Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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DIrective; Whilst I agree the publicity is not something you want on the media of challenging the government and sacking 12,000 people as it doesn't post you in a good stead. However, if we have learned anything over the last few years then it is peer pressure from large groups and influential groups that have the ability to make change.
IAG, EasyJet & RyanAir are three of the biggest airlines in the UK. To have the three of them come after the government at one time whilst getting their own headlines in the media for doing so changes peoples minds. The public for one are becoming increasingly frustrated with decisions the government are making, therefore, to be denied a 'safe' holiday (as airlines and airports are putting procedures in place to protect customers) by a government that's already falling out of favour with the public has the power to change their stance.
As I said previously, this is only a box taking exercise to say they've done all they can to prevent the spread. If it peaks further down the line then we already know the public have been setup to take that blame. I also do think its the UK government posturing towards the EU over Brexit - preventing business and day to day running of economies from EU countries from taking place and showing them 'they're in control'.
Give it two weeks, if that, and this rule will be gone, as stated by these 3 airlines they want to resume a good % of flights in July, therefore just in time for this restriction to be lifted.
Just my opinion though..
Re: Lookers
I agree to much risk now and can only see the SP drifting downwards as it heads towards its procedural delisting at the end of June. IF it relists in August or whenever the accounts are finally published I will buy back in as the property value alone appears to cover the shares 3 times over? But will wait and see what happens for now. In these turbulent times it doesn’t take much to scare investors.
Legal action by IAG was a proper fool and even with a win, there is not long term prospect to that. But I don't think collapse is possibility though. I don't think this will move up till flights are lifting off the ground. Not being negative, I hold shares with IAG too and I got in at 320 so I of all people want the price to go up. It will happen but not so soon.
Hi any clue why IAG is going down rapidly
Just catching up on the chat. I have looked at 'Lookers' previously and can see the value in the SP. However, went against buying in months ago due to issues internally. They are even talking of collapse!
Only last week were they in crunch talks with the banks and are now suspending their shares due to the fraudulent investigation within the company thus in turn not producing their results.
It's a 50/50 risk imo, you get in now, there's money to be made if they weather the storm. However, with all that's been going on and more importantly the public perception of a possible 'fraudulent' company, I'd be reluctant to buy as that alone is enough to drive business down regardless of a restructure and cost cutting exercise!
@Smart, thanks!
Do not buy Lookers. See RN
Really enjoyed reading this thread, thanks guys. Refreshing to read sensible tips and views on shares across the board.
@sibloggs - I agree all other crashes have had a second dip but could this one be different because of the speed, size and scale of the initial drop? Then the speed of the recovery too. Not disagreeing with you at all, just asking the question of would the general market not just plateau at a higher level than the first drop but not as high as pre Covid levels? Seems different this time. I have to say I’ve been wondering what will happen when the amount of job losses and national/international debt is realised.
@notaflipper
Fair point about other shares, although neither of us started the conversation. The numbers you compared are legit, they reflect the risk. Higher risk with M&S, higher reward, as it should be.
The market is relatively efficient in major shares like these. Even with shares like IAG, there are significant differences of view as to what the risk actually is, but the market price roughly reflects a weighted average view of that risk. Effectively, when we buy, we're saying that we think the average market view of risk/reward is mistaken. So far, with my IAG buy, that's looking pretty prescient for me, I must be a genius. Wish all my other buys looked as good.
Notaflipper
Are you talking about Spreadex?
FYI - my account is new but I’ve been investing/ trading for many years. I stopped trading/ changing investments a couple of years back and went for dividend earning stocks (it was taking my focus away from my day job!!)
I’ve been quite fortunate with the virus (I work in the pharmaceutical sector and business has taken the situation well and we continue to grow). This has put me in a relatively nice cash position.
I held my time in Feb/ March and kept an eye on the market with a view of grabbing some bargains (hence my IAG and EZJ position). I still see so many companies that could give great rewards while the market caps remain 40/50% lower than January. The tips shared on here have been fantastic and I’m very grateful.
I will be buying about 30k’s worth of M&S/ Dignity/ BP/ ABF on Monday. BT tempts me but I can’t get my head around the issues they’ve faced and short term bounce potential
I’ll also reloaded my Spreadex account today and will most likely have some fun with that for a month or so.
Sibloggs - I’m not convinced there will be a second wave of the virus looking at global numbers. There will be mini regional outbreaks but nothing on the same scale for now (imo).
