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Thanks Seagull - I wish all my trades are as well timed! Actually, I prefer to think of myself as a longer term investor but have increasingly got round to the view that even then you can't ignore the trading element of investing. A trade can either add to or detract from a patiently cultivated investment. It's something I'm still learning. The Jim Slater method is described at http://www.thisismoney.co.uk/money/diyinvesting/article-2425500/Investing-legend-Jim-Slater-market-beating-stock-Zulu-Principle.html. I use a whole bunch of metrics since his favoured one of PEG only works for profitable consistently growing companies. I then score all the results and chuck them out to scatter diagrams for easier visual analysis. It's a bit time consuming with all the data gathering but I think its invaluable since it allows me to summarise a whole bunch of relevent but diverse financial and other stats. Keeping that all in my head would be impossible. Happy new year asft
Well it looks like you called it about right it is does not look like it will hit my sub 80 buy target. Going off topic I have never heard of the walker method what do you make of DJAN I bought at £40.24 & £44.55 but they still look good value to me. Good luck with CRE going forward.
Thanks for the response. Nobody has a monopoly of answers (not even my database!) and it is good to exchange views. I agree about companies being too eager to do deals and not spending enough time actually making the existing business work and I note that the only correlation between executive performance and pay that has been found are inverse ones! I am not friend of highly paid management. Still I think Creston is attractive compared with other stocks in favour such as RNO and WIN. It has a much better balance sheet and overall financial performance going back over 10 years. The difference is that the latter two having had near death experiences and have got new management (or apparently reformed management) have the advantage of showing some improvement so on the strength of this the price doubles/triples. Given the sp is the discounted value of all future earnings I'd rather bet on an average of 5-10 years of data even if the latest news is not good (but not fatal in my opinion) rather than the opposite. Also continually going in and out of stocks trying to finesse the timing merely racks up costs via the bid-sell spread
The fact this has been continually a poor performer makes me wonder whether 1) it will continue to be an under performer for a good while yet 2) it is finally about to turn the corner / have a turn around It's certainly given me food for thought. Thanks for the post (and thanks for yours too, seagull)
Agree with much of your post. Do not agree with reasonable management imo it has been both poor and over rewarded with far to many generous option packages. It is vital management of businesses understand how value is created not by issuing equity but by jealously guarding it instead of the "heads I win tails you lose" self-issuance of share options which has happened at CRE on regular basis over the yrs. Cheap stocks are usually cheap for a reason a low PE tells you more about the quality of the business/management than its worth. However, I could see this becoming a takeover target if it gets cheap enough Havas own 6%. The management being replaced placed would also cause the SP to re-rate imo and of ii cannot by very happy with these latest results. However management here must be fully aware they need to deliver and I do not think they can afford another earnings miss after giving a positive outlook going forward for a 2nd time. I would consider buying below 80p but I think it may fall further as so many investors seem totally disenchanted with latest set of poor results. For a long term share holder CRE has been a serial under performer and for that reason my guess would be the SP settling between 70 & 75.
The SP will settle?
I've built a pretty comprehensive database/analytical tool I used to evaluate shares based on the Walker method. Creston has always come up as one of the admittedly value biased cohort of other shares I compare it against. The almost universally negative comment about Creston here and at iii made me think. I've just looked back at the diluted eps figures for creston when it was riding high in 2005/2006. They are respectively 6.9 and 7.7. At a share price of 200p this implies a PE of 25/28. The last full year eps was 14.7 but the share price never got above 110 which is a PE of 7.5! The fact is that this stock has been de-rated and yes the recent interim results aren't brilliant but if you strip out one off costs they don't look as bad. Add in a strong balance sheet, a reasonably bullish forecast and in my opinion reasonable management (it's not the absolute level at which the board pays itself but the relative amount compared to its staff that I pay attention to) and I think this is reasonable bet. I've just taken advantage of a sudden price fall and topped up at 83p. Only time will tell if that was the capitulation moment....
so I have to agree...let's sea (gul)
The SP on 31/12/2003 was £1.40. In the intervening 10yrs Mr Elgie has spent in the region of 18 million of shareholders money on acquisitions. Most of his shares have been awarded to him through generous option packages and I think the SP of 89p 10 years on says it all really.
