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Last edited 3 years ago
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#Quarterly ASX Announcement
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Added 4 years ago

It seems that SelfWealth is here to stay. Rather then being a one pump chump and falling over after the explosive growth in CYQ1 and Q2 of this year, SelfWealth has had a record quarterly trade volume, record quarterly operating revenue and record monthly trade volume in September.

They have also added 11,300 active traders for the quarter (more then they did in CYQ1 of this year!) IIt is important to know that the profit margin on trades is quite small but their investment in US Equity trading (for $9.5 USD flat fee) will add a significiant revenue stream for the business. Importantly, 'client cash held' where the business receives interest on theses funds, has increased to a record $409m over the quarter.

Rob Edgley has confirmed that even among the heavy investment in new mobile applications and US equity trading, the business has had its second cash flow positive quarter.

There are a lot of oppotunities for SelfWealth here, seeing strong organic growth here before they have even added their new refined app and US trading makes me very confident in their potential. They have a number of new competitiors however their first mover advantage coupled with their community engagement, cost effectiveness and fantastic support means they have created a fantastic foundation to grow from.

Further headlines below:

  • Record quarterly trade volume of 379k trades.
  • Record monthly trade volume in September of 136k trades.
  • Record quarterly operating revenue of $4.37m.
  • Second consecutive quarterly positive cash flow from operating activities, $344k.
  • Number of active traders reaches 57,816 at end September. Up 11,371 active traders for the quarter.
  • Value of ‘client cash held’ increased over the quarter to $409m.
  • US equity trading on track to launch during December quarter.
#Competitors
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Added 4 years ago

Found this little chestnut when reading about the new kid on the block Superhero, offering '$5' flat fees, it turns out if you don't pay a $9 per month fee (billed annually), you can't even place limit orders... (i.e. you cannot say I want to buy/sell a stock at $1.05, you have to buy at whatever the current market price is)

Good luck appealing to high volume traders guys!

#Search Trends - Competitors
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Added 4 years ago

In regards to OpenTrader, while they do have a much better approach to ownership and HIN's (and also have reasonably priced option trading over IG) they have a scalable brokerage model (attached). Might be good for micro day traders but other than this I think SWF comes out on top once again.

#Search Trends - Competitors
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Added 4 years ago

I just wanted to shed some light on the 'competitor' Superhero that is offering $5 flat fees.

The biggest and most glaring issue here is that you do not have your own HIN here and they are technically but not usefully CHESS sponsored. 'littleko' has a great summary of this on r/ausfinance:
"Note that the way they are achieving these low fees is through consolidation of stocks under a single HIN. This means that you don’t have your own HIN.

It’s unclear what this really means about them being CHESS sponsored. Their FAQs suggest the shares are CHESS but they also say you can’t transfer held shares in and out like you normally could through standard CHESS broker"

While I advocate each to their own, I am not dealing with a broker where I do not have absolute ownership and management of the securities I want to hold and trade. SelfWealth have transparent, user friendly and complete ownership focus when it comes to CHESS and HIN owndership of securities.

#ASX Announcements
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Added 4 years ago

SelfWealth have blown the doors of in their trader growth and revenue increase for the year. July trades and revenue are reported to have given them their 2nd best month ever. I am keen to see how their cost base adapts moving forward now they are free cash flow positive (of around $9m if I rememeber correctly).

  • Revenue up 313% to $8.6m
  • Total trades up 299% to 659,131
  • Increase in active traders of 235% to 46,445
  • $2.5bn of total assets on HIN up 124%

Good to see some comentary about looking forward and insight into US equity trading later this year. If they continue to win market share and increase profitability this is a very exciting company.

Full report here: https://www.asx.com.au/asxpdf/20200821/pdf/44lr0z2gcbw8fc.pdf

#ASX Announcements
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Last edited 4 years ago

As part of my and other member's valuations, economies of scale have been called out to equip SelfWealth with bargining power in new and ongoing contract negotiations. While the details will remaining confidential, SelfWealth has signed a 3 year deal with OpenMarkets that will hinge on this new found scale and bargaining ability. I believe this validates the thesis and coupled with the increasing trade volumes and active traders we will continue to see SWF grow in this new Retail trading world.

Full Announcement here: https://www.asx.com.au/asxpdf/20200724/pdf/44kstd4clvyc0f.pdf

#ASX Announcements
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Last edited 4 years ago

Q4 Results: http://investors.selfwealth.com.au/DownloadFile.axd?file=/Report/ComNews/20200706/02251723.pdf

Headlines:

  • Continued growth in ‘active traders’ joining the platform. Up 44% quarter-on-quarter, to 46,445.
  • Operating Revenue of $4.18m. Up 101% quarter-on-quarter.
  • First ever quarterly positive cash flow from operating activities, $809k.
  • Quarterly trade volumes reach 340k. Up 112% quarter-on-quarter.
  • Value of ‘client cash held’ remains firm at $366m.

There was discussion around SelfWealth hitting $1m Positive Cash Flow however I thought this was quite eye watering to begin with, however I think $800k is the next best thing. It will be interesting to see how Management use their Capital to reinvest and grow SelfWealth as they are branching into US Equities in later CY20.

#Bull Case
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Last edited 4 years ago

An update on Self Wealth's site engagement*, as mentioned in my valuaton they were the #87,000 most popular enagaged site in Feburary and they are now are at #34,500~ at mid June.

My opinon on this statistic is greater use of its platform, greater exposure to new and prospective traders which translates into a higher number of accounts and extrapolating from this, higher revenue and interest on account funds.

*Please note that the way Alexa gets to this number is not fully available to the public an is a blend of time spent on site as well as how much unique new traffic is visiting the site. They are quite reliable in their metrics (in my use with them in the past however please take every statistic that you cannot view the data for with a pinch of salt.