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Below: Thanks for the positive feedback.
Agreed. I know I’ve expressed cynicism about some of his previous posts but Velo’s efforts in analysing and comparing latest results and his willingness to share and help others is a credit to him.
Always worth my time reading your comments Velo, you clearly do your homework. Hats off to you mate. cheers.
Error! >
"May...... is THE single worst performing BT month in almost every year in that period!"
------------------
Apologies, correction required!
Although it's close, I should have more correctly said that in SP terms, May is the worst performing of the remaining months of this calendar year
- as it is in fact - January, that is the worst performing month of them all, in BT's history, even when extended even further back beyond 10 years!
January is historically, the worst of all months for BT, for SP under performance.
"if MMs are indeed doing as you say, how about the anti-collusion laws and obvious lack of ethics therein ? I'm not naive but any audit would easily uncover that behaviour."
I think the notifiable threshold, is around 3% normally, but MM's can hold a higher percentage for clearing and settlement, within a settlement cycle. As long as the buyers aren't acting as custodians, and each holder is below notifiable thresholds, then quite big holdings could be built up across various institutions, in theory. Who knows how many you scratch my back, and i'll scratch yours type arrangements take place.
I can't explain the price of Bitcoin, or any crypto currency valuations, what's going on there. Will crypto collapse when the big money decides enough is enough? I can't help but thing the whole market is rigged, at various levels , and the only way to beat the system is to go long.
I added £15,000 worth of BT stock at 106p, and another £20,000 worth at 112p, simply because I believe BT is being manipulated down, so I'm putting my money where my mouth is. I'm also in no hurry to get out of BT, so I expect I'll probably still be holding BT, 5 or 10 years from now.
Final post -
Deconstructing the poor Q4 & Jansen's statements from both years at Q3 cumlative summaries
===========================
It was the fourth quarter that pulled the progress of earnings below the consensus average, if events go on to prove that market sentiment favours dead on accuracy of the consensus average above all else, despite balance sheet metrics performing within the two extremes of the analysts forecasts. And also impacted Jansen's forecasting statements for the past 2 years.
The prior year's final (19/20) result can only be described as shocking in that the Q4 final, destroyed the decent progress made up to the cumlative Q3 period, and with it Jansen's Q3 statement that all would be brought back into line with full guidance by the year end. And then he went and got himself self-isolated with positive Covid tests.
But even the consensus forecast was unprepared with the lowly result for the full year, hence the 'shocking' epitaph, destroying Jansen's promise of a return to full guidance by the year end as an empty promise, and the SP's subsequent descent to £1.
Again, in Q3 this year Jansen stated he was very confident the market would see improved positive returns in earnings by the year end.
- And the same thing happened again.
Instead of the prior £425m average per quarter net profit earnings achieved
- instead this Q4 final only produced less than half the average at barely £200m return! And that's why even the analysts lowly earnings consensus earnings forecast was too much to achieve, and left me stunned.
It came in lower than the consensus average (but still inside the forecast extremes) and in doing so made nonsense of Jansen's well meant platitudes at Q3 promising improved earnings progress.
There was no progress in net profit because once again Q4 is taking on a life if its own literally coming in at almost half the previous 3 quarters period averages at only barely £200m!!!
Two conclusions:
1)
Does 2 years of under performing Q4 earnings herald a period of BT becoming viewed as a 'cyclical' company?
In that, the great cumlative work at the Q3 period is undermined in the final Q4 period (two years running now) or is it all transitory, and all down to Covid lockdowns only?
2)
It reveals that for all the commendable changes introduced by Jansen, he tends towards soothing platitudes in his forecasts seeking to please, rather than reveal unpleasantness - because if not that, then I view him as having a weakness when it comes to guidance forecasting, despite all his many strengths.
I now take more notice of the analysts future guidance than Jansen's forecasts. It should be the other way round!
PS. If that sounds bearish - bear (pun?) in mind I'm invested in BT and seeking to top-up on any misguided market sentiment opportunities.
The end :)
SP momentum review concludes > > >
===================
. . . Pleasingly, the SP is now no longer in overbought condition.
So unless there's a deeper malaise, I expect the SP to recover it's momentum, once the results sink in to the wider market.
Just the remainder of May to deal with.
