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it is up 30% since the lows , i am quite happy with that for now.
The share price has staged a decent recovery over the past month, and has maintained its level despite faltering recently. A major question for investors is whether the share price will "buck the trend" of recent announcements, by holding its level next Thursday, when the full year results are announced. I am hoping that the BOD will have a strategy in place which will convince the market that revenues are going to increase to previous levels.
I do not foresee a long-term problem, but the share price has been successively ground down to the current level and below on virtually the same information, and the same may happen next week. As a conviction investor in SPI, I intend to hold for as long as it takes to achieve my investment target, and possibly beyond depending on future government health care strategies, and how they intend to use private healthcare facilities to bolster the depleted NHS.
I am still bemused by the recent Credit Suisse valuation, as I see little justification in their comments which I view as mere conjecture on their part.
Spire Healthcare Group plc, the major UK independent hospital group, will announce its Full Year Results on Thursday 28 February 2019.
Why wait until the sp rises.?
I can't see any kind of bid materialising until there is some certainty over Brexit. No potential buyer is going to commit before the lay of the land is clearer.
A contributor to this B/B said recently that company directors are legally not allowed to purchase shares if their company are actively engaged in talks regarding a merger or a takeover bid with another company - presumably due to their insider knowledge giving them an unfair advantage. However, I am reading nothing into this, although like some other SPI investors I am hoping for another takeover bid sometime in the (presumably post-Brexit) future. A contributor to the advfn board mentioned that the 2018 results are due to be reported on Feb 28. We should have a clearer picture of the company’s financial health once this information is announced.
Did I read correctly that CS reduced the value of the Spire hospital properties by £500million?
Reduced NHS work in 2019 and reduced growth in Private Pay coupled with all the upward pressures on payroll costs. I hope the Board have a new bank deal under discussion where they can keep paying a dividend?
Lack of Director share buying at low sp worries me as well.
Thanks for that information GreenWolf. There is some information available regarding the recent changes in short-term positions, but it doesn’t tell us very much as to how this might be impacting on the share price. Agreed that it looks like more “tin hat time” for the moment, but this investment will come good again in due time. Regards.
https://shorttracker.co.uk/company/GB00BNLPYF73/
TLW - yes, read that downgrade yesterday. I haven't checked the FCA shorts spreadsheet this week but it wouldn't surprise me if we have slightly higher shorts on Spire. The technicals were pointing to slightly overbought and with other things in the mix, like yesterday's broker note and any chancge in shorts, we might be in for a choppy couple of weeks. GLA
To complete the picture, I have just discovered that Credit Suisse downgraded Spire Healthcare from Neutral / 170p to Underperform / 85p, which explains yesterday’s market reaction. Investors could well continue to experience the current rough ride with the share price until there is a more positive update from the company.
.... for today’s share price decline?
Re SPI: Credit Suisse said it had cut its forecast of private pay revenue growth from 4% to 3% per annum, while also "continuing to expect NHS revenues to fall by 2.5% in 2019 before stabilising in 2020".
It added: "We expect UK hospital market conditions to worsen in 2019, and temper Spire's nascent progress in private pay growth. Further, soft NHS revenues should impair fixed cost absorption.
"The structurally lower profitability prompts us to cut the market value of Spire's property from 1bn to 500m."
Credit Suisse has not ruled out a takeover "at a substantial premium, the probability of which we consider tightly connected to Spire's ability to improve its operating returns". It also said that "raised political sensitivities about waiting lists could prompt a more rapid recovery in NHS revenues than forecast".
But the bank also warned that it expected "staff resourcing and costs to become more burdensome post-Brexit".
A buying opportunity if ever I saw one ! Imho dyor
TLW- I think the answer lies with the hedge funds that are short, manipulating the price. A takeover can happen at any time but don't expect the potential bidder to go about the city shouting their intentions...
It appears that I spoke too soon. I haven’t found any explanation for today’s sudden abrupt 5%+ drop in share price. Does one need an explanation nowadays? There are “movers and shakers” that appear to constantly manoeuvre share prices up and down - presumably to further their own ends. It does not surprise me that there is so much disenchantmet with investing in shares nowadays!
The share price does seem to have steadied at around the current level. Does anyone have the date of the so-called 2018 Full Year Results Invitation? I believe that the corresponding date last year was March 3. I agree with GreenWolf that a positive update would be most welcome. Hopefully there will be an improved update on the two previous statements of September 2018, and last month. I can find no new information whatsoever about a potential takeover bid for SPI, but think that this might still happen at the current low valuation for the company.
mystic - yes, although the technicals suggest we may be slightly overbought. Fundamentals of the company remain solid IMHO and looking forward to a decent update at the end of yhe month. GLA
Great recovery play. Still a long way to go imho
Why did mdc hit the rocks this morning ???
You are so wrong, If you only had some idea as to my holding in this company you would thing about what you post.
very clear to me it is 20% up since the news , nice.
GreenWolf
The issue with SPI at present is that they are not getting the performance from their assets that the market would like (for various reasons) and the market and analysts have concern with regards the strategy that you mention...such that they dont think the targts will be met
Any assets value to a certain extent depend on the return that they can provide.... the value of a department store declines if sales drop and the store become less profitable.
The BOD needs to do more here to improve the performance as overall it has declined year on year 2016-2017-2018 ....and ...the forthcoming update in late Feb regarding targets and strategy will be what the market will look at in detail
The SP is undervaluing the company but that is ..IMO because the retruns on investment are falling ...the BOD needs to address that ...they cannot just look at outside issues and hope they will go away.
Of course ..if the current BOD dont provide a clear and d etailed and convincing strategy then that fuels the opportunity for a takeover ..where by someone else will see a way to grow returns and put that in an offer to shareholders
IMO...This could still climb and fall back until the end of February update on strategy arrives ...the market is putting pressure on the BOD
"Your agenda is clear to see."
Indeed. Although I do admire his optimism in thinking that a few atrociously-written messages on a bulletin board will talk down the share price of a company this size. You have to laugh.
denby - far to high in relation to what? Our EBITDA was adversely affected by increased strategic investment so is slightly lower than would normally be expected but still within our requisite banking covenant. A strategy of cost savings (capital and overheads) was put into place in 2018 to realign our margins. We have c£460m in debt against assets of £1.7billion, of which c£1.2billion are tangible and we have overall net liabilities of c£700m (including the debt). So, how exactly are you quantifying our debt as "too high"?? GLA
pray tell me what about the debt it is far to high
Ah, denby69. You've been trading SPI for some time on the peaks and troughs so you are obviously out at the moment and looking for your buy back in price. The fundamentals of the company are pretty solid, but it has been institutionally shorted for over a year now. Perhaps this is finally the time it will break out and rise back up. Your agenda is clear to see. GLA genuine holders.