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Update positive, shares dip, top-up opportunity realised at 609..
To clarify, positive update
What's everyone's expectations tomorrow? Let's hope for bumper results...
Ftseexplorer - No, I don't think you are. I have MRO earmarked for the new upcoming ISA...
Strong results and a fabulous run by this company so I guess a little correction was to be expected.
I'm no expert in shorting but the Marshall Wace exposure can't have been good for them?!
Yesterday I considered taking a 139% gain before tax year end but this looks to have amazing cash in the next 12-18 months so expect more share buy backs and dividend increases. Am I being too greedy?!
Due to upgrade by JP Morgan.
Thanks for confusing me even more... I meant to adjust the figures at the time, but a bereavement distracted me. :-)
Ah never mind, I think I figured it out. The opening price of the Dowlais shares on 20th April was actually 146p. So Yahoo (and others) are assuming that anyone holding Melrose at the open would have received a "dividend" worth 146p (I know it's not a true dividend, but the effect is the same). They then go back and reduce the pre-split prices to reflect this amount. So, the adjusted price for 19th becomes (161*3 - 146) = ~338p.
I think I was getting confused, because I know that the "cost basis" of the Melrose shares should be split 77.9 : 22.1 based on their closing prices at EOD 20th. I was therefore assuming that the Dowlais shares would also have been issued at an initial price of 107p, which I now see is wrong.
Much clearer now, thanks all. Whew !
Ugh sorry - post got chopped. Basically, the price for 19th now shows as 338. The price for 20th shows as 413p. That implies a 22% profit, not 9%. What's going on !? I'm totally confused
Hi all. New poster here. I've recently been trying to make sense of what happened to my Melrose shares during the recent demerger event. I have a pretty of the events that occurred "in real life", but I'm having trouble mapping this onto the price charts that I see on sites like Yahoo!, Google Finance and elsewhere. Can anyone help please ?
I know that there was a 3:1 share consolidation on April 19th, followed by a demerger. The Melrose share price closed at ~162p on April 19th (I think !). By EOD 20th, it was trading at 413p. Dowlais closed at 117p. That works out to a 9% one-day profit.
So far, good. The problem is that when I look at the price history for Melrose, I see the following :
19th April : close = 338p //
Well, one could not ask for a better trading update for the four month period to end October with improving margins and an 7% uplift to the previous expectations for the YE2023. Also the first guidance for YE24 which is again ahead of expectations Viz:-
· Revenue of between £3.5 billion7 and £3.7 billion
· Aerospace adjusted operating profit between £520 million and £540 million
· Aerospace adjusted operating margin c.15%
· Aerospace adjusted EBITDA4 between £680 million and £700 million
And all this without straining the balance sheet even after the £500m share buyback programme and the ongoing spend on the GTF Engine restructuring. But the shares have had a major re-rating since the demerger in April with a rise of over 25% so the update had to be good to justify this.
No probs! Just wary of this as it feels the market has no love for it. A PM that just like Boris (now making millions) doesn't have to worry about money!
Just be careful with this, demerger was smoke and mirrors and management team are off and prob collecting millions on the way out. GKN has been a fail v their business model.
Thanks Dodger... Wasn't trying to be rude just wanted some greater insight. Uk stocks are a joke as is the country... The laughing stock of the world with a PM that pulls policies around 7 bins and meat taxes which sit at an appendix in some random document... When will the madness end
Sorry Jeff, just trying! I stopped believing in fundamentals a long time ago, its all hype and BS! Whats in fashion, whats out of fashion. The valuable management team are leaving, after an awful five years, they paid £8bn and what is the market cap of mro and dwl combined today?
Well that was helpful.... Company doing well... Doesn't mean it will tank
This is finished as we know it. A lot of value in the management team will get priced out. I expect a drop to under 400p as this becomes less and less exciting.
What's going on... God forbid we got bad results
Not so long ago DWL got 95p rating yet 128p today
RBC cuts Melrose Industries to 'sector perform' (outperform) - price target 540 (525) pence
A good reason to fill your boots based upon many a broker's "forecast".
Agreed - Having invested in predominantly the UK market over the last 35 years, I've lost virtually all faith in UK valuations etc. Companies missing guidance get hammered, companies meeting guidance get hammered and companies exceeding guidance, initially seem to have a positive reaction, but then downturns the next day with no follow through momentum.
Long gone are the days of what I would call 'value' investing. The markets these days are so engrossed on the next data figure, be it rate decisions, inflation, GDP, consumer confidence and also data numbers from overseas. I think its safe to say that the US markets will not take into account any UK numbers, yet the UK will rise and fall with whatever the US does ......
The whole rise wiped out - what a joke
Must be an institutional seller or perhaps a director selling in a permitted window post the results.The UK market appears particularly feckless at the moment.
So how can this fall so far back from yesterday initial jump, its now lower than it was before the improved guidance, market is mad. See it so often improvement in company earnings, lower market price!
Yes I agree but more important is their revision of full year earnings, margins and free cash flow. A interim dividend of 1.5p and an early start to their buy-back programme.....what's not to like. They have said that they have moved away from their previous business model of buying companies, improving them and then selling them on. They are now going to concentrate on aerospace, their aerospace, and not even look for acquisitions in that area for a while. Hence the change of top management by promoting the aerospace men. This has been a great share since the demerger earlier this
year.