soi
30 Oct 2017
Re: Hello/trade HiOpened a long position @ 112.53.Allowing room to add if it should drop further.Nothing fixed yet but after about + 10 %.ATBsoi
soi
30 Oct 2017
Hello Good MorningI have no holding or position in this currently.Casa kindly mentioned it as being of potential interest on another of the iii boards.I started early this morning, have had a reasonable look at it.It appeals to me.Good recovery potential IMO, as well as a very attractive yield.I consider it oversold.I think in the near short term a run back up to 125 or so a viable proposition, more in time yes, quite probable.Depending on sp level, will likely buy a few to start ( real shares }May also have a go with a long derivative position. Spread appears to be very wide, a slight off putting point, maybe it will tighten at or after cash open.Nice to see some quality posters/posts on here also.GLsoi
penhome
29 Oct 2017
Chart Am planning to take an initial position in CNCT on Monday. It's broken its 2017 downtrend, is positive (above cloud) on 60, 240 and daily timeframes and has broken above the Kijun line on the weekly, so SSB at 128 is next main resistance point. So, without the tech talk, this looks bullish.[link] this is helpful. It's just my opinion based on what I think the chart is suggesting. This is always a balance of probabilities so my opinion can be wrong and other analysts may have differing views.Pen
Bill1703
29 Oct 2017
Re: Results - CFO buying shares "... if anything, I am more likely to increase my holding. After all, CNCT is still offering 8-8.5% yield.... "Yes CasaB, I was being a bit cheeky... and I might well do the same myself. I have been pondering the 5-year chart... for most of this time, they held a pretty solid 140-160p trading range, only decoupling around the turn of 2017. There was also a relatively short and sharp spike up to 220p or so in late 2013... not sure if there was any bid spec or similar, or just a buoyant market into year end?The recent weakness is little to do with fundamentals - the negative narrative of long term structural business decline is hardly new - and more to do (IMHO) with the market entering a more extreme, paranoid phase.... hiding in supposedly safe situations, no matter how high the valuations, and shunning anything which even hints at specific risk, so matter how cheap. I am guessing, as I can't fully recall, but I suspect it was more the opposite back in late 2013?I also now remind myself that CNCT have now actually increased the dividend for each of the last seven years at least, if you adjust for the 2014 rights issue... haven't bothered to check further back and cannot remember when the original demerger was. But the message to me is - these guys are serious about cash returns, they have built up a decent track record, and they will work as hard as they can to keep it going. This does not square with a 8.7% yield... ".. Last weeks issue featured IMB and this weeks featured CNCT in the glad you didn't part. I have now invested in both shares but importantly after their falls (I hope). This might look clever but I have caught the falling knife on more occasions than I would like to admit... it is a calculated gamble but IMB is a defensive blue chip with a 5% dividend and we all know now that CNCT is a racing certainty winner....fingers crossed."I hadn't got to that part of my Moneyweek copy this week... with any luck, they will come to be a reliable contra-indicator?! But I am with you on IMB too... divi yield 5.4% this year, unless something changes, yet they are now in the 9th year of "at least 10% pa" dividend increases, and this remains their policy, with no suggestion - yet - of any failure of nerve here. When the market is in this kind of phase, we know - from history - what we should be doing. Buying the unloved stocks and selling (or at least shunning) the "safe" expensive stuff... even though it does mean catching a few falling knives, inevitably, as you observe. There are always specific exceptions, and only time will tell if CNCT and IMB were the right "knives" to catch. But on the former, the previous 140-160p range still looks about right to me and no reason why it shouldn't recouple to it... the current consensus broker price target is up at 154p, pinch of salt with such things of course, but it looks spot on to me! And a similar story with IMB... trust the track record, look at the history of financial delivery... look at the free cash flow! And worry less what the market is saying, at any one time... be greedy when (too many) others are fearful!
casabanker
28 Oct 2017
Re: Results - CFO buying shares I have no plan to sell CNCT in spite of probably my quickest 20% gain ever. My investment here is very modest and, if anything, I am more likely to increase my holding. After all, CNCT is still offering 8-8.5% yield.I subscribe to Money Week and each issue has a report on shares that have risen sharply over a short period. It's headed "If only you had..." and then those that have dropped "Be glad you didn't.... Last weeks issue featured IMB and this weeks featured CNCT in the glad you didn't part. I have now invested in both shares but importantly after their falls (I hope). This might look clever but I have caught the falling knife on more occasions than I would like to admit. I admit that it is a calculated gamble but IMB is a defensive blue chip with a 5% dividend and we all know now that CNCT is a racing certainty winner....fingers crossed.Casa.
FRTEB
27 Oct 2017
Re: Results - CFO buying shares " Will also be interesting if CasaB and FRTEB hold onto their short-term gains.. .as Uncle Warren also said, nobody ever lost money by taking a profit! " My plan is to hold long-term although the plan is always under review! As things stand I would only look to sell to bank a sizeable profit if it looked like the only way for the sp was down - so lock in the gains and buy back in lower. I used to do that a fair bit (several times with some companies) but got caught out once or twice when the price kept going up. Oops! Now I'm more likely to sit back and do nothing as long as the income looks sustainable.
