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What relevance is all this talk of US markets and pound/dollar strength, Capitas revenue is virtually all from the uk, only 288M is earned outside uk and only 6M of that is outside Europe. I don’t get all this talk about US.
PMI surveys, whilst not hard data, is a very good leading indicator of where that part of the economy is trending. However, IMO, the key driver for the negative print (below 50) on the PMI, is the prices paid index, which is running pretty hot at over 60, versus a circa 55 expected print.
Personally, I really like today's Mfg PMI print. Along with a marked slowdown in another leading indicator JOLTS data from this morning, its just showing that the job market isn't running as hot as the BLS' labour data indicates. And that should temper inflation expectations and you can see crude oil selling off big as a consequence - OK a big build when a small draw was expected in today's EIA weekly report didn't help. But that's all good for inflation (both CPI and Fed preferred PCE should show this up in June when May's data is reported ) to moderate and BOE to act quicker than the Fed and set the UK economy off on a better (upward) trajectory. All of this points to a rewarding long play in CPI. IMO. Also, I'd keep shorting BT to make more money.
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Super interesting how media outlets present the data as "US manufacturing sector contracted in April" because... that data is based on the PMI survey which is not hard evidence of a slowdown, it's just a survey on the opinions of company managers. When the hard data releases land it'll support the dollar some more yet!
US economy
Stock markets fall after sharp US growth slowdown
Commerce department says gross domestic product growth decelerated to 1.6% at start of year as consumers slowed spending
Yes US is doing really well said the blindman to his dog!
One thing for sure most markets are unstable at the mo!
If you invest it has to be for the long term as short term bets are very risky.
DYOR
King Canute keeps pushing the tide back (Not)
So many French Connection wits here!
DYOR
Its really amusing you think the US economy is booming!
USA economy is booming - ADP says private company payrolls increased by 192,000 in April, more than the 175,000 which economists expected. - Pay also up by 5%
If BoE MPC thinks UK £ can go up against the US $ on rates then A.Bailey will be making a grave error of judgement!
Lol - Just tuned in to see what the word on the street is .......and guess what....... same sh*t another day!
Agree "the June statement could well be the game changer" - just not in a good way lol
@Savage
I think you are wrong - I think the June statement could well be the game changer assuming the new CEO strategy is well received.
Remember that the new CEO strategy was the game changer at RR and we all know how that played out and a similar thing could easily happen here.
Any announcement that the business is performing better than forecast (back in March) and clear sight of FCF would set a proverbial rocket under the SP too.
By time we get to June the £ to $ rate will probably be about 1.185... I can't see the June statement being a radical positive game changer and Capita is either going to look ripe for poaching or... perhaps it could be looking precarious as an ongoing business.
I believe that the June statement is going to be a real indicator of where this company is going. If we get a positive statement with clear goals & timelines I’m happy to hold but if we get more of the JL type b…..t ( which I don’t believe we will with AH) then we are ‘all doomed’ as Fraser would say.
Even with a positive statement the markets may well not give an upside & want to wait to see actual profits.
Major shareholders generally have diversified portfolio's, hence they don't have much impact if they lose on one investment. But for retailers like us, its mostly a huge loss..
Anyway, CPI lost over 50% of its value since march and now on a record low.. They need to turn their business into profit, for that they need to bring back their reputations. Its not happening anytime soon. its been hovering close to 10p for a while now... I wont be surprised if falls below 10p in the next few weeks.
That probably will be the best entry point I think.....
DYOR.
Good luck!
Thank you JG & ISE for your valued inputs.
Still, the market looked at the past and reacted but the major and largest shareholders holding their nerves and looking into the future, which my feeling is good. GLA.
Imo it was because the increased cash outflows resulted in an increase in debt, similarly to HY and really to be expected.
Similar story this year with increased outflow costs associated with savings, last year pension deficit, other investment costs.
Hopefully the guidance for 24 is an underestimation and may get some improvement H2, but more than likely into 25.
Not sure the June capital markets will boost us much short term.
This is a mother----ING dog.
"I still cant understand why the SP dropped so sharply from the 20s to the present 13+ soon after the results in March"
Read again the result , you will understand lot better. we are heading towards 11p or may even test 9p before the result. FTSE at record high... On a heavy market correction, this share unlike others will have to fall sharply. No wonder , gradual increase in short positions confirm that..
Good luck!
AimMaster2018 - Good Q... I actually haven't yet made a loss (trading since Dec 2022) but... I absolutely do expect to book losses and I'm not taking anything for granted. My wife has booked a loss on Synthomer though, quite a sizeable one but not outweighing her other profit making stocks which saw her through.
I still cant understand why the SP dropped so sharply from the 20s to the present 13+ soon after the results in March. Market knows what was coming but, yet reacted very negatively. But the consolation is none of the big shareholders have dumped their holdings.
To me, the most important positive thing that came along with the results is the £100 mn cost cut. With the £60 already announced it is £160mn. What amazed me was that this guy, AH, just two months into working at CPI to announce this reflects his sharpness in his assessment of the group 's working, identifying problem areas and coming up with this cost reduction, within this short period of time. In contrast JL took 5 years to come up with the £60 mn . That makes the difference. I even suspect that this £60 also would have been on the initiative of AH, because AH was already into CPI from about July 2023. Imagine £ 60 was saved for 5 years we would be having £300 mn in our kitty. Fast forward 2026, we are going to have £ 500 + mn in our system.
£160mn doesn't end in savings alone. How about the coat saving on the overall base cost. We will be less by more than 5%, which will enable CPI to quote competitively and enhance the prospects of contract wins and higher margins. All sounds great. GLA.
BT needs alot of money to spend on infrastructure over the next few years which would put upward pressure on cost. Once BT breaks below £1 savage, u may get better than ur buy zone 🤣 imho
End of the month with CPI looking to post a bullish dojo star on the monthly.
Looks promising here for the next couple weeks.
Taken a decent stake here.
GLA.
What about ones where u may have made hefty loses 🤣 ? U only talk of few success stocks which am sure many could take about all day long. I remember making 400% on one stock giving me profit over 150 k imho
GoCPI - Press ahead and short BT, you'll have company as UBS seems to have encouraged others to do so too... probably gains there to be had in short term imo what with others getting in on the action! - I'll be keeping on buying BT tranches on the dips, where I see value. I don't short stocks, as I'm fairly new to investing and cannot stomach the risks of short selling. So far I've had a good run though, 10% profit on a fairly hefty TUI stake plus 20% on Currys before that too, they netted me my biggest gains but other stakes have helped me out too.
Broomtree - Nope not yet buying CPI, I recently bought another BT tranche to add to my existing stake, I may buy another one if BT SP hits my target area... There's possibility I could pivot towards CPI but... I'll wait on another batch of UK economic data ahead of the bank rate decision next week at the very least, and much more likely I'll wait longer until the next set of CPI results to see what those look like.