Hardboy
26 Jan 2018
Re: John Jakes and Pheonix - 9.1% OWT: Whether it is the spouses or the directors themselves makes little difference to me - but someone who understands the business thoroughly and knows the people running the business needs to show some confidence that this is oversold, or we should see some resignations. As Pyuek points out we have paid them very handsomely for destroying the value of our holding, so they should have some spare spondulae lying around
pyueck
25 Jan 2018
Re: debt an growth Gamesinvestor completely agree with your great post.Only thing I would add is that actually rather than becoming more efficient actually what seems to be happening in Dignity’s case is management are creaming off any profits for themselves. The company paid more last year to the top four directors than it did in dividends to shareholders. Add to this is that the company launched a crazy drive to increase prices rapidly, then blamed it on a changing consumer. No, No, the consumer hasn’t changed, management screwed up.The fundamentals of this company make this one still look very expensive when you take into account the terrible outlook for earnings from the last update. No real idea why this one ever traded over £20 but for me can’t see a reason to buy this.
pyueck
25 Jan 2018
Re: Contrarian Investing Ok onewayticket, good luck to you and take it easy.
gamesinvestor
25 Jan 2018
debt an growth Dignity, like many companies -- CVS is another one (with some of the same board members at Dignity - the CEO is a non-exec at CVS), expand via acquisition.That's all OK, but it's not if you end up paying too much for the practice you are buying. Think about it logically, why would the independent funeral practice or vetrinerary practice sell up to DTY or CVSG?1. The price is so attractive that the owners see many years of their earnings all rolled up into an attractive offer price, they then maybe get to work a year or so and then leave.Something of this is witnessed at CVSG, that in their last report highlighted the difficulty in finding Vets -- well why would they need them, they already bought them right? Obviously they are leaving once they have had their payoff and into the sunset.2. The practice (funeral or vet) was struggling and finding hard to absorb the costs and turn a decent profit?3. They are offered better pay and conditions by the new consolidator.In all three of these cases, the costs are rising. OK you could argue there are cost savings to be had by pooling the administration. Well yes that's possible maybe on the accounting, but you still need people at each individual practice fronting the business as well as those that deliver i.e. Vets, Funeral Directors.That leads me to the difficulty that Dignity now faces. If it's growth is based on acquisition, that is going to be so much harder to achieve now that it's debt has racked up to 5.7X EBITDA or whatever for 2018, isn't it?Looking at the suggested earnings for 2018 of 82p it stands on a P/E of 13.3 and an expected growth (granted this is finger in the air stuff) of 9% -- well it ain't cheap and a dividend of 2.9% on today's closing price of 937.I think some of the guys on the CVSG board are getting nervous also. Games
onewayticket
25 Jan 2018
Re: John Jakes and Pheonix - 9.1% Hardboy.Two differing points of view. I just think it will probably be the spouses that buy in again and when the dust has settled. Too much controversy otherwise and I think they call it Ethics.owt
onewayticket
25 Jan 2018
Contrarian Investing puyek,May I suggest you concentrate on your own investments. My portfolio is of no concern of yours and I am seasoned enough at the markets and what they throw up. That said my p/f is doing very well and I've placed a few more investment stakes for the next 3,6 and 12 months. Some showing, some not yet. Some income, some speculative. I am a patient investor and a new kid on the block with Dignity since 19/1. [link] due diligence
pyueck
25 Jan 2018
Re: John Jakes and Pheonix - 9.1% onewayticket - if I am honest you don't sound very chilled, you sound a little on edge.Not saying you are but maybe you are getting a bit blinkered on this one. that I mean sometimes its easy with a stock to just get in a mindset and try to convince yourself you are onto a winner, irrespective of the facts.I have made lot's of mistakes in the past:- Increased investments in falling stocks to try to win back losses- Not sold stocks even when fundamentals were awful, due to my ego not wanting to accept a loss- Getting in too heavy on a risky share- Thinking a share was undervalued, not because of fundamentals but due to the share price having fallen significantly from it's peak.I'll be honest, no idea what way the shareprice will move next, although in my opinion this one looks expensive still and the management look greedy and their recent strategies have failed. The biggest thing I have learnt myself is don't ever get too deep in a stock to keep you awake at night. Spread things out, don't bet your house on one punt paying off or not. Good luck to you and keep it cool.
