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Hi essexinvestor - correct - around £750k in purchases in 2017 and £10m in sales in 2017, so at least it shows some confidence.
Hi Benjie, While you do raise some valid points, I'd like to bring to your attention that on the 15th, 19th and 26th March 2018 directors purchased shares in DTY. Although the purchases aren't showing in the director deals section on LSE, you can see details of these purchases in the RNS section.
I think the fact that the directors sold significant holdings last year is s big warning sign. It is true that we’re not going to run out of dead people any time soon It’s also true that babies will continue to be born but that didn’t do Mothercsre much good There are approximately £300m of funeral plan holders money being held for future funerals and on the basis that around 1/4 of funeral plan holders money is booked as revenue in advance of providing the funeral that’s around £100m of income in advance (ie 1/4 of £400m leaves £300m). So OK as Sammy T points out this is for salesmen’s commission, sales expenses and managing the money over the plans life, but most other companies don’t book revenue in advance of delivering a service say 20 years in advance and managing the money over the plans life is a future cost for which revenue is booked now So I would avoid investing in funeral companies until theses companies are properly regulated. At the moment the industry is self regulated with vested interests and that’s just how they like it.
Thanks Benjie, That is something I didnt see and makes interesting reading....When youve worked in the funeral sector they seem to dress it up like there the best thing since sliced bread and the best thing to have... All this current bull crap about this companies issues are issues that have been there for years...
Sammy T - good defence! If you can be bothered to look at an online article from The Guardian dated 9/2/17 about prepaid funeral plans (easy to google) you can see what the article thinks of them Quote ‘one consumer body said these plans could be operating a ‘quasi - Ponzi scheme where they alledgedly use money from new customers to pay current claimants’! ‘A growing National scandal’ There are other articles, this is one example Had a quick look through the National Funeral Trust 2016 annual report (the last one published) and note the following: 1) there was an actuarial deficit which unlike pension scheme deficits under FRS17, does not need to be reflected in Dignitiy’s accounts) amazingly the trust does not say how much this deficit is just that there is one . I would find that disappointing if I had a plan with Dignity and relied on the report to assess to worthy ness of the scheme 2) the actuarial valuation does not need to be audited!! Therefore the assumptions are open to interpretation. New actuaries were appointed in 2017. No reason given why new actuaries were needed. What was wrong with the previous actuaries? 3) the auditors are EY but there is no audit report in the accounts, again I would be disappointed with this if I was a plan holder . I also can’t imagine that the auditors are required to give an opinion as to whether there are sufficient funds to pay for all funerals given that the actuarial report is not audited. But I might be wrong. 3) it’s interesting that the trust suggests that the funds valuation (giving rise to the deficit) does not take account of any benefit from the actuarial surplus generated by new plan sales!!!! Or from future investment returns!! Those are future events and the trust therefore seems to suggest that sales of future plans could help them back into surplus. 4) the scheme has changed investment managers in 2017 to Mercer’s to embark on a new investment strategy presumably because investment returns aren’t good enough, with inflation on funerals running at 7% 5) in my views it would be far more prudent to put all the customers money into the trust and then to deduct sales expenses etc when the service is provided at the time of the funeral. That’s what a prudent company would do. But not great for the bottom line. Prudence should always take priority over the matching concept when it comes to accounting. All my research was done before my post was made. In fact, when I retired as FD from a large multinational company (after many years as senior audit manager at a big 4 accounting firm), I did some voluntary work for a charity and was asked if I would help sell these policies. I did the research then and declined the offer. I couldn’t see why people wouldn’t just put money into an ISA and pay for a funeral out of that! Anyway enough said. Of course it’s only one view and I have respect for your vi
I think some of you need to do your research firstly before using claims of pyramid schemes and how a company books profit plus that statement funeral plans are the next big missing scandal Let me point out if your had been bothered to look at pre paid funeral plans under the terms and conditons you'll find the folowingMoney is paid into National Funeral Trust, Ernst and Young are the appointed auditors and conduct annual audits of the Trust�s accounts the company is paid an allowance for the marketing, administration and lifetime customer management of a plan..In the unlikely event that we were to go out of business it may however mean that we would be unable to provide the funeral we had promised to provide. If this happened the Managing Trustees of the Trust would work with the remaining Nominated Funeral Directors, and where necessary seek to appoint new Nominated Funeral Directors, to continue to provide services to Planholders
I would argue semi Ponzi than pyramid. But the point is, they book a profit when they sell the plan and then hope that the money left is enough to cover the funeral in say 10 or 29 years time. If they don’t have enough money set aside then i guess the shortfall will have to come out of future profits. A good way to boost short term profits but an issue for the future sustainable profits in my opinion. I would Never buy a guaranteed funeral plan - the guarantee is only as strong as the company that gives it. And it is not a financial product so not covered by any financial compensation scheme. Directors did well selling last year in my view Funeral plans are the next big missing scandal.
