@Hackofalltrades I know I am one StrawPerson who has several SELL transactions on this platform for $SPZ. So, just to avoid any chance of a misunderstanding, I have NOT sold a single $SPZ share in RL. My entire RL transaction history has been:

18/3/24 BUY $0.4029

15/8/24 BUY $0.5800

26/8/24 BUY $0.5200

I only sold some $SPZ and other holdings on SM because I have been acquiring $BIO, $DDR, $EGL, and $LYL in RL and wanted these to be reflected in my SM holdings.

While I consider the $SPZ valuation is now getting into my view of fair value, my range around the valuation is pretty wide. Importantly, I am holding this because in my thesis I assume they will continue to expand to other jurisdictions, and if they can continue to expand the business with the economics shown to date, then there is significant further upside and room to run. There is, of course, ample growth potential in the existing markets too.

At a FC FY25 EV/EBITDA of 17x, it is pricey but not excessively given growth (3-yr OpCF CAGR = 24%). On consensus, EV/EBITDA falls to 11 by FY27. if you place any meaning on that. On tradingview.com, the views of 4 covering analysts have an average TP of $1.025 with a range of $0.70 to $1.20. Cannacord and Shaw & Partners hiked their price targets by 47% and 57%, respectively, after the recent AGM update, which has been the catalyst for the SP spike.

$SPZ is on my list to do some more of my own work on valuation.

I'm not a buyer at these levels. I'd probably be a buyer below $0.65 but, as I have a RL position size of 4.5%, I think that's large enough for a business with this risk profile.

Held in RL and SM

Yeah @Hackofalltrades just valuation - I'm not putting a ding on the business. I didn't think I had a lot to add after others commented on the recent trading update so didn't post here, but I thought it was a cracker. The only thing I could knock was the speed of the German rollout. I asked about that at the AGM and the response was that it was essentially having the wrong sales team i.e. not structural. They expected Germany to accelerate in coming periods. That's great but they've been saying that for a while and so it's a watch for me. Other than that it's humming along.

Unlike some I'm not against long term targets, particularly when they're not explicitly financials based, and I liked the 3000-site target by December 2028. It's a stretch but they've shown a capacity to deliver on their targets ahead of time in the past.

I just think the SP now assumes they're going to hit the new target, and then some. There are risks that have been discussed here at length and I fear the market isn't appropriately discounting it for those risks. Having said that, and despite my recent sales, it's still my 3rd largest position here and is thereabouts IRL. It would need to run some more before I was to liquidate entirely. It's just a case of seeing better marginal opportunities.

Progressive selling (and buying) is something I've gotten better at. When I started I was much more black and white. I was usually either all in or all out. If a thesis breaks, then I still think that's appropriate, but if I'm selling on valuation grounds, I'm more likely to drip feed these days. That's the way that I've settled on to crystalise gains but still give myself the opportunity to participate when the market gets irrational as it sometimes does.

Thanks Mike and Noddy, that's much appreciated!

Yeah, this does seem like one stock that has the possibility of becoming irrational. It just seems to have the possibility of growth that fits what the smallcap investors like seeing.

We'll see if it starts doing the rounds on the popular podcasts...

Nothing more annoying than fundies who just talk their book @Hackofalltrades! Anyway..

SPZ's execution has been great since they first gave their long term site target, and importantly they have maintained the site economics as they have scaled and generally kept the corporate overhead cost base fixed (other than adding capabilities in new geographies).

When a company can demonstrate unit economics and provides outlook on site growth into the future it creates every analysts dream; the model you can input unit economics and then click and drag right. Because of that I always suspected SPZ could become a fundie fave if they kept executing and I think we are starting to see that now.

That said, I commented to @Noddy74 the other day I think the valuation is starting to lose the regulatory discount that should be present in the price. I've seen brokers comparing to industrial peers or against a broader market valuation, but it ignores the very real regulatory risk SPZ faces. I remember when MMS fell >50% in one day on the back of Kevin Rudd proposing salary packaging changes, SPZ is in a similar position where operations are potentially at the mercy of a UK politician's penstroke.

Fantastic comments thanks Wini!

Yeah, I remember when ASM (rare earths junior that has added a not very successful rare earth processing section) they put out a scoping study that had that exact kind of drag and droppable profit along with a potential deal that never eventualised (along with a potential deal that never eventualised, but put a high valuation on their mine asset).

The stock went nuts till the fundamentals didn't back it up.

I think it's different in SPZ's case as management are growing a record of meeting targets, but yes there should be a regulatory discount.

@Rick 25% today - not bad