@Dangles and @mikebrisy I like this business and I like the tailwinds it has. But I don't like or trust the CEO...

I've been following them for about 18 months now and every time I hear him speak or engage in Q&A there are lots of signs we have an untrustworthy or hubristic leader at the helm.

Yesterday he presented at the Bell Potter online event. The host of that event from Bell Potter wasn't a great MC. He was a bit nervous or stumbly. Yet at the start of the presentation Michael then made a joke about how there is a job for him at IPD Group if he needs it. I know it's only a joke but there's no way Buffett is offering an MC a job at Berkshire if he was like that!

And the share price drop since May has to leave you wondering on whether others knew the downgrade was coming ahead of time.

He sets off my hubris detector every time, so I'm happy to leave them in my parked file for now and hope there is a change of leader sometime in the future that's an upgrade.

That said it doesn't mean it mightn't still do well or that you shouldn't invest if you don't care about management behaviours as much as I do.

I'm with you on this @Karmast. I was a holder of this stock but I sold out after the precipitous fall from around $4.80 down to $4.00 on no news in November 2024 which was then followed by an underwhelming 1H25 earnings guidance which saw the stock fall even further to mid $3.50.

I was convinced there was a leak that the big end of town was aware of. That was enough for me to put IPG in the sin bin as I place a high emphasis on management and board integrity.

Now we have a similar situation where the stock was trading around $4.00 on the 9th May, only for it to fall nearly every single day and close at $3.46 on the 18th May, the day before the below consensus FY25 earnings update was announced to the market. Coincidence? I think not.

@Karmast and @OxyBBear clearly events prove that selling out at $4.00 (in @OxyBBear 's case) was a good thing.

However, I don't share your perspectives on management or the reasons for the SP movement. There are ample cases where a soft macro and momentum trading will pull a stock right back. In the case of $IPG, its advance in the two years after IPO to a P/E of 27 was on any reasonable basis unjustified. It has not yet demonstrated the quality of organic growth to justify that kind of rating, in my view.

However now, with a challenging macro leading to cyclically flat performance, it is not unreasonable that its forward P/E has fallen to 12.5x. I can totally get there without needing to point to insider trading to explain trends or linking it to concerns over the CEO. Michael Sainsbury has been CEO for 10 years, and significantly built this business from the legacy pre-IPO IPD Group. The strategy, the portfolio of businesses in the group, and what they've paid for the acqusitions, all make sense to me.

There's no doubt that he (Michael S) is an awkward communicator, and unfortunately falls into using "word salad" too often to explain things. But in the 1-2 years I've been following this business, I've haven't detected anything that ring alarms bells, or inconsistency in what he's said.

I still draw some comfort from the fact that Mohammed Yousseff - by far the largest insider on the management team - bought back almost $4,000,000 (admittedly that he'd sold earlier!) when the share price slide started in November.

Of course, I am not so blinkered as to ignore alerts, warnings and hunches from highly esteemed members of our community, and so of course I am alerted by these warnings. However, so far they are an insufficient basis for me to act.

I am going to observe how the business performs over the next year, and will act on the performance delivered.

There are ample cases where a soft macro and momentum trading will pull a stock right back. 

@mikebrisy Yes I agree but the fall in share price itself isn't the trigger for my suspiciousness, it is the fact that a negative earnings update followed both of these falls which indicated a leaky ship and in a generally buoyant stock market I might add.  

Furthermore it has come to my attention that other stocks such as SXE, SKS and SHA have not suffered the same degree of retracement as IPG (although I am not sure how closely these stocks can be directly compared to IPG).

My point is if management had not released the negative earnings updates after both selloffs I would not have been the wiser and likely would have held on. 

@mikebrisy We are in agreement on the general business and what short term market factors can do to a business.

I think where we disagree is how much faith we put in the particular people at play here. A senior manager in Yousseff who dumps $5 million worth of his shares in Sept 2024 at $5.10 a share and then buys them back a couple of months later at $3.78 is not my kind of manager. I also note the Independent Director Andrew Moffatt also sold half his holding a few weeks after Yousseff.

And a quick look at Moffatt shows that the other listed companies he's been involved with have paid out lovely management perks whilst performing poorly for shareholders and consistently capital raising as a result.

To wrap it up, the Chair while having some industry experience has no serious Board or listed company experience and is likely the kind of Chair I'd want, if I was manager prioritising myself over the other owners.

I could be wrong of course and this is all circumstantial evidence but I'm happy to eliminate the risk despite liking the overall business.