After this year/ next year has calmed down, I’ll be back in pharma stocks
I do not believe it is right to talk of another share on another BB but you obviously have a position to defend.
Without getting into the details of the respective companies and their merits I will just simply explain the margin requirements my way of apology.
ABF closed at 2045 Friday. Year high is 2730
Margin requirements: £409 per penny movement
M&S 52 closed 111.55 Friday 52 Week High 236.50
Price pre crisis circa 170p+
Margin requirements: £22 per penny movement
With the £409 it would cost me to get into ABF to benefit £1 per penny move I could potentially get £685 if it went back to 2730
With the same £409 I could get £18 benefit per penny move with M&S if it gets back to £1,080 if it goes back to 170p+
That all said I believe the BBs are filled with too much rampers with accounts opened in the last two months who are counting on a V-recovery and do not appreciate the scale of the recession coming and the risk of a second wave and that comparison of potentially share rises to pre-crisis levels are mis-leading.
Apologies to IAG holders for discussing this in their BB.
Incidentally I'm also in a lot of the shares listed here: GGP, RDSB, ABF, and recently made a little profit on PSN. I concur ABF does have some legs left in it - although if a second wave and lockdown occurs she'll fall quick.
I'm actually considering on selling off most of my portfolio this week (excluding GPP and a few others) to take hold of the cash, and then re-buy in after the second crash.
I've been looking at the 1929 / 87 / 2001 / 08 charts this weekend and I can't help but feel it's right around the corner. I've just recovered my portfolio losses from Feb, so it may well be wise to sell now and re-buy in the coming weeks at much discounted rates.
Just a thought - I throughly enjoyed the read above, thanks for everyones input.
@notaflipper
ABF closed at 2045 Friday. Year high is 2730. I wouldn't say recovery is fully priced in, not even close.
Also, there's the US expansion of Primark coming. That's a long play, of course, but I expect it to succeed.
Finally, there's what I'll call the "Portland's wife" factor: brand loyalty, and the "buy shares of products / companies you like to use" factor. A lot of retail investors will buy it simply because they know it, and that supports the share, and a lot of people are really wanting to get back to Primark (takes all kinds to make a world, I guess, LOL).
M&S definitely has more upside but, IMO, far more risk. I guess I'm just not persuaded that M&S management has a clue as to what's gone wrong and how to fix it. They certainly do have brand loyalty but even that has weakened some.
Thank you for your input. Much appreciated
There’s talk lounges and onboard food will be allowed after hospitality is relaxed in July. Other airlines have already started proper food onboard
I get the feeling BA/IAG are feeling quietly confident about August onwards, a month ago you could book reward flights (when you book a flight using Avios) to many locations which is unheard of especially in August (unless you get in there 12 months in advance). You can’t get many now and October is near on impossible (particularly any winter sun locations)
I wouldn't bother about Associated Business Foods (owners of Primark) as the recovery has already been priced in there. Similarly Next. So when you look at the Margin requirements per penny movement and the potential return its expensive on a Spread Betting basis. I went for M&S. Unfashionable and where the recovery still hasn't happened yet. With stores opening in next 2 weeks and trading throughout with food halls.
Back to IAG I think the key thing will be to see what the business class seat demand will be when passengers have to wear masks throughout and will have more restricted food service to minimise interaction with service staff.
Taking my time - I made the mistake of telling my wife what I was researching today. As soon as she heard primark, she wants that one!
@Portland
GGP depends on the size of Haverion. I think it is huge -- they've kept moving the drilling out further. That's based on Paddy's sat spying. The drilling has gone out further than has yet been formally announced.
The NCM hookup significantly derisks it.
Re: BT, I made a decision some years ago that due to the competition situation it was either going to be a mess or so complex to understand that I didn't want to take the time. I've kept my focus elsewhere. I have no opinion.
You asked about high or medium risk, I wouldn't put pharma in that category. If I were in, I'd be holding. I don't think it's a great time to get in now.
@Smart, thanks for the tip on Lookers.
Thank you for confirming!
Portland looking through the RN the 2 statements I pull out are:
- The Group continues to enjoy the benefits of a strong property portfolio with an adjusted net book value of £325m (as at 31 December 2019) (83.3p per share).
- The Group currently holds surplus freehold properties for disposal during the remainder of 2020 and 2021, with a net book value of £30m as at 31 December 2019.
