numberbiter
24 Feb 2017
Re: NEW ARTICLE: Chart of the week: A 'b... It all depends what you mean by cash conversion. If it means you are comparing 'cash inflow from operating activities' with 'net profit' then the conversion ratio should be around 120%, because the Income Statement includes non cash items such as depreciation and amortisation. Now, if the Income Statement includes £2.56 billion of impairment charges, then the cash conversion rate must be far higher than this 120%.So we need to know exactly how this 90% has been calculated. I suspect that the net set of accounts will show increasing inventory days and if these have increased significantly over twelve months it would be a clear warning sign.
holland44
24 Feb 2017
Re: NEW ARTICLE: Chart of the week: A 'buy l... I'm new to looking at PSON, so apologies if I say anything blindingly obvious to LTHs. Today's 5.5% rise (by 12.10) is an interesting response to Pearson booking a hefty extra loss of £2.56 billion due to impairment of goodwill. At 681 the suddenly-increased SP is over halfway towards closing the Gap Down from 800 that occurred in January, but isn't yet close to re-testing the downward trend line identified by John Burford. The jury is still out: as Burford says, the drop to c. 550 in late January could be "purple [sub-]wave 3 of red wave 5" rather than the final purple wave 5 shown on his daily chart near the end of his article, and "the larger pattern seems to need one more down before a big up can start". We are still in wait and see territory, or at the very least if someone is waiting to buy, perhaps they should just commit a proportion of their funds for now.I see from today's announcement that Pearson is predicting operating profit for 2017 of £570m to £630m, adjusted earnings per share of 48.5p-55.5p and cash conversion in excess of 90%. The yield is a chunky 7.5%.
numberbiter
23 Feb 2017
Re: Schroders Schroeders must know something the rest of us don't know!
Hardboy
22 Feb 2017
Schroders At least someone believes in Pearson - Schroders increased their stake to over 11%
nk1999
20 Feb 2017
Liberum From ADVFN:"Education publisher Pearson was under the cosh on Monday as Liberum highlighted concerns about the company's cash flow.Pearson, which is due to report full-year 2016 results on Friday, has already stated its headline results and given guidance for 2017, so Liberum said there shouldn't be any major surprises."However, we expect the details of its 2016 results to concern the market particularly around cash flow. We also do not see further major cost savings as a risk to our sell case."Liberum noted that at the full-year 2015 results presentation, Pearson emphasised that its underlying cash conversion rate for 2015 was 95% as opposed to the reported 60% as there had been a number of 'one-off' issues at the group."The implication was that 2016 should see an improvement in the reported rate. However, when it reports numbers, we expect the cash flow numbers to look weak and to raise further questions about their cash flow profile."Liberum also pointed to goodwill and said it expects to see more significant writedowns. It said given that goodwill is a reflection of future expectations of cash flow, this would suggest a more negative long-term picture.The brokerage said there are two areas where there could be risk to its bearish call into the FY numbers: Pearson could announce a new cost-saving programme and/or disposals, particularly around its 47% stake in Penguin Random House.Liberum reiterated its 'sell' rating and 360p price target on the stock."
nk1999
15 Feb 2017
Liberum "More problems for PearsonBehind-the-scenes details on pricing at Pearson (PSON) have given Liberum further cause for concern over the educational publisher. Analyst Ian Whittaker reiterated his ‘sell’ and target price of 360p on the stock, which rose 10.25p or 1.6% to 661.25p yesterday.‘US higher education textbook rental company Chegg reported full-year results [on Monday]. As part of the Q&A, management gave some very valuable insights into the work it has been doing with Pearson on its next pricing policy in e-textbooks and also what it expects moving forward,’ he said. ‘Of particular concern is the risk of price deflation for the textbook model, which would pose further risks to forecasts. Reiterate as top “sell”.’ "From Citywire.
