10 shares that beaten RIGHTMOVE PLC since 2007

If you bought shares in RIGHTMOVE PLC, ten years ago, on this very day (02/03/07), it would appreciate by 713%.  It isn’t the best performer ranking 22nd overall.

Below, are ten companies with a better (share price) resume than RIGHTMOVE PLC.

P.S. Those who bought RIGHTMOVE PLC during the IPO at £3.35/share, saw their holdings appreciate by 1,113%.

 

Better than RIGHTMOVE PLC

(The following is not in any particular order)

 

ASOS PLC (4,806% in ten years)

The number one online retailer, ASOS would buy you a nice house by now if you invested £20k back in 2007. The shares were trading on £1.12/share. Today, it is over £55/share. It has never paid a dividend, but nobody is complaining.  

ASOS PLC share price chart since 2007

The company was founded by Nick Robertson in 2000. This company success lies in fashion trend and the use of technology to deliver to the younger generation. Also, the use of social media helps ASOS to communicate with its customers.

The last ten years saw a rollercoaster ride for ASOS that caused the company’s share price to experience irrational exuberance. At one point it topped £70 in 2014. But, 8 months later the stock lost 78%, before recovering.  

 

ITEMS2007’s ResultsLatest resultsChange (%)
Revenue (£m)42.6141,4453,291
Operating Profit (£m)3.24642.11,194
Total Debt (£m) 000
Net Cash Earnings (£m)3.24130.73,934
Capex (£m)1.62179.24,786
Dividends (£m)000
Free Cash Flow (£m)1.66252.33,047
Average basket value (£)42.8070.8465.5
Average selling price (£)16.9225.0948.3

 

Fundamentally-speaking, the retailer saw excellent growth in net cash earnings of 4,000%. Meanwhile, operating profits is up by 1,200%.

ASOS’s valuation of £4.657bn has given it a PE ratio of 133 times.  Meaning the market expects the online retailer to grow faster today than it did back in 2007.

An alternative company is BOOHOO.COM (LSE: BOO), a similar business to ASOS.

Fun fact: ASOS stands for “As Seen On Screen”.

 

First Derivative (756%)

If you heard of “ALGO” trading, then you could be familiar with this financial software IT firm.  

Founded in 1996, the company served capital markets industry. They provide a service to the financial industry to cope with high volume and complex trading.

Share Price Chart 2

First Derivative share chart since 2007

ITEMS2007’s ResultsLatest resultsChange (%)
Revenue (£m)9.3321171,153
Operating Profit (£m)2.65310.829308
Total Debt (£m) 4.08930.223639
Net Cash Earnings (£m)2.614.97475.8
Capex (£m)5.113.48164.3
Dividends (£m)0.566.2441,015
Free Cash Flow (£m)-2.55.463n/a

 

Today, First Derivative’s market value is £588.76m giving it a PE Ratio of 28 times. The firm business performance didn’t live up to market performance. It lacks growth in operating profits and cash earnings. At the same time, debt grew faster than profits and cash earnings. An increase in dividend payout by 10-fold.

 

Idox PLC (812%)

This company is a “supplier of specialist document management collaboration solutions and services to the public sector and increasingly to highly regulated asset intensive industries around the world in the wider corporate sector.”

In other words, it manages sensitive information and to help optimise services between the service it provides and the citizens.

Anyway, it is a successful company. If you still feel unfamiliar, below is iDOX business structure:

 

 

 

For further information go to the website.

This is the company rise to fame:

Share Price Chart 3

 IDOX PLC SHARE CHART SINCE 2007

iDOX’s share price chart peaked in 2013, which is followed by a 50% collapsed, before making new highs in 2017. 

 

ITEMS2007’s ResultsLatest resultsChange (%)
Revenue (£m)20.62576.74272
Operating Profit (£m)1.114.281,198
Total Debt (£m) 7.61128.835279
Net Cash Earnings (£m)-0.411.092n/a
Capex (£m)0.329.398n/a
Dividends (£m)0.1083.1482,815
Free Cash Flow (£m)-0.721.639n/a

 

When a business saw operating profits grew by 12-fold it can translate to enormous gains in their share price. In this case, it is 800%!  The company spent a lot of money in capex, therefore restricting its free cash flow generation. It currently makes £1.64m in FCF.

