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Anyone know the reason for the drop this morning?
Wish I did! Googling has revealed nothing at all.
Morning. I see that Shore Capital has produced a research note today, with a headline of 'Upward pressure on costs'. I cannot access it, so I have no idea if the headline is misleading, but as NOMAD and broker to the company, it is difficult to believe that the article is negative overall.
I have traded this stock several times before and excessive price falls in H&T are not uncommon. With trading good and the rating cheap, I view this morning's c.9% setback as another buying opportunity. However, I won't buy a usual whole unit - perhaps 2/3rds of what I normally buy just in case something is awry!
Uh-oh - Yes, my conclusion is that there seems to be nothing tangible awry, but if someone wants to reduce their holding, the small float for H&T means the price is likely to be volatile. Agree, it's a cautious buying opportunity! ;-)
I brought more today. i think it will go back in low greens today, or a little in the red.
Article re: Shore Capital - www.proactiveinvestors.co.uk/companies/news/1035775/h-t-s-pledge-book-to-grow-more-than-expected-offsetting-wage-pressure-analysts-1035775.html
Thanks for the url, LeeC7. A 565p share price forecast looks fair to me and with an attractive dividend payout as well and society, sadly, needing to use pawnbrokers so much these days, I think today's sell-off is little more than selling into a lack of liquidity. I have bought at 426p and will enjoy the bounce back (in my dreams!).
Thanks to everyone who replied - always good to get views of other shareholders. Reading the Shore Capital note, I would say it's positive rather than negative. But in current markets even the slightest whiff of negative comment can send prices down. Anyway, I added this morning, and since reading your opinions, overall I'm glad I did.
Certainty surprised me how it has dropped so much.
Mad HATter
If you look at the graph, the shares have suffered these quick collapses on more than one occasion in recent years. Each time it has been right to buy into the weakness and it should be no different this time, with current trading good and the economy heading into problems in 2024.
I said yesterday that I was not buying a whole unit. Today, I topped up at c.400p. Very happy.
I also added today & HAT is now by far my largest holding.
Anyone who actually bothers rreading the broker note will see they say HAT "will face pressure on its operating costs when the National Living Wage goes up next April but increased funding capacity and higher-than-expected book growth will offset this." So what's the panic? One factor cancels out the other.
Unless there's something we don't yet know (which I very much doubt, as HAT's Directors have always been pretty transparent in the past), there's really nothing to see here. All white noise IMHO, which is why I added.
Don't forget, as recently as June 23, HAT's Chairman was a significant buyer at 444p. As was the CFO at 431p in Apri, and the CEO at 428p in March. They know what's going on and said in their August 2023 update:
"We are mindful of the impact upon our employees, suppliers and stakeholders of persistent inflation and rising interest rates. H&T is not immune to these factors, which have resulted in operating costs being higher than previously envisaged. However, much of this cost inflation is now factored into the cost run rate. We expect a lower level of cost inflation in the second half of the year which, alongside the growing revenue momentum of the business, puts us on track to deliver record profits in 2023."
I doubt much has changed ince August to knock those record profits off course. And once the NLW increase kicks in next April, HAT will simply adjust its retail prices and loan interest rates to offset this.
"pressure on its operating costs when the National Living Wage goes up" - we've known about that since the autumn statement, so why the panic in the last 2 days?
Hardboy - gawd knows! Logic would dictate that ALL retail & hospitality shares plummeted on the NLW announcement. But they didn’t. I doubt any weakness will last long & will continue to accumulate & collect the growing divis in the interim.