Bill1703
27 Oct 2017
Re: Results - CFO buying shares "Well, that is two days of solid gains in a row (c. 10% each day). We're probably back to about where we should have been all along before the wobble down to 90p."No, GS... let's get greedy! We could do with another WEEK of c.10% daily rises to get back to where we should have been!Er... what was it Uncle Warren said about the "greedy" and the "fearful".... ?!Okay, we'll take it... let's say, at the very least, a fair reaction to an encouraging report, albeit somewhat delayed after a hesitant start - just shows (IMHO) that the market isn't really looking properly at this one, and quite a few other stocks like it. Will be interesting to see if it can continue to make progress... not sure how many people are actually sitting on "profits" to take, even now (though I happily note I am back in the black overall on my two tranches - just!) Will also be interesting if CasaB and FRTEB hold onto their short-term gains.. .as Uncle Warren also said, nobody ever lost money by taking a profit!NB. CFO buying 20,000 shares yesterday around 99p for his SIPP... okay, hardly a seismic sum, but never a bad sign..
Bill1703
27 Oct 2017
Re: I'm in "My main concern is still the high P/B and I think this might be a drag on the share price. Having said that it's improved significantly from when I looked last year: now <11 vs 27... further progress needs to be made on the weak balance sheet."I would be more than happy to see the P/B rise significantly again, FRTEB - and you should be too, as a new holder! Welcome, by the way...I don't put much store in P/B (though it is more relevant in a few selected sectors) - or at least, the "B" part... and I don't believe the market does either, with plenty of well-regarded stocks trading at P/B of 5x, 10x, even 15x or more. Many (most?) companies carry very "historic" and/or written-down asset values, which bear little resemblance to their realistic actual current or replacement cost.I'd need to have a closer look at CNCT's balance sheet... it could be a case of this, or perhaps more reflects the fact that, as a logistics business, they have quite a lot of short-life assets which are quickly depreciated, and not so much by way of long-life physical assets.I previously described the balance sheet as "sneaky strong", ie. stronger than might be commonly appreciated... the pension schemes are in overall surplus, working capital under tight control, and it carries a high Altman Z score (if you believe in such things... 6.5, more than 2x the UK market average). The key balance sheet metrics for me (and the debt rating agencies) are ND/EBITDA leverage, and interest cover. With the Education disposal, leverage moves from an above-average to pretty modest level (1.4x vs 2.4x last FY), while interest cover is relatively comfortable at 8.2x... flat y-o-y but likely to go up going forward with the full benefit of lower debt post-disposal.So overall, I don't see much scope for significant change in the "B" part of P/B - other than the gradual reduction in debt as long as FCF > dividends paid (as it has been for a long time) - but I continue to hope for significant upward movement in the "P" part"!
Guitarsolo
27 Oct 2017
Re: Results Well, that is two days of solid gains in a row (c. 10% each day). We're probably back to about where we should have been all along before the wobble down to 90p. There'll probably be a bit of a pull back with profit taking (brave souls have done very well!) but otherwise, a solid income share with a still very generous yield. GS
FRTEB
27 Oct 2017
I'm in Positive update. Debt down significantly. P/E now less than 10 and several other ratios looking good. My main concern is still the high P/B and I think this might be a drag on the share price. Having said that it's improved significantly from when I looked last year: now <11 vs 27.The divi is rather juicy and it's covered by earnings (just) and cash flow + there's a stated commitment to a progressive dividend policy. Management seem on the ball and the company seems to be moving in the right direction. On that basis I bought a tranche this morning for the income and hopeful of a paper capital gain when this gets re-rated - I think it will in due course but further progress needs to be made on the weak balance sheet.
Bill1703
26 Oct 2017
Re: Results "... I think there are a couple of areas of uncertainty which may be causing the market to mark down the value... The board need to show better signs that they can make a material and profitable business here soon, the current cash flow and realizations from disposals should buy them a little time and space to deliver."Yes, HE, all valid points. They key point for me is there is very little - if anything - in the price for management delivery - even after today's move, which is now in "proper rally" territory, up 13/14% on decent volumes. Suggests genuine big-fund buying, after a lukewarm reaction in early trading?Everything I see here - and have seen, since I've been following it - reflects a management team that are proactive, realistic and very much on top of their business. Long way to go - both operationally and, to be hoped, in SP terms. Will be interesting to see if it can make further material progress in the short term, or if the febrile market remains sceptical... still 150p for me, and I am sure it would be worth AT LEAST that to a trade buyer?
