Kier Group - KIE Stream Log

Shorts are closing and people are buying in. Volume is high today and yesterday. Share price represents about 1.5 year's earnings; way too low. Broker notes put 150p as near-term target. I'm invested and aiming for £4 before year-end. Debt is reducing, even without selling Kier Living, according to the numbers in the recent RNS. All seems good as far as I can see. Hedge-fund inspired hysteria through shorting, people comparing it to Carillion. Now returning to normal. Not like Carillion after all. Debt is under control, good contracts, seems to win new ones every other day.

Do you have a link on Andrew Davies' quote about other contractors Ripley? Regarding patience, not an awful lot needed in my opinion. The share had been talked down and shorted hard and Davies kitchen-sinked all the issues in his review. The share price dropped steeply. There are loads of tip sheets and broker notes now talking about Kier. I reckon a p/e ration of about 6 would be conservative and on the earnings that will be reported in September, I think that will be over £4 a share. That's my medium term target and looking at the speed of the fall, I think it could get back there in a month or two.

Well, the market doesn't seem to agree with your opinion. Kier has jumped 20% this morning. No news that I can find to cause it. I'm guessing something positive has happened and hasn't been announced yet.

Probably not £10. I'm expecting maybe £4-5. None of Kier's business produce double digit margins. You might need a different industry if that's what you're looking for. 80p to 400p is good for me. Moving strong today. People talking about shorts closing.

[link] Are Kier and Thomas Cook share prices on the road to recovery? Investors have long speculated that the pair were on the road to ruin, however, Kier’s plan to offload its housing unit to strengthen its balance sheet and Thomas Cook’s talks with China-based Fosun could change their fortunes.

Arguably yes, but expectations for the price of Kier Living have already been marked down -- it was nominally on the books for around £180m and Davies put it up for sale at much less, maybe £120m, though it's not clear how much of the land he's already sold. Kier Living contributes a small amount to the overall group profit, so if he gets anything more than £100m (a bargain price, I imagine) it'll still make a massive dent in the debt, reducing it to around 50-60m for the group debt. I'll be happy with that. That level of debt seems very low for a business with turnover of £4.2bn and profits of around £90m without Kier Living (current profit is around £100m a year -- I've seen somewhere that KL contributes about £7m of that).

The reason why is got to 60p is because hedge fund shorters were selling into it, and no one was buying because there was no positive news coming out of the company. That changed on Thursday last week. Shorters are starting to close out, just a little for now, but maybe more later.

Kier went up 30% because the RNS revealed that debt was reducing, not spiralling out of control. Also, the news about the sale of the housebuilding division (Kier Living) will bring debt down to a very manageable level and it sounds as though the sale has been largely agreed. I'll be more confident when the deal is done. Also, revenue is good; £4.2bn previous yr, only slightly less this last yr at £4.1bn. Also new FD to replace Bev Dew who messed things up a little when he misreported debt earlier this year - lost the trust of investors.

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