Now is the time to see if this new-from-last-November predominant bull trend changes the old school downbeat SP reaction to the results, as no historic big % months lie ahead until the autumn - so if that assertion gets broken before late autumn, then that would be seriously something new too, aided and abetted no doubt, should the first new year Q1 forecast (due in the next week or two) provide a change to all previous 3 year forward analyst consensus forecasts from:
down, down, down,
to
. . . up, up, up, which I think is more than a strong possibility!
PS.
All significant and predominant longer term trends are strongly bullish. Admittedly the flibberty-gibert Ultra Short Term trend turned bearish after last week but it is just that
- ultra short term, in outlook.
The trends that matter are still all uptrending raging bulls!
Good enough for me! Your opinion may differ:)
==========
Final post next on deconstructing Q4 and Jansen's RNS statements
SP momentum review:
==================
A week or so before the results I lightly posted of 2 potential 'bull traps', so the catalyst of results day bringing them to the fore is not really that surprising
- or wouldn't have been, had I made a meal of those posts.
But as said, I posted them lightly as didn't want to make an issue out of them as both are based on probabilities only, and were not stake-your-life certainties. I believe they have had more prominence than international events.
Had there been no results due, I would have pressed harder on the two bear points as they were 'bound to' have an effect, regardless of the results
- unless results surprised hugely to the upside.
The first was the monthly 'seasonal' historic price action over the years, and that is, for the past 5/6 years, May has overwhelmingly closed consistently lower than it opened and coincidentally based on probabilities, is THE single worst performing BT month in almost every year in that period!
(Including the May of the previous record breakout in 2018! (that 6 month bull run now beaten by this current bull run that commenced from last November).
The corollary of that, is that late autumn (Oct/Nov/Dec) are, on historic performances, the best performing months of the year for BT!
However, the first trading day of this month of May closed at 167.95p suggesting this month will have difficulty closing above that price, based on probabilities.
Secondly, I did follow up on later from that post with another post of the SP entering overbought condition (and coming out of overbought can sting a bit, when a stock is in a predominant down trend).
BT has ceased being in a longer term predominant down trend, so I don't expect things to get massively worse.
AND those two downers were in plain sight, before the results were known, just waiting for a catalyst to enable them.
I don't think the actual results warrant that much reduction; it's more old school reaction than the results per se.
That buoyant SP increase leading up to the results, propelled the SP into overbought condition; perhaps some were thinking analysts forecasts would be smashed rather than just met, by buying in before results?
Pleasingly, the SP is now no longer in overbought condition.
So unless there's a deeper malaise, I expect the SP to recover it's momentum, once the results sink in to the wider market.
Just the remainder of May to deal with.
Now is the time to see if this new-from-last-November predominant bull trend changes the old
Thus post concludes on next page > > >
Actual Annual Results v analysts guidance concludes > > >
=========================================
Pension Deficit forecast:
Consensus Average = . . . £9.75bn
Minimum = £7.5bn > - > Maximum = £11.3bn
BT posted results of: £7.98bn
RESULT = BINGO!!!
BT fully met consensus target guidance for Pension Deficit by coming in at the lower end of the deficit forecast range
- a smidgen closer and it was on course to "beat" the entire analysts forecast range.
No miss there. Fact! :)
============
(Reported) Net Debt forecast:
Consensus Average = £17.906bn
Minimum = £17.011bn > - > Maximum = £19.315bn
BT posted results of: £17.82bn
RESULT = BINGO!
BT's actual Net Debt fully met consensus forecast.
No miss there. Fact! :)
============
Summary:
None of the major metrics under fundamental headings missed the analysts expected forecast range.
All performed within the "fuller" range of analysts expectations.
Market expectations met. Fact. :)
Maybe the negativity is some reviewers demanding accuracy to the letter in achieving "average" consensus rather than compared to the full range forecasts as some already focusing on the pension deficit bettered the consensus "average" by £2bn.
Negatives?
Net Profit was a little, slightly below, 'consensus average'.
I was expecting it to exceed the average, to sit at the upper end of the analysts forecast range.
Not a biggie though, as still inside, within the entire forecast range - as all headings were.
All in all? All analysts forecast headings met. No disasters.
===========
Now from the above, the SP next - in a separate post.
Actual Annual Results v analysts guidance
==================================
I will be posting 3 opinions. Intially a comparison of actuals v market guidance
Secondly a post on the SP momentum,
And finally a brief deconstruction of Q4.
--------
Whatever, I can find no evidence of BT's results being below consensus full forecasts. It goes without saying that yes, the vast majority of the balance sheet metrics are (and were expected) to be down on 'last year'.