CANNOT UNDERSTAND THE DEALERS PRICING OF STOCK SOMETIMES. TODAY SOMEONE BOUGHT 84 SHARES AT 699P THIS WAS FOLLOWED 6 MINUTES LATER WITH THE NEXT DEAL WHEN SOMEONE BOUGHT 93604 AT A LOWER PRICE OF 695
PYRAMID selling i think you mean it is like, correct me if i have misunderstood you
Holdings increase Montanaro Asset Management 4.54 to 5.01% I feel there could be a bid coming here soon... but I hope not as I don't want it getting taken out too cheaply.
Perhaps another reason is the way they sell their prepaid funeral plans which will no doubt one day come under the scrutiny of the FCA, as they are amazingly currently not deemed to be a financial product. Not only do they take a large chunk of commission when they sell the plan but they then guarantee to do the funeral at an unspecified time in the future (maybe even 20 years hence) at today’s prices. Would love to see how they invest customers money in the meantime to keep up with funeral inflation running at 7%. But I guess as long as they keep selling more and more plans who cares. I think there’s a name for that kind of scheme.
You noted that the recent directors share purchase was small at around �10 compared to their sales at �25 before they told the shareholders that their were problems (However did they get so lucky, as there was no bad news about at the time!!) At least the �15 profit per share will help augment their meagre salaries. Bit of hard cheese for those who lost 60% of their investment. There is one point though never buy shares that are around their top price with a big P/E, so many collapse to a more realistic P/E. Perhaps that is why the directors sold and it had nothing to do with the bad news that was coming out later in the year.
We bought sold at a loss and re-bought leaving us just shy of our total investment. We purchase shares to give us an increase on our investment, however all we seem to be doing lately is trying to recover our original stake by buying more shares. OK so we are lousy judges of the stock. The last two years have given us an annual return of 18% pa including the (covered) options we have sold. We have had a few good returns from a few shares but equally we are set chasing to get our money back on the others. (the drop caused usually because the directors made a testicle of their job). I was waiting for this to hit 1000p to have a small profit but every time it gets near it ,as today, it goes in to reverse gear. Why has it dropped back after an interesting start to the day? Is it day traders taking their profit. Short and day traders are a bind, causing the share not to be set at its correct value. Expect in waiting for those few extra coppers we will finish up losing in the end. Once sold the money will go in to the top performing investment trusts which annually show massive returns from the best of them and their price to double in 5 yrs is not unusuall with the active trusts, some get even better returns. the best average just under 100% increase over 5 yrs. Avoid the non active trusts, although they do usually go up it is a boring rise, There are like shares a few real dogs that go down again just avoid them, unless it is a sector waiting to recover then a small investment may prove well worth it. Again with the I.Ts. we only have to check each month who is the best performer over 3 and 5 years and add that months investment money in them.
On 17 October 2014, the Group issued �238,904,000 Class A Secured 3.5456% Notes due 2034 and �356,402,000 Class B Secured 4.6956% Notes due 2049. Total �594 million - annual interest expense of �25.17 million. More than manageable and fixed for 16 & 31 years. Thats a major plus.
