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Could be, but this company is not dependant on any sale of asset .it just needs some good results to provide a sense of direction
The shorts have it easy, they'll pull this down to the 40s leading to September. If the sale finds no buyers , 30s become open. A real nightmare.
Agreed that after the profit warnings this year and FY results, macro and US rate expectations aren't going to help anymore. Friday was a example.
Last year despite the Oct profit warning, it rallied like crazy on fed rate cut expectations in Dec through January, which was solely on that even before Cosmens started adding again.
But now it's down to fundamentals / Disposal or buyout.
Barring anymore onerous rabbits to be pulled from the hat the next results should be in the green!
Some investors ( Neil Woodford) as "cheerful" about the UK economy and believe the market will experience a cyclical upturn
Others take anything Neil Woodford says as a "time to short" signal . Some investors / analysts believe the UK market is over valued and are shorting . So the likes of MCG is getting caught up with this thinking
Others ( Cosmens ??) believe MCG has faced the worst of the market downturn or possibly was one of the first to get hit by this "overvaluation" and a correction is now due . But that can only happen if MCG reports a good set of results . The macro wont pull it up
Same stuff going on on DOCS. Shorts up but SP starting to recover well!
All just mind games to squeeze out weaker holders & suck up their shares. Personally i think any weakness will be well bought up here & you'll see that short level come down!
The reporting is with a time lag. They tried to push it down but looks like someone is buying. Maybe they will try again
why does someone see this as valuable, but the shorts think it should be 40p? That is the conundrum
So with the shorts now 2.8% it does look like a few are trying to push this back down over the next week or so, back to 55p ish ?
The debt level in itself is not the problem here. If you look at the balance sheet the debt level is actually lower now than it was in 2019. This has always been a high Capex business so a reasonable level of debt is to be expected. The problem is the company has had 3 years of negative earnings so the gearing levels have increased. High gearing is deemed more risky! Also interest rates have increased considerably from many years of super low rates. Not good for a company with high debt levels as the interest costs eat into the earnings bottom line. The company is making some efforts to reduce gearing (eg NA sale).
Re. Cosmen working with shorts. Nonsense. Maybe on an AIM stock! Cosmen has tried to take this over before in 2009 & he won't be doing it alone if he wants to try again but will have P/E or someone else in a consortium i would think.
Personally i'm happy to just hold here & not relying on any possible takeover which may or may not materialise. I believe this company is worth far more anyway than the sort of low ball bid levels being touted on here . Time will tell, but for me this is a Buy; Hold; Accumulate; Wait!
Looks like shorts are gambling with this stock. I do not think Mobico's issue is that big when it comes to debt, its overemphasized given that it is in human nature to always look at the bad over the good. If debt was an issue, why would they acquire the tourism group in the Canary Islands? Why would George Cosman increase his shares from 12.4% to 20.4%? Wouldn't George know more than us about the company? If people comment about him manipulating the share price to purchase Mobico, first off, he doesn't have the amount to cover an acquisition of the whole company including the premium. Additionally, I highly doubt that he will be working with four hedge funds to bring down the share price. Point is, with volatility arising in the short run within this stock, shorts are betting on short-term gains, hence why Glg and systematica had fluctuating short positions. I am down 65% and I am not worried as this company is strong even if you factor out UK and Germany's operations. Keep your heads up and do not give up or overreact like what some stupid retail investors do.
Given their track record of fiscal management, some might consider their aims to be somewhat ambitious.
Others might simply assume that they think they can line their own pockets more effectively by bringing more services into public control. The real driver for this stated ambition.
Naturally I have no opinion myself in either direction on what their motivations may actually be.
My opinion of those who keep voting for the same political gangs, over and over again....is probably best left unsaid :)
It is not possible to run an efficient & reliable public transport network & make a profit. In the free market the only buses running would be those most popular routes at the peak times. If people want late night/early morning buses on a regular basis to the most desolate places the set up needs to be subsidised. Personally i think if MCG/NEXcannot secure a contract next January which gives them a return of at least 10% this contract should be ditched.
The candidate stated he wants Birmingham bus services to go into public control.
Of course, he is looking for votes .... "public control" always sound nice ..... wait until they find out what that means and what it costs to keep a fantasy route system that wants high wages and low bus price tickets
...
Sneedway: "Looks like Labour took it, news just broke. The candidate stated he wants Birmingham bus services to go into public control......Perhaps not a bad way to dispose of a failing asset..."
lets spin the positive - hope there is a change in the status quo which forces MCG to dump this, or run the network on cost plus profit terms like the railways
Arriva in London operates 18% of the bus network , NEX here in the Midlands operates 90% . I think they are going to break it up.. It will likely mean worse services for commuters ( higher prices or reduced services) but as they say elections have consequences
I presume RR is a case of a new management team coming in and turning the failing ship around. One of those dream scenarios we all look to catch.
The management here is IMO weak. My bet is that either they will improve, or changes will take place and the new management will fix things. Asset sales could make a real difference of course. Might work out well (the recent political stuff) in relation to our unattractive UK operations.
Or (and my preference) a takeover, which would negate the need to replace the management team, which should happen, if the next update is poor. Less risk, but also less potential reward if we do see an RR type turnaround. IMO I do not see the current management achieving that level of improvement, but hey, let's see.
Yeah, I had some nice Covid-induced hits myself. Especially AIM stocks, including a 10 bagger and several multi-baggers.
A lot of liquidity pumped into the system back then, which helped massively. Pretty much all of those AIM ones are now either bust, or as good as. Naked swimmers as the tide comes in.
