nk1999
25 Jan 2018
Telegraph- Questor "Update: Capita: Our consistent hold rating on Capita, the outsourcing giant, has not so far been justified by events: the shares are 45.6% below the point at which we first covered them in October 2016. Some of the most recent pessimism in the market no doubt results from a perceived similarity with Carillion, which went bust earlier this month. But investors had also reacted badly to its interim results in September, falling by 12% on the day. Woodford Investment Management, which owns a significant stake in Capita, said the share price fall looked “very harsh to us in the context of Capita’s already low valuation”. Woodford pointed out that the yield was now more than 7%, “which suggests that some investors fear a dividend cut may be required”. The investment firm said, with a new Chief Executive now in place, “clearly that eventuality cannot be completely ruled out, but having met [him] during the month we are reassured that decisions around capital structure and the dividend will be informed by a clearer long-term strategy for the business, something we expect to hear more about later this year”. It concluded: “In the meantime, we have maintained the portfolio’s exposure to this business, seeing the potential for significant value creation as Capita is restored to the high-quality, successful and well-run business that it used to be.” Questor says “Hold”."
evenlongershot
25 Jan 2018
Re: Added at 360p for a 360 Bought into both Capita and IMB yesterday/todayt - both seem to have been in free fall lately and while I'm unlikely to time the bottom in either I'm happy to sit tight for a bit. Will probably sell out of Capita on any short term lift, but IMB definitely happy to hold at this level if just for the dividend.
Johandesilva
23 Jan 2018
Added at 360p for a 360 Having sold at 425p on Carillion fallout. Hopefully will also do a 360 in direction but I have enough oxygen to hold my breath for a while.
Johandesilva
23 Jan 2018
Re: Top 10 Picks - New Top 10 for 2018 Other issues for Capita:1. Military reduction2. NHS issuesWe don't really have access to a breakdown of revenue streams do we?
Johandesilva
23 Jan 2018
Re: Top 10 Picks - New Top 10 for 2018 "the one constant has been, relatively speaking, very healthy FCF generation."---Employees of Carillion believed the profit/margin numbers had somehow been overestimated to hit targets. Pehaps the market is thinking this is the case with Capita? I sold some Capita in anticipation of this fall after the Carillion news sent Capita shares up briefly. Not bought the shares back in but could do at any point."Free cash flow (FCF) represents the cash that a company is able to generate after laying out the money required to maintain or expand its asset base" [link]
Bill1703
20 Jan 2018
Re: Top 10 Picks - New Top 10 for 2018 "I understand challenges to company come in the form disruptive technologies like in America, but also increased costs due to complex unreliable electric and hybrid cars. On the positives it is a wonderful trusted brand with a great cash flow. "Thanks JDS - yes Kolwezimundele, AA is an equity valuation "growth" (ie. recovery) story, not one of growth in the underlying business - albeit, as JDS suggests, the latter is a relatively stable, resilient business with a well-invested competitive position and wonderful cash flow characteristics. As such, it is very much a "special situation" - and has to be viewed as speculative. Ultimately, the opportunity lies in the disconnect between how the equity market is currently valuing the entity and the debt market's view... of course, no guarantee that it isn't the equity market which is right here, ultimately, though more often than not it does tend to be the other way round.Similarities with Capita, since we are here... also a free cash flow story IMHO. Throughout all the turmoil - management upheaval, accounting concerns and then change, both balance sheet and business structure over-bloated by several years of too many acquisitions (for too much money) - the one constant has been, relatively speaking, very healthy FCF generation.And now we have Carillion - hardly a shock that the market is shaken by it, and that CPI gets another smacking. But it is a different animal, and ultimately I expect its resurgence - whether this year or later - to be driven by this FCF quality, which may also yet save a dividend which the market now seems resigned to losing (though it is always a choice, and it is one which new management may well make).
Mikeclayton2
19 Jan 2018
Re: Why do pension funds lend shares to shor... A theory - I’m a pension Fund I have a decent holding in ABC I want some more, but not at this price. I lend my holding to XYZ until date W I know XYZ is going to short ABC. ABC duly falls then before XYZ is due to return my stock I buy some more ABC at the lower price. Result a Saving in the new holding plus the fee for lending. I’m in ABC for the long haul.Maybe over simplified but I’m sure it happens.
Johandesilva
19 Jan 2018
Re: Top 10 Picks - New Top 10 for 2018 kolwezimundele - Whooops! Wrong stock , Bills in the other stock too, sorry!
Johandesilva
19 Jan 2018
Re: Top 10 Picks - New Top 10 for 2018 kolwezimundeleBill has made it clear multiple times that the growth can be done by paying off the debt to more reasonable level that will in return leave more cash for dividends and a valuation closer to what was seen after IPO of over 5+ pounds. Possible fund raising to get rid of remaining debt before then would knock this valuation down somewhat but really looking post brexit.I understand challenges to company come in the form disruptive technologies like in America, but also increased costs due to complex unreliable electric and hybrid cars. On the positives it is a wonderful trusted brand with a great cash flow.
KayCatso
19 Jan 2018
Why do pension funds lend shares to short? I agree. I dont understand why pension funds lend stocks for a fee to see it destroyed and have the value of the stock go down or at worst liquidated. cannot be good for pension fund returns. I hold Capita and hope it is strong enough to survive and will see a rebound when some good news comes out and the shorters have to settle up.
give the dog a bone
19 Jan 2018
Re: next Carillion true ! heavily shorted no doubt by the scalpers... another outsourcer with thousands of jobs at risk soon to be out of business. The shorters will be rubbing their hands at their prospective gains. wonder who is lending them their stocks? Mmmm! bet it's the pensions funds and the asset managers lending your stock to the shorters for a small turn.
kolwezimundele
19 Jan 2018
Re: Top 10 Picks - New Top 10 for 2018 Bill,AA? Why AA - what's the growth catalyst????
shugg1e
16 Jan 2018
next Carillion Not touching this looks like going the same way as Carillion
contrarianstyle
16 Jan 2018
Capita falls as Prudential switches pension administrator Bad news continues...I`ve topped up at 3.90 support...Capita: falls as Prudential switches pension administrator
Johandesilva
13 Jan 2018
5% up anything to do with Carillion crisis? Rise happened around the same Carillion news came up.
