Lupo di mare
23 Oct 2015
Re: For a change Glen Moreno's a bit more confident, having shelled out $145k on shares.Dunno what the "free content from the digital big beasts" could possibly consist of in the way of meaningful product.
old_punter
23 Oct 2015
For a change This board being mostly bearish (self included) has read this stock rather well, unlike a number of boards which I could mention have been reverse indicators.Seems to me the two main bear points are that the sunlit uplands of digital could prove unprofitable given the threat of free content from the digital big beasts, and the CEO who is a marketing man, nuff said. Mr Campling who is leading the charge among the bearish brokers has a target of 750p I think. Its a difficult stock to assess, a good enough reason to leave alone.
Hardboy
23 Oct 2015
Re: New for me Share rice is down 25% on the back of an RNS saying the EPS would be reduced by 10% at the most.Simplistically the fear is way over done.
gamesinvestor
22 Oct 2015
Re: New for me Fabius, Your guess is as good as mine m8.Pick one Games
Fabius1
22 Oct 2015
Re: New for me GamesWell I reckon £6 is on the cards but that feels generous compared with your red ink tip of £5.F1
Hardboy
22 Oct 2015
Beaufort Securities View I saw 3 brokers had downgraded their view on Pearson, but I think all had target prices higher than last night's close. Here is BS's view:"Pearson (PSON.L, 998.50p) - Buy Yesterday, Pearson released an interim management statement for the first nine months of 2015. Sales for the first nine months were 2% up in headline terms and 2% down if reported in constant exchange rate (CER). For Q3 2015, sales fell 2% in headline terms and 5% at CER. During this period, the company initiated sale of a lot of its assets. On 17th June, Pearson announced the sale of PowerSchool for US$350m, on 23rd July 2015 the sale of FT Group (FTG) for £844m and on 12th August 2015, sale of its 50% stake in The Economist Group (TEG) for £469m. The company has narrowed its earnings per share guidance for 2015 to be in the range of 70-75p from the previously guided 75-80p.Net debt at the end of period stood at £2.1bn (September 2014: £2.0bn).Our view: The first nine months of 2015 have been difficult for Pearson mainly due to the unfavourable exchange movements and challenging market conditions. Cyclical nature of the business and policy related issues weighed heavily on the company’s performance during this period. However, Pearson remained focused on its long-term strategy to move towards digital services having advanced technologies to cater to the rising demand in this segment. In view of the same, the company undertook a lot of initiatives including disposal of FT Group, The Economist Group and PowerSchool. In addition, it expects to invest in courseware, developing new products and building a single infrastructure to manage the resources and content. We believe Pearson has huge potential to enhance presence in online enhanced services by expanding product portfolio for a wider range of age groups. Furthermore, any favourable changes in curriculum might improve the UK and US college enrolments, thereby positively impacting the company’s performance. In light of the above argument, we retain a Buy rating on the stock.
gamesinvestor
22 Oct 2015
Re: New for me "don't look very good on my spreadsheet and I get 710"FRTEB,I'd say this is optimistic and if I had money in this, I don't having sold it in mine, my wife's and children's accounts, I'd be selling even now after yesterday's sell off.This is another company in denial, raising the dividend from 13p five years ago to 17p today when the revenue has fallen from £5.6bn to £4.8Bn, which adjusted for inflation is a massive drop and that's even before the sale of the FT etc.The pre-tax profit is even worse, falling from £702M to £347M and it could get much worse.In the meantime the debt has stayed up there at £1.9Bn which represents a hefty ratio compared to new lower profit levels.Personally, and obviously I don't have a crystal ball, I think you'd be lucky to get a fiver for these shares in the not too distant future.This, coupled with Fallon, who looks anything but a leader seems to be all the wrong mix for investment.On a more general note, unless you can find companies with some semblance of top line revenue growth, profitably of course, why bother risking cash?Games
nk1999
21 Oct 2015
HL View "Our view
earson has been trying to reinvent itself from a print-based education company, exposed to pressured Western education budgets to a digitally-focused business with an expanding emerging markets presence.The reinvention has been painful in the short term with hefty restructuring charges incurred along the way. And it is far from complete. Around 85% of revenues still come from Western markets, and some 40% of the business is still exposed to declining print-based sources. As the transition from print to digital continues, Pearson is likely to experience further revenue pressures, as sales from textbooks are replaced by subscription-based software revenues, which are initially lower but recurring in nature.Pearson is also battling some severe market headwinds. The US economic recovery is leading to more people in work and fewer people signing up for college courses, which isn't helping Pearson's North American education business (c. two thirds of sales). Western education budgets are under pressure generally and some emerging markets such as South Africa are also weak.In the longer term, Pearson still has plenty of opportunity to grow. Cyclical and policy related headwinds in Western markets are unlikely to last forever and over time, spending on education should rise, particularly in digital. The disposal of the FT, PowerSchool and The Economist Group for around £1.4bn sharpens the group's focus on its education business and gives it substantial firepower to accelerate the print-to-digital transition.In the near term, market conditions show little sign of improving. But the historic yield of 4.9% (variable and not guaranteed) means investors are at least receiving something while they wait for the prospect of better times."
FRTEB
21 Oct 2015
Re: New for me Games, I don't think PSON will disappear but what do I know. In the meantime the figures don't look very good on my spreadsheet and I get 710 on a chart without looking too hard. I'll have another look further down the line if the sp gets that low and then review what state the business is in but "continued challenging market conditions" in the RNS hints at further profit warnings and the divi is only just covered...
gamesinvestor
21 Oct 2015
Re: New for me "Look at basic or diluted EPS for a real picture"FRTEB -- Are we looking at the future HMV of the education industry?Is it the case that it's going to be very difficult to extract value from online, just like the music industry experience?Games
FRTEB
21 Oct 2015
Re: New for me "EPS would be at the lower range of 70-75" That is adjusted EPS. Look at basic or diluted EPS for a real picture of profitability, then work out the real P/E...
Hardboy
21 Oct 2015
Re: New for me The trading statement said full year EPS would be at the lower range of 70-75. So we're now looking at a PE of under 14. I think the fall is overdone.
Hardboy
21 Oct 2015
Re: New for me Agree Lupo.Not an encourgaing update, but they seem to be strengthening their position in the market, and the market is unquestionably huge & growing, so (I hope) this is a temporary blip while markets are subdued.
Lupo di mare
21 Oct 2015
Re: New for me That wasn't a very encouraging update - lousy timing, Lupo.On the upside, there appears to be scope for considerable growth, globally, and much of the reduction in sales is out of their hands.Should I sell first thing and await the Finals, or hang on in there....? Doubt I'd get much of a price first thing, so probably hang on in there and enjoy the divis, but we'll see.
Lupo di mare
19 Oct 2015
New for me I read of concerns that Fallon might not spend the proceeds wisely. I don't know the guy as others apparently do, but what I do see is a company that has decided to ditch some biz, that they've held for yonks and know very well, to concentrate on other biz that they also know very well. I'm ok with that.The yield's good and safe enough, too; so worth a punt - IMVHO.