Given the current SP is just 31p it does seem incredibly cheap. The SP over the past 5 years seems to reflect the state of the car industry rather than the value of the business and now seems very over sold. I also felt like the RN was positioning the company. It has already turned down one merger offer but maybe it has its sights set on something much higher?
I won’t drench this bb with irrelevant chat.
Just one question (I will do my own research), in yesterday’s RNs it states they have a property portfolio worth over 300m, the market cap is roughly a third of that and the debt is relatively low. Do they own the property or is this mortgage property not included in the company debt?
If so, I can’t understand why the market cap is so low (as they also have a profitable business within the property owner)
Cheers Smart. I’ll take a look.
Much appreciated
Portland take a look at Lookers! IMO their stock valuation is a bargain and I believe it could double! 5 reasons why I’m so confident:
1. Last month they turned down a merger because they didn’t need it.
2. Their restructuring plan announced this week which saves £50M is far from draconian. Another sign of confidence.
3. Over the past year their directors have been buying up shares
4. They have oodles of capital in their estate
5. With the decline of public transport people need cars more than ever!
Just my honest opinion.
Taking my time. I genuinely appreciate this!!
I will look into all of them in detail.
I’ve played GGP in the past and sold after making quite a large chunk of money. Do you really think there’s much more upside with them in the next 12 months?? Won’t they need to raise more soon ish?
I’ll take a look through the others.
Do you have an opinion on BT? I’m doing some digging there to see if it has an upside (I’m trying to get my head around these competition rules and how this impacts them moving forward), same with Centrica, that’s been on a serious slide....
I’m normally a pharma guy
Portland, you could go mining. If you want high risk, EVR. Russian oligarch controlled and as is typical with such, pays very high dividends when profitable.
Can't believe I'm saying this but I don't consider GGP to be high risk anymore. Never thought I'd say that about an AIM mining share, but they've hit the mother lode and the market doesn't really seem to have figured it out. I could be wrong, DYOR, and then DYOR some more.
With current oil price volatility, you could always go BP or Shell, there's some risk there. I think both seriously underpriced, like IAG, but in the short term they obviously could drop again if we have a second wave of C-19.
I think at current prices ABF (Primark owner) is very, very low risk -- it's going up. Maybe not as much as IAG. C-19 has eliminated some of their competitors, shoppers want to get out into shops (they've been able to sit at home on their computers, a lot of people want to get in shops and see/touch stuff), and people who have been hurt financially are going to be looking for inexpensive clothes -- Primark again.
Another company that got hit by C-19 pretty badly but might have a really nice recovery is Compass Group. I do see some risk there.
I'm big on housebuilders. Doesn't matter what happens, there's still a housing shortage. I'm heavy in PSN -- loads of cash and strong land bank to see them through tough times, also enough cash if other builders go to the wall or land gets cheap to take advantage of opportunities. This may drop in the short term due to no-deal Brexit fears but I wouldn't count on that, and I think it is still underpriced today and so not high risk. Even if it does drop, that's just sentiment -- the fundamentals are strong and the build-quality / customer service issues are getting resolved.
Giving serious consideration to Homeserve right now. Not sure it's high or medium risk, though, but I think significant upside.
Really getting itchy fingers on both TPK and RHIM right now, but haven't quite pulled the trigger to buy them. TPK is similar to IAG/BP/others, price is way off highs but they are going to be making money, and it will rebound. Buying opportunity. RHIM seems more risky but also a great opportunity. It's just that there are so many opportunities....
Good luck, have fun. That's just a few suggestions. No idea if any of them will make as much money for you as IAG, but I'm not an "all eggs in one basket" person.
The motley fool change their mind like the wind.
As much as I agree that IAG and EZY could both double in value, that article is a bit late to the party and almost stating the obvious.
I’m contemplating adding £20k here through my wife’s isa but not sure if I’m comfortable putting even more in the same stock (I’m very heavy in IAG as it is). To spread risk (away from aviation) I’m not sure if I’d prefer that 20k to be in a medium to high risk stock in another industry.
I’ve spent the whole day exploring and calculating risk/ reward and I keep leaning back to IAG which I know isn’t the right thing to do. Anyone have any suggestions?
I have £15k in a trading account I was going to use to trade IAG/ easy jet (whilst keeping my investment invested at all times) which again makes me think my wife’s isa should be elsewhere