Although the business pays out £3.148m in dividend it had to borrow money to do so, as total debt increased to £28.8m.

The valuation of £290m looks hefty, as growth hasn’t been consistent. 

 

 

Judge Scientific (1,421%)

This serial acquirer owns 12 different businesses relating to the manufacture of fireproof materials to fibre optics and much more.

And it is one company doing acquisitions the right way. Here is the list.

 

Share Price Chart 4

 Judge Scienific share chart since 2007

ITEMS2007’s ResultsLatest results (2015)Change (%)
Revenue (£m)6.19256.2808
Operating Profit (£m)0.9251.894.6
Total Debt (£m) 2.812.917361.3
Net Cash Earnings (£m)0.3676.5771,692
Capex (£m)0.1148.0806,988
Dividends (£m)0.1281.4994
Free Cash Flow (£m)0.1-1.475n/a

 

Operating profits are at time erratic and inconsistent, but since 2007 it is up 94%. However, net cash earnings are 265% GREATER than their operating profits!

Given it buys other businesses (and, often at a premium) it needs immediate capital at the ready.  So, it is no wonder you saw big increases in capex spending, where this is finance by borrowings. And, some of that borrowings goes into financing dividends to shareholders.

Despite all that, a market value of £94m makes it look reasonably valued!

A word of warning: If interest rates or inflation rate rises, it is bad for acquisitive businesses because borrowing costs will rise. If it pays a dividend, then it will get cut.

 

 

JD Sports Fashion PLC (1,576%)

A familiar name in the high-street and a leading seller of sports goods. The company came to life because of the financial crisis where it was able to pick up struggling outdoor apparel such as Blacks, Millets, Go-Outdoors and Cloggs.

 

Share Price Chart 5

 

Source: Old.barchart.com.

JD was founded in 1981 by Mr Wardle, who happened to be a former chairman of Manchester City Football Club.  The fundamentals over the ten-year period are in the table below:

ITEMS2007’s ResultsLatest resultsChange (%)
Revenue (£m)530.61,821.7243.3
Operating Profit (£m)19.5133.4584
Total Debt (£m) 0.36.575n/a
Net Cash Earnings (£m)37.569226501.6
Capex (£m)21.28783.5292.2
Dividends (£m)3.37913.9311.4
Free Cash Flow (£m)27.558144422.5
No. of Stores406918126
Retail (000’s Sq. ft.)1,2153,530190

 

The growth in JD Sports and to a lesser extend Sports Direct were two of the biggest winners’ sportswear players in the last ten years.

Both businesses were acquisition-driven, but JD Sports saw the biggest rise in its share price. In the last ten years, it grew cash earnings by 5-fold with the doubling of stores in the high-street.

So, why have JD Sports been highly rated by the markets, even though fundamentals have lacked behind valuations?

One reason is the consolidation of the sportswear market. Less competition means higher margins. The re-rate of its PE ratio saw it jumped from 6.75 times in 2012 to 19 times’ earnings today.

With a valuation of £3.5bn, investors should evaluate the UK Sportswear market for signs of further growth, or is the sector itself matured. Also, is the consolidation process in this niche space coming to an end?

 

 

 

 

BOOKER GROUP PLC (2,761%)

Anyone that does bulk-buying or open food stores are familiar with this company. But, this wholesaler owns Budgens, Londis, Makro and Premier Stores in its portfolio. Now, it is getting acquired by Tesco PLC in a £3.7bn deal.

 

Share Price Chart 6

No comment since the company’s shares is influenced by a takeover bid.

ITEMS2007’s ResultsLatest resultsChange (%)
Revenue (£m)139.94,991.53,468
Operating Profit (£m)-6.71152.8n/a
Total Debt (£m) 4.10n/a
Net Cash Earnings (£m)-3.9175n/a
Capex (£m)-0.17170.8n/a
Dividends (£m)065.2n/a
Free Cash Flow (£m)-4.1104.6n/a

 

To date, this wholesaler has kept pace with fundamentals sales rose by 3,468%, faster than the share price. The company has no debt with £152.8m operating profits. Nothing more to say.

