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The article might have been negative but I'm buzzing. The cheap shares a purchased Friday/ Monday turned into a very nice profit today. As jolly said this range trading is working great at the moment. ( until it doesn't) :-))
Very negative article in the I today re the car industry
That post by mildmouth ( hope he doesn't mind me sharing ) speaks volumes about the difference in these two businesses.
As mentioned in posts earlier this year, Motor retail companies have been buying up dealerships, paying way over the odds and reporting increased profits on the back of it. The way they have been achieving that is by carrying the overpayment in the balance sheet as "goodwill" and these days (wrongly in my opinion) accounting rules allow them to apply largely subjective tests not to write down the goodwill. However, when as in the case of Pendragon they start having to look at abandoning certain manufacturers' franchises then the potential for having to write off huge sums of this "goodwill" is enormous. Vertu is a much more defensive business having net tangible assets per share of 38p after deducting �95 million goodwill, whereas Pendragon has about �350 million of goodwill which represents almost the entire net worth in the balance sheet, so net tangible assets per share of about "zilch"! Nevertheless, I suspect it is almost certain that Vertu will be compelled, like Pendragon, to write off some considerable sums of that goodwill. We have all been there before and, in one major market dip, could buy motor dealer shares for under net tangible asset value and in some cases well under.
I fear the dragon have done what they did in 2006/07 pre- reg lots of cars taken the VB to profit and not stood them at the right money and are now paying the price. There are many areas of the business they ignore to correct, to hit their forecasts. On electric cars they reckon only 21.7% will be fully electric by 2030. So some way off yet. Hope to be out of this by then :-)) gla
is sooooo balanced & positive about Brexit ....that noted, there must be decent chance of new lows across the sector as (i) the uncertainty/wrangling with EU carries on carrying on thru 2017/8 (perhaps even to the last second in March 19) (ii) the specific challenges to this sector short term play out (iii) more see the cliff edge of transition to electric cars with its resultant cratering of After Sales (by far the most lucrative business segment ofc)
In the wake of the Dragons profit warning and the subsequent fear that as in the Guardians point of view " that traders believe Pendragons woes are part of a wider malaise in the U.K. economy", Vertu seems to be holding steady at the moment. Fingers crossed the hold continues. GLA
Put out a profit warning that would re-rate the sector. But yes if your invested in the motor trade vtu a safer bet. Its trying not to panic looking at paper losses and think about where its going to be in march next year. Gla dyor
pdg profits warning & sector weakness
Aldaniti looks like i picked the wrong week to give up smoking, and alcohol. Yes could be a lean winter. Looking at lookers share price the market expects the same from them.
Sorry folks most should read months of course.
From what I hear there's plenty of activity regarding cost reduction in the ranks at VTU and other motor retailers. Not unusual at this time of year in the industry to be fair but there appears to be a chilling wind blowing that is galvanising them all in preparation for a long cold winter as manufacturers feel the pinch of the dropping pound which in turn continues to impact the UK car market. We may see different strategies rolled out by different retailers such as VTU or the dragon to counteract/mitigate the impact of this underlying profit "pinch". As expected the bigger you are (as with the dragon ) the bigger the "pinch" it appears. Let's hope the "pinch is not felt to much by investors who trust that the officers of the companies involved get their respective strategies right in the coming most as the winter rolls on.GLA
From the dragon, it had to happen i guess. :-(
This may drop further before recovery. 41p ish Lookers 1.00p pdg 26p. Just for balance. Gla
To tell the truth, I dumped this as part of my final clearout in individual stocks, as it was one of my "dog" shares, after buying in at 66p (duh!). I've now moved to funds, where I'm much more content with the lower volatility. But I still track it and it does seem cheap. As much as it's ranging, I suspect we'll be moving back to value fairly soon. Which makes this one of the best out there, imo, as it will be able to stave off the weaker oppo for a long while, while still consolidating. I'd say you have a very decent investment for the mid/longer term, no worries :-)
I agree been topping up yesterday afternoon and this morning. However new car sales worry me somewhat. But vertu have strong aftersales and used car operations. Barring no profit warning before finals this is good for 48p in the new year. Got to ramp when u have 80k in it now :-)) glup.
magazine, as of yesterday. Basically because of it's potential acquisition power, fwiw. With a P/E of 7 odd, it certainly does look cheap, but Brexit seriously threatens all those who buy German cars, it seems to me. Still, what alternative will there be, even with a load of tax lumped on? It just has to be a Beemer, Merc or Audi, doesn't it? (Says he, in his old Rover, lol).
I've decided to give the market the uncapped upside here, look & Camb ...selling c 49, 120, 70 & buying c42, 100, 60 ...working nicely.. ...until it doesn't lol ...go well
Jolly long time no here. Averaging down for me 87000 down to 44.5p. Took some profit and banked it at 48p In at the dragon at 29.5p and lookers at 109p may have to wait till 2018 to see any profit i think Gla
@c42.5p ...range trading here working for the moment
60p from 90p liberium What 6 weeks can do!
If there's spare cash in the company that they can't use for business purposes they should have declared a special and returned it directly to shareholders rather than use it to artificially increase their EPS numbers. The two buybacks together would have given a 2p special dividend. I'm very disappointed that the board has continued with and extended its buy back policy. Almost always in these cases there is a 'bonus' scheme in the background that converts EPS growth to executive pay/nonus and the buy back (which uses our money) helps to secure the trigger/payout. Today the board declared a 4.4% growth in EPS ... what they didn't say was that 1% of that was due to the small buy back that has already occurred. Overall, in time, the 6m buy backs will generate over 3% growth in EPS and virtually guarantee any executive bonus payments that are in place. Mike
Great cost control, lots of cash in the bank, increased divi ( .55% ) increase in service plans. Ok u can pick holes new car 14% down. But overall good numbers. 3 million more share buy back, should take sii down to 387m In line with market expectations.
Seems like its not recovering. Numbers good but forecast maybe no the downside. Well worst case scenario top up on the cheap. Not long but fear leakage has occurred as always. Gla