Agree, I remain invested here for that reason - fwd revenues look good. I also like the look of: "New clients include Bentley, HSBC, Novartis, Reckitt Benckiser and Sony PlayStation." And p/e very low and div raised.
may be on the menu shortly, though ...EV/EBIT fairly tasty already imv; management experienced and CEO is definitely aligned with our interests (nearly £2m in shares, I think..pls check); and markets tough, competitive but some room for growth perhaps ...so 2- 2.5 Ms (out of 3) is Jolly OK ...aaoo/no advice intended
IMO Creston has become a "jam tomorrow" company and the jam never seems to land on the shareholders bread. It would appear Mr Elgie always keep enough for himself though! I have sold and would not consider re-investing unless the SP was south of 80p.
http://www.cityam.com/article/1385685954/creston-stumbles-marketing-wins-promise-better-second-half? Creston stumbles but marketing wins promise a better second half by Oliver Smith November 29, 2013, 12:45am MARKETING firm Creston reported a nearly 80 per cent slump in profits during the first half of the year yesterday, missing market expectations and causing the company’s share price to drop by over seven per cent. The drop was due to the firm’s US agency losing a key contract and Creston’s high level of pitching activity, which led to profits falling to £1.7m during the six months to 30 September. “The end result is that we’ve won £7.9m of new revenue in the first half. The downside of that is that we incurred a loss of billable time during that pitching process,” Creston chief executive Don Elgie told City A.M. “We took a hit on the chin to go for that new business… to see the benefits in the second half of the year.” Revenue for the group fell four per cent to £35.7m during the period, but analysts remained upbeat on Creston’s performance in digital. Liberum Capital media analyst Ian Whittaker described Creston’s booming digital business – accounting for 52 per cent of total revenues – as “structurally positioned for rapid growth.” Creston’s share price fell 7.3 per cent to 92p yesterday.
http://www.brandrepublic.com/news/1222940/creston-launches-health-agency-hayley-dunford/? Creston launches health agency with Hayley and Dunford Hayley is the former managing director of Paling Walters, TBWA’s specialist healthcare agency, and Dunford is the former executive creative director. The pair will lead Loooped as its managing partners, and will hire new staff as it signs up clients. Loooped is majority owned by the communications group Creston, which owns agencies including TMW and PR agency Nelson Bostock as well as nine other health companies. The founders also have a stake. The three letter os in the agency’s name aim to represent Looops "triple-pronged approach" to align B2C, B2B and B2E (business to employee) marketing. Hayley said: "At its core, Loooped is a mash-up of brand strategy and creative ideation. Our difference is that we put as much attention into how a brand gets onto the shelf as off it." Dunford added: "Our mission is to ensure Loooped delivers lasting change by developing creative engagement that actually changes behaviour. Creativity is no longer defined by words and pictures alone, but by how brands behave and align across every touch-point." Hayley has a background in health and pharmaceuticals with expertise in global brand planning, most recently as a global lead on pharmaceutical company Pfizer at TBWA\Paling Walters. Dunford has been the creative lead for healthcare accounts including Pfizer, Roche and Galderma, as well as other brands such as Sky, Royal Mail, British Airways, LG, Nissan, Canon and Prudential. Loooped has offices at Creston’s headquarters in Soho, its health division office in Richmond, and its US office in New York. The two founding partners report to the head of health at Creston, Catherine Warne. Tim Bonnet, the chairman of Creston’s communications division, said: "I’m really thrilled to be working with Dick and Andy again – having spent several years being inspired and excited by their output at TBWA Group it’s an absolute pleasure to have their enthusiasm and talent in the Creston Group." This article was first published on campaignlive.co.uk
Someone buying in 10K chunks? S/p treading water at the moment - one day up the next down.
Some buys reading as sells here - yesterday was an up day (and so is today so far). Still looks rather under-valued to me and with decent yield and excellent div cover. Naked trader target is 120. Reviving economy should be good for revenues as spend on marketing and advertising increases again.
Very interesting news from CRE's Marketing Sciences subsidiary: http://www.mrweb.com/drno/frmemail/appointment2639.htm "Marketing Sciences sees turnover growth in Q1 By Jane Rudling. Filed in About Us | Home Tags: development At Marketing Sciences we can sometimes be a bit too modest, but we wanted to shout about the fantastic start to the financial year we have had. We are absolutely delighted to report a significant growth in turnover for the first quarter of the financial year, up 30% on the same period last year. This comes shortly after posting record turnover growth of 28% for the financial year ending 2013. With our core strengths in FMCG and retail research, we have increased turnover by expanding our digital and qualitative services and investing in our new sensory testing lab in Westerham, Kent. A number of new business wins, including frozen food specialist Iglo Group (formerly Birds Eye), energy company Shell and windows specialist VELUX, have helped drive expansion. In a challenging market I think this is an impressive first quarter performance, which we’ve achieved by expanding our services, winning new clients and investing in our staff – at the same time as improving our margins. We’re experiencing strong demand for in sensory and shopper research and we want to build on this and capitalise on the investments we’ve made. Digital is becoming more and more important in the research mix and, with one of the largest tablet-equipped field force in the UK, we’re helping our clients to take advantage of the commercial benefits new technology is offering. As we see confidence return to the UK economy, we expect growth to return to the market research sector and we are well placed to achieve strong half- and full-year results. With hundreds of tablet-equipped researchers across the country, Marketing Sciences has delivered more than one million interviews over the past year for the UK’s largest retailer, Tesco. If you didn’t see our blog post about this at the time, have a quick read here, as it’s an impressive achievement!"
