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Dignity Share Chat (DTY)



Share Price: 737.50Bid: 735.00Ask: 737.50Change: 7.50 (+1.03%)Riser - Dignity
Spread: 2.50Spread as %: 0.34%Open: 725.00High: 738.50Low: 725.00Yesterday’s Close: 730.00


Share Discussion for Dignity


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funeralman
Posts: 11
Opinion:No Opinion
Price:757.00
RE: buy
Thu 21:16
At the end of the day I cannot see anything that will make a real big difference from what was happening in the funeral trade prior to the CMA investigation, The big concern was pricing and openness, which dignity have already taken the hit on that one . The crem situation is very complexed and will be hard to change somethings.
I cannot see any great regulation maybe something that could be managed by trading standards.
In the past the CO-OP have had some major cock ups makes the headlines and then fish and chip paper.
Dignity will cope with any bad publicity and move on. Talk to Joe Public and they do no know about any enquiries or anything that is going on, Because funeral homes run under existing names that dignity bought a large % of people do not know it is dignity anyway. Back to regulation as it stands at the moment any body can set up in the funeral trade without so much as a CRB CHECK or any checks, if there was massive regulation it would increase costs more than present level as the councils, would have to charge, and people like HEALTH AND SAFTY ect, ect a big can of worms might escape,
 
londoner7
Posts: 610
Opinion:No Opinion
Price:752.00
RE: buy
Thu 13:21
Specs1, thanks for your response. You highlight three areas.
'Effect of report' - The level of publicity will depend on the media's asessment of it's newsworthyness. But whatever comes out will be a one time event and fade from the public consiousness. As an example, we all use and pay for energy so we're inclined to take an interest in energy headlines impacting our pockets, but a small % of the population will be in the market, so to speak, to consider the commercial implications of a report on the funerals business. I don't any media impact will have a longterm consequence on Dignity's business.

'Actions' It still isn't clear to me how the CMA will impact Dignity's business in a market/capitalist economy. Dignity's website has a copy of Dignity's response to the CMA. Dignity point to some possible outcomes and make the point that they already offer free funerals to sectors of the community. Let's wait for the full report.

'regulation' here I disagree entirely with your points. Yes. decent funeral directors would want to meet new regulations - if they are required - but will face higher costs, and an element of that will hit consumers. Less decent funeral directors will attract media attention driving consumers towards the larger groups who are better able to absord these costs across the group. Also, the reputational risk that comes with regulation tends to drive consumers towards the larger groups over time. Look at the poor reputation the low cost energy suppliers now have amongst consumers. The number of funeral locations has increased by 10% over the last five years. I've no doubt regulation will slow that growth.

A correction - in my previous post I questioned the view that creamatorium have high barriers to entry. Further reading suggests barriers do exist, primariliy capital investment cost, but planning less so.

However, this is an investment forum and it's in that context that I assess Dignity. For reasons I've outlined previously I think the next few quarters will be tough comparisons against last year, so I'll be watching for those to pass, hopefully along with the CMA's final report, before evaluating a possible investment in Dignity.
Specs1
Posts: 25
Opinion:No Opinion
Price:753.00
RE: buy
Wed 20:43
londoner7 - The effect that the report will have is that it will generate publicity and the public will become better informed about shopping around and avoiding being overcharged. If Dignity wants to be able to compete in this more enlightened market, it will have to lower its prices significantly.
There might be action taken against them with regard to their overcharging in their crematoria - they are currently the most expensive by far and the CMA is looking into how the market can be made healthier.
When it comes to increased regulation, most of the more reasonably priced funeral homes have nothing to fear. There shouldn't be anything that would frighten off new entrants - any decent funeral directors who want to make a success of their new venture would want to meet the standards that regulation demands. It was in fact the Co-op that was highlighted in recent years in the media for some practices that were well below where they should be.
londoner7
Posts: 610
Opinion:No Opinion
Price:729.00
RE: buy
11 Feb '19
Specs1, you're clearly up to speed on the CMA investigation and following your comment on Dignity's claim that their quality of service merited higher pricing was debunked in the CMA report I took a look myself. I agree with your conclusion

I was also surprised to see the argument I held when I was an investor that there were significant barriers to entry in crematorium was also debunked in the report.

But whatever the conclusions of the final report, short of nationalisation which I don't think even you would expect, what impact can the report have on Dignity's business?

They may demand, and enforce full transparency on costs, but Dignity appears to be moving in that direction now.
Anything else?

