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Nohearts,
Any idea why Dignity have been calling for greater regulation in the industry ?
Hind should read bond holders!
The fact that their debt is so long and low is probably the only decent thing the useless management have done.
The only problem may become if they breach the various debt covenants. If you read the hind reports you will see how badly The ratios have deteriorated. Still headroom but still heading south and it puts either the dividend at risk or a rights issue if the CMA really get stuck in.
This is different, though. Never before has the funeral industry been looked at so microscopically and found to be full of rip-off merchants. The CMA has got its teeth into it (quite rightly) and Dignity will never again be able to keep charging £5,000 for a funeral when other outfits can provide EXACTLY the same for £3,000. Their spin of providing quality where others don't has been shown to be tosh, furthermore they won't be able to get away with charging top whack for at their crematoria, they might even find themselves divested of a few where they hold monopolies. This share is only going one way - and that's permanent!
ahha,
I don't know about skilled but I like to read.
The most interesting thing about this company is that it has £860 million invested in trust ( for the provision of funeral plans )
If I be absolutely honest, though of course I look at annual reports, I take them all with a little pinch of salt and a healthy dose of scepticism. They are far too complicated for my tiny brain....and half the time they are presented in a way that flatters the company. I ALWAYS think that things are worse than they say....and until a company is stripped back to the bone.....efficiencies increased to the maximum and expenses reduced AND signs that the directors are showing an interest in their own company I do not touch them for some time after their decline. It can take 2 or 3 years for things to recover so there is no hurry in my book.
I know that instincts are not the most scientific way to invest. But my success in investing is based on experience and realism. So far I have not done too badly. But one of the BIG lessons that I have learned is how costly it is to jump into a share too soon. and how costly it is to base one's investment decision on past performance. If there is one thing I definitely want to avoid is to be forced to sit one a share that is boring for years on end......and worse still, one that continues to decline for years before its turnaround. I am grateful for your precise observations, if you are skilled at reading reports then you are a valuable chap to know......but don't take reports too seriously......and ALWAYS consider what the wider market is doing. Dirt cheap shares can go even cheaper still!!!
ahha,
Yes I do as you seem like a nice chap I can tell you its 3.54% on £238.9m due 2035 and 4.69% on the £356.4m due 2049. So interest rate increases wont affect this debt.
You are right there are some bargains around at the moment so keeping your powder dry is looking like the best strategy. I hope you do get your buy in I think we can all make money here.
I would highly recommend you have a look at the annual report if you get an spare hour.
In the light of my recent comments I will keep my powder dry until I see what happens to February prices. £6.50 seems tempting....but these are very treacherous markets and I am extremely wary. I am obviously watching this share......and I repeat that long term it could be the kind of defensive share I am looking for. But there is increasing value everywhere at the moment......and I think that this will continue until shares are at crazy prices.
No I don't Auson…...do you? What I DO know is that if profits continue to fall and the value of assets fall then they will be forced to reduce dividends AND ask share holders for a bale out. I am in my 60's now and I have seen this scenario many times before.
I repeat, unless I see the Directors buying significantly I will continue to be negative on this share for some time. I am convinced that though the froth has been blown away.....we far from bargain basement price at the moment.
ahha,
How will rising interest rates effect the fixed term loan notes ?
Do you even know what the interest rates are on them ?
For sure property will take a big fall in the next year or so. Consider what effect that will have on the assets of this company AND the effect of rising interest rates on their huge borrowings. I also think I would take the value of the "intangible assets" with a pinch of salt ...….obviously the Director's HAVE done!!!
While we share holders shiver in the cold this Christmas wondering if we can afford to buy a few chicken wings and a parson's nose for Christmas dinner...….they will be laughing themselves stupid in a very warm climate in the lap of luxury. Later in 2019 I can see them hoovering these shares up at next to nothing and the whole boom and bust cycle will start all over again.
ahha,
The loan notes don't expire until 2035.
So £6.50 or £4.50 what price will you become a buyer here ?