Wow - CRE's Nelson Bostock are managing the ongoing PR in EMEA for a $1 BILLION campaign by HTC fronted by Robert Downey Jr (you must have seem one of his adverts on TV already).... This is a campaign designed to go on for the next 2 years at least. Great stuff: hxxp://www.tuicool.com/articles/fUZvyyE "'Hold This Cat': HTC and Robert Downey Jr. kick off $1 billion 'Change' campaign (video) 来自:Engadget Mobile | 时间:2013-08-12 15:01:00 | 相似文章(1) HTC INSPIRES CONSUMERS TO BE THE CHANGE MAKERS WITH NEW CREATIVE BRAND PLATFORM Robert Downey Jr. ushers in record investment and Change brand positioning Taipei, Taiwan - 12 August 2013 –HTC, a global leader in mobile innovation and design, today unveiled its most ambitious campaign to date. etc"
Another buyback just announced, this time 40k at 101.5p... I suspect that with all the corporate manoeuvrings in the sector (publicis, Omnicom etc),Havas will want to bulk themselves up asap to protect themselves. This may well speed up their acquisition plans. Havas already have a 6%/7% stake in CRE for those who don't remember.
im in, charts looking good to support 102-103 any company buying back its shares as it did again last week sees the value. GL
Good to see the share buybacks starting here. These should support the price nicely, though at 106p against a forecast 12.1p EPS with a 3.9p dividend, imo the share price should be nearer 135p-140p. Meanwhile, another new client win just announced: http://www.prweek.com/uk/news/1187206/dreams-begins-rebuilding-brand-fever-pr-things-wings/ "Dreams begins rebuilding brand with Fever PR and Things with Wings Lynsey Barber, prweek.com, Friday, 21 June 2013, 10:30am, The Nelson Bostock Group agencies will begin working on creative campaigns and a social strategy to help what was once the UK’s biggest bed retailer regain its market-leading position after a four-way pitch. Fever will handle creative campaigns and press office duties, while sister digital agency Things with Wings will lead social and community management. The majority of Dreams stores and the brand name were acquired by private equity group Sun European Partners earlier this year. Dreams marketing director Robert Beck said the new PR drive would ‘help reinvigorate consumer perception of the Dreams brand’. Fever MD Frankie Oliver, who will lead the account, said: ‘Our brief is to help Dreams re-establish category leadership. Our activity will centre on showcasing to consumers how Dreams "shares their love of beds" across national, interiors and social media while using local media to drive footfall in-store.'"
with this company, been watching this for a few weeks and doing some research,not invested at present but looking to buy here soon
Here's the interview: http://www.lse.co.uk/share-media.asp?shareprice=CRE&share=creston The numbers on CRE's new inclusion in the Government's procurement roster sound terrific: - should become a top 5 client within a 3 year period - there's a £500m budget - the Government has decreased the number of its agencies from 359 to 27, of which 3 are CRE's - CRE are included in 3 of the 5 rosters, more than any other group, and they're currently working on 6 pitches Other worthwhile points: - DE believes their digital growth is higher than any of their peers - the average tenure of their top 20 clients is 10 years. Lovely stuff in investment terms. - the Insight division has been well and truly turned around now.
Results today - CRE have smashed not only this year's but next year's forecasts :o)) Haedline diluted EPS is 14.66p EPS compared to the 11.1p EPS forecast per my post above. This is partly due to a lower tax charge (release of a prior year provision) - but even so the adjusted PBT of over £10m is well above the forecast £9.55m. The outlook statement is very bullish too, plus digital revenues are now up to 48%, which should prick up a few ears. To cap it all, CRE now have £11.2m net cash against the £58m m/cap. And there's a 3.67p dividend - almost a 4% yield. Finally, a separate RNS confirma a buyback programme is to start immediately, which should have a nice effect on the share price. Excellent stuff.
Interesting to see CRE moving up yesterday on a 100 point down day for the markets. Looks like CRE's TMW may be in line for new digital work from Sainsbury's: http://www.australiancreative.com.au/news/abbott-mead-vickers-and-the-art-of-seduction "Meanwhile Sainsbury’s is about to amp up its digital presence and has appointed a roster of agencies to support its incumbent, Dare. Rival retailers including Tesco, Waitrose and even Marks & Spencer have been boosting their personalised marketing recently, putting pressure on Sainsbury’s to do more talking with than talking to..... .....Likely candidates for new digital projects are Tullo Marshall Warren, AKQA, Big Mouth Media and McCann Manchester, with whom Sainsbury’s has worked in the past. In 2011, Sainsbury’s began its get serious about digital by beefing up its online management team. In its latest results, posted last month, it revealed the online grocery division of Sainsbury’s had increased sales by nearly 20% year on year."