Short Update on Flow Traders (FLOW)

Thesis is working out as expected

In the original article about Flow Traders, I mentioned:

There was an increase in market volatility in the beginning of August 2024 (with intraday VIX rising to 60 points), and it’s interesting how much FLOW managed to capitalize on this opportunity.

They actually did manage to capitilize exactly as expected. On this short spike of volatility, they managed to achieve EPS of $0.87. This brings us to EPS of $2.18 over the last 9 months. This is already PE < 10 without the 4th quarter.

And it was quite a short spike of volatility. In general, VIX was not very high over the period. I believe, that we’ll see much better numbers if we have some correction or turbulence in the markets. Then they can earn 30-50% of their market cap in one year. So, I still like Flow Traders as a hedge against the turbulence or black swans in the market.

Trading capital is also growing as expected (7% over quarter), since they canceled dividends in favor of it. LTM return on capital is also growing.

I wanted to add a bit more, but the price has increased over the last few weeks by ~20%. If I didn’t have any shares, I would initiate a starting position even at this price.

But I will wait for now, until there is a better opportunity to add. Hopefully, in the next weeks or months.

Disclaimer:

Maksim Rodin and/or The Double Alpha-Factory own shares of FLOW at the moment of publication.

This article is for educational purposes only. This is not an investment advice. I may buy or sell these securities at any time. Please see full disclaimer here.