At least with the likes of BP, even though governments are going to keep trying to kill the golden geese, you know in all probability they are probably ones that you can stick in the bottom draw if you want.
I have kind of done that myself, with CVX, even though the oil chart looks so much like it is going to soil the bed soon. I have decided not to risk selling and trying to time the market with that one. Will accept the likely paper hit and buy more around year lows, if it goes back there, should the technicals play out.
JG: All the more reason IMO to have a core holding in ones you have a long term horizon for, and side trade it. I bet you most RR holders are not ones who bought at or near the bottom, and still holding a full allocation at the time of print.
But anyway, like I said, you just have to find a path that works for you. And try to reflect on successes and failures as objectively as you can (easier said than done sometimes).
Even the best make mistakes.
Warren Buffet recently confirmed he sold out fully from PARA. I anticipated this news as soon as I heard he had reduced his position in their last filing, some months ago.
They might end up missing out on a takeover bump. He has certainly made a few other calls that proved wrong fairly quickly. Something for us humble PI's to remember as we pit ourselves against the City and Wall Street :) Good evening all.
I respect people make money trading TA, but most don’t. I’m aware how it works and how to read the graphs, I have developed a “tool for the job” which is back test / auto trade system implementing these strategies for skim and swing trading, automated to take emotion out of it. Most traders have a few hits and believe they are on to something, in reality they are not, they are filling the blanks, they keep going, up their stakes and find themselves in the red as what worked in a given timeframe, no longer does. When I say it’s a lagging indicator, i stand by this. You need the historical data to know what to do next. It’s not just price action, resistance and support, it’s where you were fundamentally, the economic picture, the news flows and market sentiment at the time that gives weight to these price movements. With Mobico, we haven’t been in this situation before and there is certainly no datum to go off. Each to their own GLA!
LW, i use RR as my example mainly because everyone is familiar with that story & it's been quite a sharp turnaround, but there are many other examples.Personally i had quite sizeable holdings in BP & Melrose both bought up near Covid low prices. I sold both those for significant profits but then watched helplessly as i realised i could have made 3 times as much. I take your point though. I think it depends on the nature of the business. Personally i think MCG is one of those types of business which with the right management could easily return to pre covid levels in time. Each to their own. I never knock someone taking out their profits but for me on a share like this i believe once this worm turns properly the current prices will be for the history books!
LWHL
Yes agreed with that suggestion, Hindy suggested that last week and I'm trying a few demos.
And Paddyboy I'm sure many investors are greedy so and sos given the nature of the business.
RR is the main reason for deciding not to derisk at 90 ( almost BE). I like many others probably sold out too low just happy to finally be slightly in profit again after a fair chunk of time.
There was a guy on there Nettles the cat who was continually telling everyone that it will be 300 plus by mid 23 late 24, a lot of people were laughing at him.
LW I guess although it's hard cash invested, if you are able to extend your time frames even multiple times, with this they had a very successful business model, with costs under control, margins increasing, high debt with lower rates, and the SP just keep increasing over several years as a result.
So unless they go bust or have to do a significant dilution, there's every chance of getting there again, although EPS may not be as it was if higher rates are the norm. Not sure about being booted out the 250 if that happens, what affect that will have though short term.
Looks like Labour took it, news just broke. The candidate stated he wants Birmingham bus services to go into public control.
Franchising might be a better option and maybe MCG would get a windfall from the government buying back depots etc. Perhaps not a bad way to dispose of a failing asset.
As private investors, although our voice is not powerful, we have to say if the ceo is incompetence, arrogant and harmful. I just voted against GARAT re-elect as BOD ditector in AGM
Paddyboy1: For every example of a RR, there are many, many others, where profits would have vanished with a buy and hold approach over the same period.
But I am sure there are some RR holders who are sitting on a nice core holding/free carry right now, who also de-risked along the way. Probably a good many who are finally in profit or B/E as long suffering HODL'ers from 2013.
But yeah, easy to say. Less easy to do, or we would all be sitting at the top table of Davos :)
Absolutely, Pokerchips. I know that I myself sometimes come across as quite bearish on these chat boards, but when I am long, I am always trying to find potential threats or weaknesses to the bull case.
Madness not to when you have cold hard cash on the line, IMO.
Notwithstanding occasional white knight efforts on others that I have turned extremely bearish on, for one reason or another. Especially some of the micro caps from time to time.
Anyway, JG - it is worth doing some research into technical trading. Start with the very basics. Heaps of material on youtube and elsewhere.
Cannot remember which source I first started with, but I finally opened my mind to it (after initially thinking it was all BS) after seeing another poster repeatedly calling accurate SP targets over and over again on one particular stock.
Be warned though: there is an unreal amount of technical indicators and theories out there. My advice would be to keep it very simple and build your knowledge at a pace that works for you.
Then, do some fantasy trading using technical indicators alone. Any stock you want. See how you go. That is what I did to begin with (well, I used real money from the start, but stuck with stocks that I was already familiar with).
Not entirely sure it works as effectively with micro caps as large caps, although that could just be me not being very good at it yet :)
Oh, and it is never 100% certain either, it is a game of probabilities. So never go all in based on TA.
Based on what you have shared with us over some time here, if I was in your position, I would take your recent purchase off the table if/when mid 60's hit. Nice profit on that tranche, reduced risk and you might get the chance to repeat the trick down the line too. If the SP does not retrace, then you might have sacrificed some profit for less downside risk. The way it is.
But only an idea, as you know, your money your choice etc.
Same will happen here i suspect. The majority will bail at B/E or small profit. that's the time to hold & reap the rewards after all the pain!
People would have doubled their money selling Rolls Royce at 150. Are they happy now with hindsight?