 

ASHTEAD GROUP PLC (1,039%)

It rents out industrial items to construction businesses such as fork trucks, excavators, aerial work platforms and backhoes. Also, it rents out smaller equipment, including power saws, ladders and pumps.

The company was founded in 1947 in Surrey of a village called (you guessed it!) Ashtead.

 

Share Price Chart 7

The share price reflects a setback or consolidation period in 2015-16, before doubling in price.

 

ITEMS2007’s ResultsLatest resultsChange (%)
Revenue (£m)8962,260.3152.3
Operating Profit (£m)101.1699.6591.9
Total Debt (£m) 9172,014.7119.7
Net Cash Earnings (£m)181.333.3-81.5
Capex (£m)635.5177.9-72
Dividends (£m)781.51,064
Free Cash Flow (£m)-375.7-136.463.7

 

This is a strange one because it isn’t fundamentally strong. The “strong part” is the income statement with profits up 600% in ten years. If one were to peak in the cash flow statement, the company net cash earnings are low with negative free cash flow.

The fall in capex spending and doubling in total borrowing is a signal the firm is struggling. However, we have to factor in the change in US political landscape, and with new infrastructure spending the demand for hire equipment will increase.

 

 

ABCAM PLC (1,398%)

This biotech and life sciences is everywhere from antibodies to health kits and biological research.

 

Share Price Chart 8

ITEMS2007’s ResultsLatest resultsChange (%)
Revenue (£m)24.52171.7600
Operating Profit (£m)5.246.318790.7
Total Debt (£m) 000
Net Cash Earnings (£m)3.947.31,113
Capex (£m)4.221.9421.4
Dividends (£m)0.96816.741,700
Free Cash Flow (£m)-0.225.8n/a

Not surprisingly, fundamentals in Abcam have driven its valuation with earnings growing by 800% in ten years. (it is higher for cash earnings) The company possesses zero debt. However, the dividend yield has not kept pace, even when earnings cover dividends 2.7 times.

A possible setback is slower EPS growth and higher PE Ratio, which means further share price appreciation will slow in the future.  

 

 

 

Scapa PLC (1,414%)

They make a simple produce that helps to hold things together. And people say you can’t make money from sticky tape!

 

Share Price Chart 9

 

This stock can’t stop going higher. And like the stock market itself, it has been in a bull market run since 2009.

 

ITEMS2007’s ResultsLatest resultsChange (%)
Revenue (£m)184.3246.733.85
Operating Profit (£m)15.711.7-25.5
Total Debt (£m) 1.321.31,538
Net Cash Earnings (£m)5.112.9153
Capex (£m)39.8226.7
Dividends (£m)02.2n/a
Free Cash Flow (£m)23.83.2-86.6

 

The fundamentals of this business do not reflect their £560m valuation when profits were 25% lower than a decade ago. However, cash earnings improved by 153%, which is slower than the stock price appreciation of 1,400%!

Either the market is giving Scapa a higher valuation or the business secured lucrative contracts which would lift earnings.

However, EPS doubled five years ago, but PE Ratio is 20 times’ earnings.

 

 

Melrose PLC (845%)

Melrose specialises in the acquisition and performance of good manufacturing businesses.

Share price chart 10

Looking at this price chart, you see most of the appreciation coming from last year.

 

ITEMS2007’s ResultsLatest resultsChange (%)
Revenue (£m)344889.3159
Operating Profit (£m)18.7-61.6n/a
Total Debt (£m) 21.2583.62,653
Net Cash Earnings (£m)15.450.6229
Capex (£m)24.71,147.44,545
Dividends (£m)135.8-55.4
Free Cash Flow (£m)416.5-1,085n/a

This is an investment company and it is acquisition-driven, therefore high debt and capex are not surprising. Also, this model is volatile because you get high earnings one year and losses the next. The business doesn’t go bust because of the assets they hold under their portfolio.

P.S. Unless these assets underperform!

 

Final Thoughts

The idea behind this post is to shed light on a success comes in different ways of running it. Some businesses people know like ASOS and other are more obscure like First Derivatives PLC.

Also, some of these great stocks appreciations can be overvaluation of the company.

 

Did you know these companies and the success they attain, then please leave a comment below?

 

 

 

 

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