II Editor
13 Feb 2017
NEW ARTICLE: Chart of the week: A 'buy low, sell high' candidate? "Will the other shoe drop for Pearson?LSE
SONearson plc has had its share of problems for about two years with a string of profit warnings (PW) culminating on 18 January with its latest – and possibly worst - horror story of missed targets. ..."[link]
Hardboy
07 Feb 2017
Re: Why the rise today? One can never be totally sure, but 1) Markets generally positive today. 2) Most sellers have been flushed out over the last 2 weeks since the Trading Statement, so there is probably not much selling pressure, and there is some optimism (albeit chancy optimism) about the future, so it is seen as a risky, but potentially rewarding recovery play.
Apostrophe
07 Feb 2017
Why the rise today? Any ideas? I decided to invest when the price plunged, so I'm above water, and happy to stay, so any insight on the rise would be helpful?Otherwise I'll jump
gamesinvestor
04 Feb 2017
Defining education [link] article in the FT, and one that should concern any PSON investor. The field is opening up and Pearson does not have a good handle on AI which could be a game changer in online learning.Here is an extract from the article :-"""“Rote learning is done — computers can do that,” says Sue Dettering. “The kids are going to have to have the interpersonal skills to work in groups, to communicate well, be creative, arrive at an answer in many different ways.” """Games
nk1999
03 Feb 2017
Liberum From Citywire:"More pain for Pearson investors Liberum predicts more pain ahead for long-suffering Pearson (PSON) shareholders.Shares in the education publisher crashed last month after it issued the latest in a string of profit warnings, saying revenues would be lower over the next two years and warning it could sell its Penguin Random House book venture.The shares have rallied 11% from those lows as amid investor hopes the worst for the company is over. Yesterday they were up 5p at 643p.But Ian Whittaker, analyst at Liberum who has long rated the shares his ‘top sell’, said that optimism appeared misplaced, saying another profit warning was likely before the year was out, and retaining his 360p target price. ‘Short term, we expect the full-year results on 24 February to highlight further issues at Pearson and we would be particularly concerned about two issues, cash-flow conversion and goodwill write-downs,’ he said.‘We would also ask why a company that had 0.4 times net debt to earnings at the end of 2015 now feels the need to sell its 47% stake in Penguin Random House (and, according to some web reports, may have already sold its Brazilian Sistema business). Our view is that it could be a sign that there are worrying signs regarding its cash-flow / balance sheet,’ he said."
II Editor
25 Jan 2017
NEW ARTICLE: Are these 10 big dividend blue-chips in danger? "Shares in publishing group LSESONearson plunged 30% last week (18 January) on the back of the firm issuing a profit warning and taking the axe to its dividend payout.It is the latest heavyweight name in the @GB:UKX:FTSE 100 to cut its ..."[link]
LK Hyman
24 Jan 2017
Re: No surprise 464,"Unless you want that sweet 7.5% dividend"There's no guarantee that the divi is gonnae be sweet after the 2016 final one. This is what Fallon said t'other day:"The Board intends to recommend a final dividend of 34p for an overall 2016 dividend of 52p in line with our guidance, but as a result of the factors above we intend to rebase our dividend from 2017 onwards."God knows what "rebase" means but, as sure as God made little green apples, it means "reduce".I don't know how Fallon has the barefaced cheek to cling on to his C suite office. If he were a decent man he'd Fallon his sword.LKH on the flybridge thank God I sold this munter back in the day when I did
Akis1999
24 Jan 2017
Re: No surprise That interview from 2013 on the Standard is illuminating. His arrogance is telling!"He sees plenty of competitors, by geography and by discipline, but no one pursuing the same strategy as him. It has taken the group into the realm of technology giants Apple, Amazon and Google. “We see what they do as largely complementary,” Fallon says"!!!!!
464onlock
24 Jan 2017
Re: No surprise Unless you want that sweet 7.5% dividend, I don't see any capital gains on the cards for next few years if anyone invests now. Can see it going down a further 25% or so. They want to sell their 47% stake in Penguin Random House to free up some cash which is fine, but I'm skeptical of their digital strategy, the direction they now want to go. With increasing use of textbook sharing services, falling enrolment in US colleges etc, wouldn't touch it SON/pearson#value" target="blank" rel="nofollow">[link]