I refer my readers to my prediction of a share price pf £6.50 made on the 30th November 2018. It looks as if we are going to get there well before February 2019. Because of the rapidity of the decline and the fact that the Directors are still not buying...….I fear that when the shit hits the fan and world markets take a hit.....it is not at all unreasonable to think of these shares going to £4.50
If we have interest rate hikes any share with high borrowings will be vulnerable to vast falls. I still think that these shares should be good long term.....but my gut feeling is that they have further to fall.When the stock market turns down......shares fall a lot further than fair value.......they go into bargain territory. I am sure the Directors are well aware of this.
Nohearts,
Why are you so interested posting on a company your not even invested in ?
What I posted on 14 August is irrelevent I bought in here in Jan and Feb 18 below the yearly high but above the low.
As I said I think
£13 is fair value here.
Oh dear,
Since you posted on 14th August 2018
" I'm expecting to see £19 here again given enough time and £13 short term."
The price hasn't got anywhere near £13 - somewhat desperate to claim it hit that price 3 months prior to your prediction
Nohearts,
As I said this isn't about 'me' is it.
The share price hasn't yet hit £6.50 but it has hit £13 for 3 days. Anyway whats your point ?
Phoenix ( who you respect ) buying more I see.
I'll give you a hint
For every buyer there is a seller.
With all these people keen to buy, surely the price will have gone up ?
Phoenix, I respect. John Jakes & Prudential not so much.
You seem to place great sheep like faith in other peoples investing. Perhaps you should follow Mike Ashley into Debenhams.
Still, share price nicely closer to 6.50 than your forecast £13
Reader61,
Nice try but thats is a different Phoenix.
Besides they are not the only buyer
Prudential 5%
John Stewart Jakes 6.03%
A Lithuanian Billionaire took around 5%
and Montanaro asset management too 6.93% now reduced to 5.38%
Aren't Phoenix resurrection specialists? Is there a mechanism by which, if the company goes bust/underperforms they get the first chance to buy all the assets or remove and replace the directors for their own choices? A successful operation like that wouldn't invest so heavily without a plan B which may be the real intention.
So I'm not sure if to take comfort from their buying or not?
Specs1,
Yeah yeah the CMA well over £100 Million has been put into this by institutions, A Billionaire Business man and a multi-millionaire business man. Since the CMA announcement they have not sold and two of them have bought more.. Lots more. Its all their for everyone to see.
But I'm sure you and Nohearts have got a much better handle on things.
Auson - the CMA has found that:
'The extreme vulnerability of customers has been a major factor in enabling suppliers to charge high prices in the sector for the past 15 years, rather than underlying cost pressures, and it appears to us that Dignity’s pricing policies have acted as the engine of these price rises, with others in the market appearing to follow its lead. This is true in relation to funeral director services, and, to a lesser extent, funeral services.
In addition to large annual price increases, the supply of funeral services is characterised by large price differentials between suppliers, including within local areas. Such wide price differences appear hard to explain on the basis of cost, range, quality and brand differences between suppliers.
The yearly high price rises implemented by the major suppliers have directly boosted their profit margins for a persistent period of time, The EBITDA margins of Dignity have been well above international benchmarks, while those of Co-op and Funeral Partners are at the higher end of them.
When considering these profit margins alongside long-term policies of large price rises unrelated to underlying cost pressures, it seems clear to us that this is a market that is not functioning well, to the detriment of vulnerable consumers'.
Dignity's time is well and truly up.
Nohearts,
Ok if you say so thats funny as I bought in here in Jan and Feb 18
But I don't think this is really about 'me' is it ?
you posted on 14th August 2018
" I'm expecting to see £19 here again given enough time and £13 short term."
Nohearts,
Yes I did once claim they would hit £13 short term and a few short months later on the 21st May they touched £13.09 then £13.25 the day after.
Auson,
You have been ramping these for a year, including once claiming that they would "hit £13 in the short term".
You have scoffed at the shorters when they were shorting at £10
How much more pain can you take ?
A rancid company - sunlight is the best disinfectant