WPP plc (WPP)
EV: 11.65B, Forward PE: 4.54, PS: 0.25 PB:1.08 EV/EBITDA: 5.32 REV: 14B , total debt: 6.75B
Great assets, pessimistic outlook. Ugly enough to get me excited.
I like my girls, I mean my stocks, ugly. I don’t like to compete for the hot and sexy Instagram models types.
Lack of self-esteem or just pure self-awareness?
I will go for the second option. I am a lazy guy and I like going on cheap dates. Same thing goes for my stock selection.
WPP is marred with a seemingly unsustainable debt, it has lost its leading position in the Ad industry to the more nimble AI-focused Publicis. The stock is down 80% over a decade, selling below its 2008 lows. Shareholders are suing the company, a fired exec has followed suit.
A new tech-centric CEO had been hired with the hope of aligning the company with the structural reality of data and AI. Thousands of jobs are on the line of fire and more assets stripping may be required to trim down the debt.
The stock is cheap, reasonably so. But I believe the market also is overreacting and overstretching WPP troubles. The company’s legacy, assets, and revenues prove still rank the company at the top end of its industry.
WPP is still printing cash, its list of loyal clients a thing of envy by its competitors.
Cindy Rose’s tech background looks like a wise choice given the company’s need for flexibility and adaptability to the market AI revenues-driven reality. Will she deliver? Only the future will tell. But given the level of negative sentiment, I deem the company worthy of a second look.
They say the beauty is in the eye of the beholder, well, I prefer my stocks for their inner beauty, and care little for the outside appearance. WPP had been a market leader in the Ad world for nearly 50 years and I don’t see the company disappearing without a fight. There is still a lot of juice left in its tank, and I am confident in Cindy Rose’s ability to turn the ship around. At worst, she will probably do enough cleaning to make its balance sheet worthy of a takeover bid.
I am buying “this girl” some flowers.