Hydrogen Economy
26 Oct 2017
Re: Results The results are a relief after recent SP weakness, I was beginning to worry about some black hole opening up. I agree with many who point out SP undervalues the business, but that assumes the BOD can deliver the new strategy so I’ll focus on what the press release and webcast had to say about the operational performance and future of the business. I think there are a couple of areas of uncertainty which may be causing the market to mark down the value. The sale of Education and Books looks a good move, it prompts change to a single business structure seems logical, simplifies the business, should speed up the changes needed and lower costs. The decline in revenue, overall profit and EPS are not surprising but the Tuffnells’ profit performance is a disappointment, with a slip in margin of 2% to 6.6% leading to 19% lower profit, despite a 5% rise in revenue. To put that in perspective, if margins here had been held at 2016 levels, the Group operating profit would have increased 1m instead of dropping 2.7m. A number of poor and inefficient practices were blamed, it is nearly 3 years since Tuffnells was bought, that looks too long to recognize and fix the problems described, but better late than never. The integration of Tuffnells and News with shared depots and utilization looks like an easy win and is already underway. Tuffnells margins should improve in the next results or credibility will fall into question. News is 7.5x the revenue of Tuffnells, the news revenue. If News revenue continues to decline at 4.2%, Tuffnells would need growth of 14% to compensate the lost profit, that looks unrealistic, which is why Pass My Parcel seems key to the long term. The Pass-My parcel business is also a concern. The target is breakeven by 2019, OK but it was kicked off in October 2014, that seems a very slow build-up. Volume doubled over 2016 but still only 1m trips which fell short of targets. They suggest end of year rate built to equivalent of 2m/year, but that still seems small. Losses are still growing at -6.3m Vs -4m in 2016. 2017 losses include some IT investment but even so, losses of 6 GBP/trip doesn’t sound encouraging. No revenue or other details provided as lumped in the News numbers so hard to get a clear picture. If the numbers told a positive story, presumably we would be seeing them. Click and collect business and the like looks like the best opportunity to secure the long-term viability of the business. It looks likely but by no means certain that this can be successfully brought to profit. Hopefully the under the new focused structure Management can drive the momentum needed. The changes made give me more confidence that the transition from declining newspaper and magazine distribution to sustainable higher margin businesses can be made, but there are issues which need to be addressed. Tuffnells looks fixable in short order. Pass my parcel clearly will take longer, it is a bigger challenge and in the mean-time a significant drag on profitability. The board need to show better signs that they can make a material and profitable business here soon, the current cash flow and realizations from disposals should buy them a little time and space to deliver.
Guitarsolo
26 Oct 2017
Re: Results 4Tune, "11% dividend against a loss in share value of 30%..... not a successful investment in my book."Perhaps not and this is one of my worse investments in that regard. But I am a very long term investor and the paper loss in share price is not something I worry about (for now). I would be far more concerned if the dividend was cut when in fact it is being raised. To be honest, I think the share price is going to recover to 130p over the next 12 months and then who knows if the company can return to profit growth. Of course, I would have preferred to be buying at these prices rather than when I did. I would buy more now if I wasn't already about as loaded as I like to get with any one share (about 7.5% of my portfolio). Today should be about analysing the company's results, which I think are pretty good in the circumstances.Guitarsolo
geta4tune
26 Oct 2017
Re: Results 11% dividend against a loss in share value of 30%..... not a successful investment in my book.
Bill1703
26 Oct 2017
Re: Results "... I am surprised not to see a bigger leap in the share price (although as I type it is ticking up!) to at least where we were before the recent wobble - just over £1."Exactly GS - though I did call it the other day... they would pay (actually, increase) a dividend which the market patently doesn't trust, deliver resilient results, and the shares would bounce - but not much. The market simply doesn't want to know about such a supposedly structurally challenged business, it doesn't compute on its currently paranoid radar.Fortunately, any patient value-orientated investor doesn't have to listen to the market... have trawled through the results now, hard to say exactly where they are vs expectations with the significant restatements and so on... but I think they are pretty decent!The profit performance in the main News biz looks particularly good. Going forward, they are driving further efficiency initiatives, the significant debt reduction should see lower interest on a full FY basis, and (as GS says) they are optimistic on eliminating early-stage C-a-C losses within a couple of years - and this is a clearly capable and proactive management team, which is unlikely to make the mistake of over promising.Underlying FCF is down, as expected, but still strong - I see no reason why it cannot be sustained around this level, at least. Whatever the market thinks, the Board appears pretty confident in the sustainability of the dividend - so, I believe, should we be. FCF cover down to 1.5x but still above the market average, and EPS cover remains broadly in line with market average - management knows how to generate cash, and the balance sheet is sneaky-strong.CasaB is right to beware "value traps", of course... but I don't see one here, there is real value to come out, and for all the evident structural decline in the business, management are wasting no time in shrinking the business (cost base and capital base) at least as fast. Not sure when the market will reappraise it... but we can await this at our leisure with a divi yield still, as of today, nearer 11% than 10%. 150p would not be a particularly demanding valuation...Unless I am missing something... always possible, of course, though by now my experience tells me that the market is just as likely to be missing something as I am (IMHO).
