you are basing your P/E value is wrong. My numbers tell me the P/E is around 8x on current EPS forecasts, which could also be lowered of course.

As for NTAV, what are these assets? If the brown stuff and the fan were in close proximity would they really be worth 434p?

Si - Chief advocate of the devil


Hi Simoan, I think you may have mis-read my post. I quoted NTAV as -434p (minus 434p). I'd describe myself as bearish on WPP (for what that is worth).

monabri
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Re: WPP fall

#200229

Postby monabri » February 10th, 2019, 12:10 am

Some figures on WPP's debt.. this from Simply Wall Street ( which it claims it took the data from WPP's company filings). Is debt reducing?

Code: Select all

Date (Data in GBP Millions) | Total Equity | Total Debt | Cash & Short Term Investments
                 2018-06-30 |     9,993.50 |   6,852.90 |                      2,221.00
                 2018-03-31 |     9,993.50 |   6,852.90 |                      2,221.00
                 2017-12-31 |     9,962.00 |   6,874.50 |                      2,391.40
                 2017-09-30 |     9,962.00 |   6,874.50 |                      2,391.40
                 2017-06-30 |     9,856.60 |   7,525.50 |                      2,856.00
                 2017-03-31 |     9,856.60 |   7,525.50 |                      2,856.00
                 2016-12-31 |     9,767.60 |   6,567.40 |                      2,436.90
                 2016-09-30 |     9,767.60 |   6,567.40 |                      2,436.90
                 2016-06-30 |     8,978.20 |   6,396.30 |                      2,147.40
                 2016-03-31 |     8,978.20 |   6,396.30 |                      2,147.40
                 2015-12-31 |     8,015.80 |   5,593.20 |                      2,382.40
                 2015-09-30 |     8,015.80 |   5,593.20 |                      2,382.40


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