casabanker
01 Mar 2017
Re: Price fall This morning I have sold approximately 30% of my holding in NXR. The proceeds are being put into a placing being done by HICL infrastructure fund. The price is 159 which is a small discount to the current sp but there are no dealing costs. In addition, the yield is 4.8% which will give me more income than NXR even on the reduced stake. HICL should give me more capital protection. My holding in NXR still represents around 6% of total portfolio value which I may have to reduce further. I am truly disappointed with NXR's share performance. It has been at these levels for far too long considering its quality products and good results. The problems that clearly are outweighing those advantages are the pension deficit and the South African economy. In its favour, I think the pension deficit will shrink significantly over the next year as bond yields rise but the SA economy looks bust and it's not being tackled by the current government. Clearly more time is needed for NXR to see the improvements it deserves but NXR is cyclical and the last thing needed is a recession particularly in the UK. The business was performing well in SA last year but it is unclear how the current travails there are harming turnover.Casa.
casabanker
24 Feb 2017
Price fall NXR continues to be one that concerns me most in my holdings of over 30 investments. The closing price is 160.5 which is a loss of 3.3% today. There is no news and I am suspicious that the South African element is the culprit assuming there is one. The ANC is not performing very well and the economy is suffering. Their bonds have only just escaped junk quality recently. In time, I may well have to reduce my holding here as stability of capital continues to be threatened. It's a pity as I am also trying not to trade too much. It's also a pity as the Company itself has been performing well with significant increases in dividend recently which, unfortunately has not been mirrored with a share price rise. I will keep monitoring and won't make any hasty decisions. Casa.
Hardboy
07 Jan 2017
Re: Rise Good comments Casa,I think the fear of a recession in the UK is valid, if possible rather than probable. As Brexit negotiations develop, and the post Brexit world becomes clearer, there is still a fear that businesses will move operations from the UK to elsewhere in the EU. Of course conversely if Le Pen gets in in France and other right wingers win upcoming General Elections, the EU could break up & the UK being the first on the route could be the winner; but I think that is less likely than the former. On the other hand, commodities are improving and likely to continue which should be a boon to the South African economy, which should also help Norcross.
casabanker
06 Jan 2017
Re: Rise I agree, Hardboy, a rise in interest rates and inflation will be limited. The inflation for the UK will be caused by the weak gbp so it's a one off. Sustained inflation is caused by resources chasing too few goods. I don't think the UK is about to reflate through a massive infrastructure programme similar to the one proposed by Mr Trump. Whatever Mr Trump does will certainly be inflationary. It's just a question of how much and far he will go. If it is excessive, inflation will spike and threaten the stability of the US economy. It cannot afford even a 3% inflation level as it will not be able to service its massive debt pile. That, imo, is the main reason inflation will not be allowed to reach high levels for long. On the positive side, the bond bull run has finished and that will help with the pension deficits. In addition, NXR are paying extra amounts into their pension fund every year as directed by the actuaries and commissioners running the fund. The situation is looking better for NXR but due to the instability of the macro climate, the last thing needed is a recession. Currently, it doesn't look likely but if Trump over spends, it could cause a recession even a depression in the US. That usually knocks on to us and Europe. Ah Europe, the model of financial stability and outright growth, lol.Casa.
Hardboy
04 Dec 2016
Re: Rise Seadog, Good & thought provoking post. Much appreciated.I'm not a technical analyst at all, though I realise many people are, so there is an influence; but my view of technical analysis is that it is a bit like stopping someone to ask the way, and them not being able to tell you unless you tell them where you've come from. You are where you are and which way you go from here has no relevance to where you came from, and all technical analysis tells you is where you've come from. (IMHO) Great that you are impressed with the product. I always think the best way to select shares to research is picking those whose products or services you admire. I'm not so sure interest rates are going to sore. Generally interest rates are pushed up to counter inflation caused by a buoyant economy. Whilst inflation in the UK is likely to be going up, it's driven by a weak pound, not a buoyant economy, so I don't think raising interest rates will do any good here; and where else in the developed world is it going to happen? OK - the US is expecting a rate rise, which I'm sure will happen soon; and maybe, if Trump goes on an infrastructure spending spree maybe inflation will rise and interest rates with them; but I think that's a possibility rather than a likelihood, and I don't see it being replicated in the rest of the developed world any time soon. I am more inclined to think we are in for a period of continued low interest rates.