Dignity would love to see any regulation on business as this always benefits the incumbents creating a barrier to entry for new entrants.
Specs1
Posts: 25
Opinion:No Opinion
Price:716.00
RE: buy
9 Feb '19
Auson - No, you are wrong, it's far from over. As a result of their initial consulation, the CMA announced in November 2018 that they are consulting on a major funerals probe because of concerns over large price hikes, hitting people at their most vulnerable.
funeralman
Posts: 11
Opinion:No Opinion
Price:716.00
Re Buy
8 Feb '19
The consultation period may of ended in Nov18 but no one knows what the out come is yetThere are a lot of Funeral Directors with big axes to Grind Who will not have held back.One thing for sure is the big price greedy hikes have come to a end ,along with big profits.
Auson
Posts: 2,254
Opinion:No Opinion
Price:707.00
RE: buy
8 Feb '19
Specs1,

Consultation period finished over a month ago. Do keep up at the back !
Specs1
Posts: 25
Opinion:No Opinion
Price:714.50
RE: buy
7 Feb '19
Auson, the CMA haven't finished. They've only just got started. As a result of the overpricing they uncovered in their initial investigation, they have escalated matters to a more in-depth examination which might lead to enforced changes to the big overchargers - namely, Dignity.
ahha
Posts: 499
Opinion:No Opinion
Price:739.00
The Fed
6 Feb '19
No of course not! The Fed are propping up the American markets generally and the positive effect this has on the Dow lifts shares all over the world. I think now is the time to start buying some gold. Central banks are doing it...….even though they discourage US from buying it.In the last 20 years everything I invested in gold has increased 5 times...….that's better than my property that has increased 170%
Auson
Posts: 2,254
Opinion:No Opinion
Price:745.50
RE: Pseudo Markets!
6 Feb '19
ahha,

You think the fed are buying DTY ? ahha
What type of stocks do well when the market is falling ?
ahha
Posts: 499
Opinion:No Opinion
Price:745.50
Pseudo Markets!
6 Feb '19
Normally prices fall in February...….but these markets are being kept artificially high with buying by the FED.

It could go on till past April.......which is great if you are brave enough to take a punt.

But they could pull the plug at any time. I.......along with the directors am staying out of this market!
Auson
Posts: 2,254
Opinion:No Opinion
Price:738.50
RE: buy
6 Feb '19
londoner7,

The latest company update said 2019 guidance remains the same. Surely there are too many moving parts here to predict 2019 earnings, especially with the transformational plan and CMA review in play. The shareprice here is clearly being determined by uncertainty and that is why it is too cheap.
londoner7
Posts: 610
Opinion:No Opinion
Price:735.00
RE: buy
6 Feb '19
Auson, do you invest on the basis of earnings?
If so, what are you expectations for 2019?
Auson
Posts: 2,254
Opinion:No Opinion
Price:735.00
RE: buy
5 Feb '19
funeralman,

I think the CMA is done and dusted. I noticed a lot of buying just after the consultation period finished. All the while the shorts have been increasing. I think they are probably wrong. The only reason this is not at £10 right now is because of the CMA and the shorters.
funeralman
Posts: 11
Opinion:No Opinion
Price:735.00
buy
5 Feb '19
Auson,, Would not buy at the moment as I think it is un-clear to what could happen ,
I Would be interested to know what you think of the current position of the future is.
Auson
Posts: 2,254
Opinion:No Opinion
Price:735.00
RE: Jepgambardella
5 Feb '19
funeralman,

Are you looking to make money here ? The total number of shorts are down a bit.
funeralman
Posts: 11
Opinion:No Opinion
Price:735.00
RE: Jepgambardella
5 Feb '19
I think this is more a response to all the new simple cheaper funerals that have and still are springing up all over
With them owning 30 odd crems they will have valuable information of what other funeral directors are doing in the market.
Auson
Posts: 2,254
Opinion:No Opinion
Price:735.00
RE: Jepgambardella
5 Feb '19
funeralman,

Thanks for your input, do you think that this might be a response to the CMA review ?
funeralman
Posts: 11
Opinion:No Opinion
Price:727.00
RE: Jepgambardella
5 Feb '19
It looks like people who use it do everything on line, and then dignity must contact their nearest funeral home who then uses one of dignitys nearest crems the first 2 prices quoted will be ok for hostpitals, and councils who have to pay ( no one to pay or next of kin) the third price is what their cheapest basic quote is at their funeral homes with xtra for add ons. It looks like the share holders of dignity are going to fund this whether they know it or not.
Auson
Posts: 2,254
Opinion:No Opinion
Price:717.00
RE: Jepgambardella
2 Feb '19
SammyT,

Was this bit the give away 'Simplicity Cremations is a trading style of Dignity Funerals Limited, a company registered in England (registered number 41598). Registered Address: 4 King Edwards Court, King Edwards Square, Sutton Coldfield, B73 6AP. We are a member of the National Association of Funeral Directors
SammyT
Posts: 12
Opinion:No Opinion
Price:717.00
RE: Jepgambardella
2 Feb '19
Well if your looking at the bigger picture, I would be looking at this so called simplicity cremations that is being advertised in the media, nothing to comfirm who they really are but on a closer look at the small print on their web site.... trading style of Dignity Funerals Limited..

