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BT Share Price is currently a train wreck...
Surely due a bounce soon
"BT Group is still a work in progress in my opinion."
yes...but then again...every company is ...given the need to adapt and change in whatever market anyone operates in
for BT it is whether they are adjusting as per the analysts( City) expectations... and as such their earnings etc...are ..as expected
...at this stage of the "work in progress" ...
Thanks Rodmitchell.
My primary concern is both a return of my capital and a return on my capital. That is why entry points for BT share ownership is important.
Anyone can trall back through the BT threads, I did own it previously, but have subsequently offloaded my position, essentially because of preservation of capital.
BT Group is still a work in progress in my opinion.
Thanks SEA7, but job opening has no impact on long term valuation of BT Group. This is an operational issue and not strategic valuation issue.
https://www.sportico.com/business/media/2021/bt-sport-dazn-deal-1234640746/
A BT spokesperson said: “We’re in discussions to explore ways to generate investment, strengthen our sports business and help take it to the next stage in its growth. The discussions may or may not lead to an outcome and we will only progress with any option if we feel it’s the right one for the business and our shareholders. At the moment, there are three options: 1. outright sale; 2. a partial or stake sale; 3. no sale and continue with the status quo.”
https://www.shropshirestar.com/news/business/2021/09/16/bt-to-create-1000-new-jobs-in-birmingham/
BT to create 1,000 new jobs in Birmingham
By John CorserBusiness Published: Sept 16, 2021
BT has announced it will recruit around 1,000 new people at its new flagship Birmingham office which is welcoming its first staff through its doors.
"I suggest you read the independent BT pensions report. There was annual report that was released some time ago. Very good reading. Forget that 1b as the limit of the liability."
I've read through the Pension Teach-in, released in 2020, and the recent BTPS Triennial review, as well as interviews related to the trustees wanting to eventually fully takeover the pension scheme through a DIY buyout. The deficit goes up and down, but they are planning to use a stabiliser mechanism to ensure that surplus funds don't get trapped in the pension fund in the event of a buyout. It's pretty clear that the BTPS will be unloaded in the next 10 years, possibly considerably less than 10 years.
https://www.lightreading.com/opticalip/fttx/deutsche-telekom-ceo-keeps-bt-options-open/d/d-id/771946
"I would say that in the next 12 months something is going to happen with the [BT] asset because the shareholder side is changing rapidly," he said.
and...
Höttges said on the call, unsurprisingly, that he would definitely be having discussions with Drahi.
https://www.investingcube.com/bt-share-price-undervalued-says-one-of-the-biggest-shareholders/
The BT share price was given a much-needed vote of confidence by Deutsche Telekom, which own 12% of BT, said, “We see value in the company”. The German Telcom’s chief, Timotheus Hottges, said the under-fire British firm had solved “a lot of the issues” that were previously weighing down the share price.
"This is all speculative on your behalf fleecy and has nothing to do with the underlying fundamentals of the company."
It's actually Fleccy. Every investment in stocks is speculative, your posts are as speculative as mine. You could be right, BT stock could fall from here and should that happen, at a certain point, I'll top up big time and bring down my average price per share lots. Alternatively an announcement could come out of the blue, like the Drahi's RNS, and the share price could double. There are loads of companies with lots of debt and a high P/E, you're just repeating the narrative put out in the negative articles; Articles could just as easily have presented a different narrative, like talking up BT's future opportunities around IOT, FTTP, Secure communications for business, etc, etc, etc. The reason the articles don't mention BT's opportunities are purely down to a vested interest narrative. I'm invested in both Vodafone and BT, but the recent articles about VMO2's volt offerings were entirely aimed at reducing investor sentiment in BT, with no mention of the current MVNO agreement with Vodafone, so it's a good example of articles targeted at BT investor sentiment.
This is all speculative on your behalf fleecy and has nothing to do with the underlying fundamentals of the company.
Your hypothesis is based on the premise of an insider acting. If that insider doesn't act in accordance with your premise, then what do you fall back to??
Hence my requirement for margins of safety. I want insurance policies, and my easiest insurance policy is margin of safety.
I have my margin of safety, then your insider can act how he likes, if he acts as you suggest, I make money, if he doesn't I still make money.
Basically I like to make money with a very high degree of probability.
I suggest you read the independent BT pensions report. There was annual report that was released some time ago. Very good reading. Forget that 1b as the limit of the liability.
They are agricators, they take all the long term broker analysis detailed spreadsheets and aggregate them into an average.