A more simple and plausible explanation- they bought shares because they think its undervalued at these levels
So some of the directors have put there hand in and bought some shares..whopiee doooooooo, has this been done to instil some confidence with would be investors or has it been done purely to try and jack up the prices... only time will tell but for me, I'd still air on the side of caution ... added more funeral home year on year, yet the funeral figures arnt increasing.....Thats not growing a business and more reason to be cautious is still the fact of reported 565.7m debt,
I am on the same page on this one avan, and as stated previously, I intend to remain invested until the share price is in excess of 1200p before reviewing my position. My investment @2000 shares is a relatively modest one compared to some previous investments, but having been blighted by the decline and fall of BT.A, and selling at a loss months ago, after running out of patience with the lack of leadership in that particular company, I am trading more carefully nowadays. It is difficult not to lose money in an investment nowadays with the current market volatility and the points of entry and exit for a particular investment are crucial factors to consider.
You are right to take a cautious approach in today s volatile markets ahha. Too many times, I have waded in following a significant fall in share price only to see the price fall further. One can then sell at a loss and look elsewhere, or remain trapped until the share price recovers. This is my current position with too many shares including GSK in which I am heavily invested. This is OK provided the dividend payments are in the region of 5%+ in which case one can purchase further shares at a lower level pending a recovery. Further, as stated, the market correction curveball is a factor that investors cannot ignore and one which may enter the bull(market)ring later this year according to some analyst s predictions.
I agree TLW, the size is small relative to the previous sale. Yet there is only 1 reason directors would buy shares for their PA- they feel the stock is undervalued here. And at 10x 2018 PE based on my estimates, holding is good value
It is good to see all this positive comment. I have been watching DTY for a long time, waiting for the price to fall from what seemed to me to be grossly over inflated levels. I had not expected the drop when it came to be so severe. Having said that, I still have not bought......partly because I always think it wise for the dust to settle. As far as the Directors are concerned, many times I have rushed in after a director or two have bought shares fairly soon after a share tumble.......and what happened? They fell even more shortly afterwards. The market sets traps! I am going to wait a while. My other concern is when the next wall street correction takes place. It could be before the end of this year.....what will happen to share prices then? I'm sorry to be so cautious, but this is the reality of the stock market! Long term, this is obviously a defensive stock and is a safe investment...so long as people do not stop dying!!! I will be more confident when I see a number of Directors piling in heavy.....and it will probably be at much lower levels!
I note that yesterday s directors share purchases are now featured on the HL website (see link below). Although this is encouraging, the volume purchased is small compared with the director share sales last year when the share price was around 2500p.
This is good (and very recent) news indeed avan. It is so recent that the only director deals currently displayed by HL are the massive sells last year. No deals are yet on HL s record for the last three months. http://www.hl.co.uk/shares/shares-search-results/d/dignity-plc-ordinary-shares-12-48143p/director-deals It was somewhat disconcerting when the CEO ( Mr. M.K. McCollum) chose to sell all his shares in the company?Nevertheless when your news emerges, it will no doubt encourage private investors and others to come on board. Incidentally the current share price corresponds exactly to that calculated by dividing the declared intrinsic value of the company by the number of shares in circulation.
Well further good news to take heart from TLW, we had significant director (and spouse) buys on Wednesday (as soon as they could). Thats the one extra vote of confidence I was looking for. We should see it rally back on that tomorrow but regardless they think its cheap here and are putting their money to work and they know the prospects better than most
Well further good news to take heart from TLW, we had significant director (and spouse) buys on Wednesday (as soon as they could). Thats the one extra vote of confidence I was looking for. We should see it rally back on that tomorrow but regardless they think its cheap here and are putting their money to work and they know the prospects better than most
Thanks avan. I agree with you. It is however very frustrating in sticking to a strategy and seeing a profit rapidly transforming to a loss in today s volatile markets. My target price for DTY is 1200 and if this is realised in a year, it will yield a significant profit (plus dividend payments). 📈