seadoc
04 Dec 2016
Re: Rise Hardboy,If you read tealeaves: sp crossed the 20 day ma on 28/10 the 20 day crossed the 40 on 2/11 and it then got even more interesting the 20 day crossed a rising 200 day on 21/11 and the 40 the 200 on 22/11. I believe tealeaf readers call this the perfect gold cross.I just bought a new triton shower, it works much, much better thanwhat we had and hence bought in at 146p but I doubt my purchase of either shares or shower was the cause!Re: pension. For many years I regarded BT as an investment trust that paid better than average dividends based on ATST. I sold out early 2015 and with benefit of hindsight it was the time to go. Interest rates will soar, especially after, Brexit, Trump, Italy and it was close in Austria. If Marine were to sneak in in France and Angela gets a hard run in Germany then I think the pension deficit of both NXR and BT. become a surplus and in case of NXR P/E of 7 with covered yield of nearly 4% will be snapped up. The early birds will have worms in plenty.But just IMHO and, as always, DYOR,Regards,Seadoc
Hardboy
02 Dec 2016
Rise What has got into this baby? For months, even years I've been saying it is undervalued, and throwing money in to support my convictions, but despite ever improving results and dividend payments the share price floundered. Now suddenly it's taken off, and there could be a long climb ahead. Even if it reaches 250, the PE would only be around 12. What I do not understand is why it has suddenly changed course. I know the Pension deficit has been one negative, and that recent improvement in bond yields should reduce that worry slightly, but that hardly explains a near 30% rise in 3 weeks. At least I'm back in profit; but I'm still expecting more.
Hardboy
22 Nov 2016
Re: Motley Fool 17/11/2016 I can not believe that is the reason for 2 sucessive good days. Good results, good press coverage & tips; and the price goes down. No news and we have a very nive uplift. Still someway from fair value IMHO, but it's finally going the right way.
casabanker
21 Nov 2016
Re: Motley Fool 17/11/2016 It looks like interest rates are going to be on the turn next year. Trump is likely to receive approval for his plan to invest in infrastructure in the US. That investment is sorely needed and it is likely to give rise to a higher level of inflation. That will hit bond levels there and Brexit has caused the gbp to fall which is all inflationary. I hope the central banks are not too far behind the curve as we don't want hyperinflation. The actuaries will be able to adjust the pension deficit figure down from £97m significantly if inflation does spike. It's not as bad as it looks so relax, Hardboy, and take the lovely dividends in the meantime. Casa.
Hardboy
18 Nov 2016
Re: Motley Fool 17/11/2016 Isn't it interesting - Investor Chronicle rates something a buy and the price shoots up. Motley Fool rates something as a buy and the share price drifts lower. That says something about Motley Fool.
bizana
18 Nov 2016
Motley Fool 17/11/2016 Is This Too Good To Be TruePre-tax profit rose by 10% to £7.7m during the first quarter at bathroom fittings firm Norcros. Net debt fell from £29.2m to £27.5m, while underlying operating cash flow rose by 20% to £16m.The interim dividend has been lifted by 9.1%, and now stands at 2.4p per share. This suggests that full-year forecasts for 7.1p per share are entirely reasonable. That's equivalent to a dividend yield of 4.9%.A mixture of organic growth and acquisitions has lifted Norcros's after-tax profits from £13.5m in 2011, to £25m last year. But investors refuse to buy into this growth story. Norcros shares trade on a forecast P/E of just 5.7.What's the problem?Norcros has a massive pension deficit. According to today's results, the gross deficit on its UK final salary scheme rose from £55.7m to £97.8m during the six months ending 30 September. This is the result of falling bond yields following the EU referendum.Norcros currently makes a deficit reduction payment of £2.5m each year. This payment may rise in the future, hence the market's caution. But it may be worth remembering that bond yields have risen sharply since the US presidential election. If this continues, we could see a sharp reduction in pension deficits, as fewer bonds will be required to produce the income needed to fund pension obligations.In my view, pension risks are already fully priced into Norcros's share price. At current levels, I rate the shares as a strong buy for patient investors.
Hardboy
17 Nov 2016
Re: Interims Good results, a positive day for shares, and it's barely moved. This really is an unloved share. Oh well I guess I'll just lie back and take the dividend.
Hardboy
17 Nov 2016
Interims Another set of good results - sales up 8.5%, Profits up 11%, Dividend up 9%. Net debt reduced. The only down side is the pension deficit, with a quarter of profits going to support it. That aside they are proving a well run business which delivers consistent results. With a PE under 6, and yield around 5%, and being a growth business, this should still be a screaming buy.
casabanker
28 Oct 2016
Re: An IC tip of the week 28-Oct This report by IC highlighting the issues and opportunity with holding NXR shares is well overdue. The strengths clearly ourweigh the weaknesses currently and the share deserves to be uprated. Of course, there are threats as demonstrated by the two weak currencies in the countries of operation. Providing the countries' economies do not fall into recession, NXR will continue to yield excellent profits.Holding NXR is risky but the value is clearly there and it has been well managed in tricky economic conditions. I read continually about "value" stocks and all investors should search them out. NXR may well suffer in a recession but it will survive and at its current price a yield of 4.5% will be locked in. How's that for value?Casa.
Hardboy
28 Oct 2016
Re: An IC tip of the week 28-Oct The IC have been reading my posts!And look at the effect of a positive IC tip! Don't investors do their own research? If the IC said invest in hari kari half the readers would probably sign up for it!