If 2023, then these will be reflected, you just need to go through the fully body of analysts reports, not just the free '1st page summary. 2024 and future years maybe yes and maybe no.
Ooops 2025 £2bln.
Hornblower, just pointing out that BT expect to have cost savings of £1bln from year 2023 & £2bln from year 2023 onwards. The market isn't looking this far ahead as of yet, but long-term shareholders should. I intend holding for the foreseeable future and I will average down if the fall continues.
"This is why the market is not convinced, and this is why the share price is declining."
I won't analyse, or dispute your figures, since BT are heavily investing in infrastructure. I'll just top up as and when I see fit, since I view BT as cheap at the current price either way. Who's to say that Drahi wont announce a doubling of his investment, or some other investor shows an interest, what would that do to your analysis? How does your analysis explain the rise to 204p in a matter of months, and then subsequently dropping back, also in short order. The market could change it's mind in less than a day, all that matters to me is that I see BT as a safe investment long term, and it's currently cheap by my personal reckoning.
Cpt.Hornblower
Interested to know who these "forecasters" are .... these "prophets" and "experts"
We are not exactly living in a nation where any so called " experts" have a good track record
BT’s total pension deficit stood at £1.1bn at 31 March 2020, down from £7.2bn the year before, as liabilities dropped from £59.4bn to £53.3bn, according to its full year results.
The telecoms giant said that the £6.1bn reduction in deficit mainly reflected an increase in the real discount rate, deficit contributions paid over the period and positive asset returns..
....
I strongly disagree.
Net sales revenue are forecast to be decline marginally for the next 3 years, so negative revenue growth.
EBITDA forecast to grow very marginally from 7.4b to 7.9b over 3 years
But net debt is forecast to grow from 17.8b to 19.7b.
So we have negative revenue growth, EBITDA growing 500m but net debt growing 2b.
Importantly the decline in RoE over the period, shows the 'value' of the business declining for each unit of share holder funds (or Book Value).
And then we still have the pension deficit on top of this.
This is why the market is not convinced, and this is why the share price is declining.
fleccy,
Drahi is not dumb, he wants to buy at lower price. Retail holders will get rinsed out. DT’s chunk is in its pension fund so no need to sell. I believe Drahi is after all those weak hands before making a case for BT to be broken up.
I strongly disagree.
Net sales revenue are forecast to be decline marginally for the next 3 years, so negative revenue growth.
EBITDA forecast to grow very marginally from 7.4b to 7.9b over 3 years
But net debt is forecast to grow from 17.8b to 19.7b.
So we have negative revenue growth, EBITDA growing 500m but net debt growing 2b.
Importantly the decline in RoE over the period, shows the 'value' of the business declining for each unit of share holder funds (or Book Value).
And then we still have the pension deficit on top of this.
This is why the market is not convinced, and this is why the share price is declining.
"BT is getting bought and the lower price is great for the buyer! Even with the open secret of huge holdings by DT and Drahi, the naked short strategy is working just fine."
The combined shareholding of Drahi and DT is below 25%, watch what would happen to the share prices if an individual entity announced a 30%+ holding.
The current stock price is meaningless in BT's case; Distressed companies can be pressured through forcing the stock through the floor, but BT isn't in that category. The only way the current low price might be better for a prospective bidder, is that he could build a large holding at a lower price, but at some point he'd have to pay a big premium to buy the company.
"For those that just look at the share price. I strongly suggest looking at BT Group's enterprise Value."
Hornblower, BT's debt isn't an issue based on BT's Revenue, Net Profit, and EBITDA. Since the Enterprise value is based on the sum of the market cap and debt, it doesn't necessarily assign a value to the individual assets combining to form a company.
If a company is in a distressed state, and drowning in it's debt, it's easy pickings for vultures to move in, take over, and asset strip. Since BT isn't in a distressed state, with easily manageable debt, any takeover would need to price the assets well above the current Market Cap/Enterprise Value.
BT's financial debt is around £12.5 Billion. with around £6 Billion added for lease liabilities, totalling approximately £18.5 Billion. Any investment in FTTP/5G isn't money down the drain and adds value to the assets.
In summary, since BT isn't in a distressed state, the current Market Cap/ Enterprise value wouldn't come close valuing BT's various assets in a takeover bid. BT is worth considerably more than the current Market Cap suggests.
BT is getting bought and the lower price is great for the buyer! Even with the open secret of huge holdings by DT and Drahi, the naked short strategy is working just fine. Stops being hunted, holders being tested and frustrated to dump. Glencore and Anglo were too indebted blah blah blah back in 16. Only fools listen to analysts working for buyers to buy at lower price.