LAST YEAR - not down against analysts forecasts.
So it's the comparison of BT's results to the consensus forecasts that are important.
PS. If you see reviews of failure to meet consensus forecasts please copy/paste them here; I'm betting they'll be comparisons to either reduction % against last year or simply irritations of near-to failures to achieve the consensus "average" rather than being on the plus/top-side of the consensus average - not failures to meet analysts fuller forecasts.
It makes all the difference to forming your own view.
So, from the top.....
-------------
(Reported) Revenue forecast:
Consensus Average = £21.370bn
Minimum = £21.252bn > - > Maximum = £21.540bn
BT posted results of: £21.331bn
RESULT = BINGO!!!
BT fully on consensus average target guidance for Revenue.
No miss there. Fact! :)
============
(Reported) Pre-Tax Profit forecast:
Consensus Average = £1.868bn
Minimum = £15.26bn > - > Maximum = £2.039bn
BT posted results of: £1.804bn
Result = Acceptably within entire consensus range for Pre-Tax Profit.
No miss here. Fact! :)
============
(Net) Profit forecast:
Consensus Average = £1.521bn
Minimum = £1.236bn > - > Maximum = £1.651bn
BT posted results of: £1.472bn
Result = Acceptably within entire consensus range for Net Profit, but a little dissapointing in that, it confirmed Q4 underperformed again, as it also did last year.
Not a miss, but an acceptable within-analysts-range achievement.
============
This post concludes in next page > > >
I'm awaiting Velo's analysis (hopefully later) with bated breath ......
For what it's worth .... my analysis is that this share was struggling to get over and hold at £1.70, just before results, and the results might well have been "expected" but they weren't stunning and the market reacted accordingly.
We've had a good rise lately from about £1.25 on budget day (early March) through to £1.70 just before results. Many people were commenting that the share might be getting ahead of itself a little bit (and I remember one poster suggesting this share should be shorted from £1.65 - which proved very insightful and correct!). Even "Bullish Velo" admitted that the share was overbought and could be due a retrace.
So what now? Well there didn't seem much of an appetite to push back through the mid £1.60s after the results and it looked, at one point, as though we might be sinking back towards the £1.40s. News of a decision not to strike, news on BT Sport, news on a new broadband partner are all things that should move the share price upwards again (towards £1.70) but whether it will be enough to breach the year high (of about £1.72) is debatable.
My own view is that this will bounce around between £1.50s and £1.65s until one, or a combination, of the things above bring more clarity. As the year progresses (and we get nearer to the first dividend payment) then I can easily see this heading for £2 by end of December 2021 as incomer seekers return.
In the meanwhile, I would suggest this is a good share to hold ... and top up if we get below £1.50.
Over to you Velo ........
Trenners
Hi fleecy, if MMs are indeed doing as you say, how about the anti-collusion laws and obvious lack of ethics therein ? I'm not naive but any audit would easily uncover that behaviour.
"Reading recent press coverage, each article seems to state different reasons why the share price dropped so much on Thursday."
My opinion, for what it's worth.
For a start stock markets took a big hit on Thursday, and BT has a high Beta so more volatile when the market swings. BT and Telecoms in general has been beaten down, and appears to be unfashionable as far as the market's concerned. In BT's case the pack appears to be steering the herd downwards with a consistent negative narrative, and finding negatives where non exist.
My own view is that the market makers target certain stocks and sectors, for prolonged periods of time, building holdings covertly while manipulating the prices down using algo's. At some point the sector/stocks become the next big thing and prices are inflated to the moon.
Telecoms is a no brainer, as far as I'm concerned, the world is moving online for everything, and eventually everything will be controlled via IOT.
"... each article seems to state different reasons why the share price dropped... possible a combination of many things but the ones mentioned are:... missing analysts targets... etc., etc.,"
--------------
Hoping to post a fuller deconstruction of achieved v main full year forecast metrics for sometime Sunday,
- and then a summary " opinion" of initial mkt reaction to current sentiment/ outlook.
Reading recent press coverage, each article seems to state different reasons why the share price dropped so much on Thursday. Can someone sum this up for me? It’s possible a combination of many things but the ones mentioned are: Only 7.7p divi, missing analysts targets, not happy with Openrreach/joint venture, lack of interest in the sale of BT Sport, poor revenue for next year and maybe a few other reasons.