So whos going to benefit from any profit generated by this sideline, share holders, directors...
londoner7
Posts: 610
Opinion:No Opinion
Price:720.00
RE: Lots of moving parts
18 Jan '19
Auson, you ask a couple of questions.

"Do you think Phoenix have got this wrong ?"
I think their commentary on the CMA investigation and competition sounds valid, but I don't see where they get a valuation of three times the current price. If Dignity hit 84p EPS for 2018 that puts them on a PE of 8.4. at first sight that looks a fair valuation, but three times that at 25 looks expensive, particularly if you believe earnings will fall this year (2019) and the Q4 number suggest they will. Hence my caution.

"Can I ask what were your entry and exit prices ?"
My first buy was in Dec 2014 @ £13.4 and my final sell was in Feb 2018 @ £8.07, but my highest selling price was in May 2017 @ £26.74. I'm essentially a buy and hold investor following 5-10 stocks, but also do significant trading without fully exiting an investment I believe has long term value. During this period I made 51 buy/sell transactions in Dignity and made a compound annual return of 26.3% pa. In my book a good return but one that would have been much better if I'd accepted the turn sooner. As I said, a good lesson to learn.

While invested in Dignity I followed the mortality numbers closely - there's useful and timely data available from the ONS - and questioned some ONS assumptions. I expressed some of those points on this board and was generally proven to be correct. The ONS took improved mortality assumptions of recent years too far into the future and did not see the recent flat line. Hence I had a more optimistic outlook on Dignity (for want of a better term) than the market. Being proven correct anchored my conviction in Dignity to a point where I was not quick enough to accept that high pricing was resulting in a loss of market share that even acquisitions couldn't halt.

I still maintain my spreadsheets for Dignity in the hope that I see another investment opportunity, but that starts with a stabilisation of earnings following the change in strategy and any CMA outcome. The Q4 number doesn't show stabilisation, perhaps the Q1 and Q2 numbers will. I'm a patient investor.

Best, Londoner7
Auson
Posts: 2,254
Opinion:No Opinion
Price:700.00
RE: Lots of moving parts
17 Jan '19
londoner7,

Very informative post, Do you think Phoenix have got this wrong ? I think its only the CMA review is holding this below £10 right now and they were buyers at that level.
Can I ask what were your entry and exit prices ?
londoner7
Posts: 610
Opinion:No Opinion
Price:703.00
Lots of moving parts
17 Jan '19
I was invested in Dignity for many years. It was good to me and this clouded my judgement late 2017 and early 2018 when the warning signs were there, but I was slow to recognise them. I had invested a lot of time over years and knew the business very well, which contributed to a reluctance to fully exit at the time. It was a good investment and I learnt some good lessons from it's downfall.

But that's history.

I've been watching Dignity's progress over the year looking for another entry point but I still don't see it. The 2018 death rate is 1.3% up on 2017 but has dropped off significantly over the last quarter Q4 (around -4.5%), so it was a tough comparative quarter. The trading update refers to the £79m number as a better than expected performance and indeed it is - I make it 84p EPS, above consensus and close to the highest forecast at 85p. But Dignity has been well ahead of the revised forecasts all year. In April 2017 the consensus EPS forecast was only 68p. Knocking the Q3 number off £79m leaves £10.6m for Q4. Q4 is normally their 2nd best quarter for operating profits but in 2018 it was their worst. In 2016 & 2017 the Q4 number was over £25m - against those numbers £10.6m look poor inspite of the 4.5% drop in Q4 mortality.

There may be trading opportunities around the competition enquiry outcome, but from an operating level I'd like to see the full year accounts to understand this apparent poor Q4 performance and then the Q1 update in May.
Auson
Posts: 2,254
Opinion:No Opinion
Price:698.00
RE: Jepgambardella
17 Jan '19
ahha,

A bear trap is a trap for bears ( who I would suggest are the new shorters here ) Be interesting to see what their next move is as they might see their profit disappear.




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