Hardboy
25 Jan 2018
Re: John Jakes and Pheonix - 9.1% OWT: "There would have been an outcry if Board of Directors had made this announcement and had then piled in immediately afterwards. "I don't think that's true, I think when any bad news is released by a board, if they think markets have over reacted, the market would expect them to pile in. As they haven't the market can only conclude they think the share price is still over valued.
onewayticket
25 Jan 2018
Re: John Jakes and Pheonix - 9.1% pyueckI like to think these things through myself as it starts to set a base figure in your head for where it should roughly be settling. Pheonix have analysts and would have decided what was cheap, so I suspect did John Stewart Jake's broker.I am actually very chilled here. Cryogenically so and have plenty in reserve for any top up opportunities.Own due dil
pyueck
25 Jan 2018
Re: John Jakes and Pheonix - 9.1% Onewayticket. Not entirely sure why it matters what somebody else bought the shares for? If they bought them at £9.50 or £10.50 what difference does it make to you? Keep it cool mate, you have put your cards on the table and said you think this is a buy, I think it's a sell, let's see how things play out.
onewayticket
25 Jan 2018
Re: John Jakes and Pheonix - 9.1% I thought the next logical question given share price movements on the day would have been how much do we think each paid for their share holdings.I'm happy to start things off.JSJ - On the day it was taken up to £10.55 if I remember correctly. So I'll hazard a guess at an average of £10.25Pheonix - I'll go for somewhere like a £10.10 average. Though they may have started on the same day as JSJ I think it went to £10.35 on the following days.Own due diligence
onewayticket
25 Jan 2018
Re: John Jakes and Pheonix - 9.1% John Jakes has forked out £20 MillionPheonix have forked out £25 Million.Not small investments and bot will eclipse any Spouse or Director buying. Point noted though on the confidence boost it might give the share.Own due diligence
onewayticket
25 Jan 2018
Re: John Jakes and Pheonix - 9.1% old_punterThere would have been an outcry if Board of Directors had made this announcement and had then piled in immediately afterwards. Can you just imagine what the headlines would have been. It would have been national news.I honestly think this new pricing should have been handled in a completely different manner and in a non-market / price sensitive way. The pricing adjustment on the basic funeral side could have been trialled, if not nationally then regionally. Say for 3 months. Then if and when it was successful and say led to more funerals because of the cheaper cost (that double whammy effect) then they could have rolled it out nationally. If it had a financial impact then mention it. If not and it was financially not "material" then don't mention it. Furthermore the digital spending side of things could also easily have been tweaked without any RNS mention, but with reference made on the profit and loss accounts. On the counter side to all of this they have achieved massive publicity for lower cost funerals and I also think that the Board have drawn a line in the sand and painted the absolute worse case scenario and that things won't be as bad. Becoming more competitively priced should be compensated with more business.I also think far less fuss will be made if it is the spouses that buy back the stock. Its all that bit more private. Whilst we wait for any developments on spouse or director buys we now have two highly credible share holders on the register with a healthy 9.1% stake between them. John Jakes and Pheonix I think will do extremely well out of their stakes.Don't be surprised if John Stewart Jakes gets offered a position on the board. his links with the stairlift business could prove invaluable. Off to watch a few others.Own due diligence.
Hardboy
25 Jan 2018
Re: John Jakes and Pheonix - 9.1% OP: "the CEO said they do not have much of a clue how the new strategy will impact 2018 " but you'd think they had some confidence in the long term strategy (or offering thier resignations.) The important thing would be to send a positive message that they are confident they are the right people to lead the business. If John Jakes & Phoenix can react so quickly after first hearing the news last Friday, you would have the thought the directors who prepared the news would be able to act at least as quickly. As far as I am concerned the lack of director purchases is almost akin to a confession of lack of confidence in their own ability to run the business.
old_punter
25 Jan 2018
Re: John Jakes and Pheonix - 9.1% OWT,Might have looked a bit opportunistic but directors would have been entitled to buy having made the announcement and I think they should have done to make money and to send a positive message. Puzzled why they did not although as the CEO said they do not have much of a clue how the new strategy will impact 2018 except that debt covenants will not be breached "but they would say that wouldn't they". Beyond this year they should resume being the steady sound business they were perceived to be before, though I think the previous rating looked too high.Am tempted to buy at this level 965p but if the price should drift back into the 900-950p range shall definitely be buying again.
