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Posts: 883
Understanding what pushes shares higher ( or lower ).
Re-rating
When the market changes its view of a company sufficiently to make calculation ratios such as PE substantially higher or lower, this a re-rating.
Price movements, particularly large ones can be looked at by being broken down into two components:
profits
rating.
A share price goes up (or down) either because the profits (or cash flows) have increased (or decreased), or because the valuation multiples have become greater (or smaller).
As changes in profits and cash flows usually take longer to happen than changes in rating, correctly predicting how the rating will change will bring high returns.
This means that investors will usually do not only need to consider whether or not they believe a share is undervalued or over valued. They also need to consider what could act as a catalyst for re-rating. This is particularly true when looking at the short term.
Posts: 883
Why I believe Triad Group will be re rated upwards in the future.
Triad currently has U.K. government revenues of approximately £10M a year .
This comes from various frameworks , G Cloud, plus other confidential police and security platforms.
In 2022 to date the company has won positions on some gigantic U.K. government frameworks.
This information is published on Bidstats and Contract Finder can be obtained for free.
Triad Group is an SME giving it a distinct advantage on these frameworks compared with the big players . For more on this, research U.K. government policies to promote SME”S within the Tec sector.
On a pro rata basis i calculate Triad could win contracts to the value of over £85M out of the £5 Billion of workload.
This is not guaranteed, on most frameworks, but not all, they have to bid within the framework to gain a contract.
However the competition is extremely limited, for instance on the biggest framework just 103 companies are due to share £4BN of workload.
Triad Group super growth can also come from the private sector that produced around £7M of revenue last year.
It’s partner Workpoint 365 tells investors on its own web site its plans to grow 5 fold in the next five years. Triad receives recurring revenue from this partnership.
Finally Triad Group is partnered with Stratis Blockchain who intend to launch a U.K. Stablecoin as soon as regulation is approved. A Bill is currently going through its second reading to hopefully become law in the spring. That Stablecoin will need integration into the banking system. It’s already on the open source platform.
Triad results are due anytime this month.
Posts: 883
For a share to be re rated it’s not just about revenues.
Heaps of companies increase revenues simply by employing extra sales staff, reducing prices, and cost price promotions.
For a company to be successful sales need to grow fast at a high gross margin.
Triad Group have seen gross margin increase rapidly towards the sector average of between 30% - 40%.
Net margin has also jumped but has a long way to go in my opinion .
As revenues increase the overhead is spread across more income, allowing net margin to go higher.
This has an absolute magical effect on profits, that will I believe drive the re rate.
Posts: 883
What would be a realistic re rate :
First we need to look at the sector that stands on PE of 28.
Thus the shorter term target might be to re rate to the average.
However if Triad can grow much faster then the company should at least, in theory , trade at a higher PE.
I do not rule out a PE of 40 going forward especially if growth in profits exceed 40% a year. ( 70% last year ).
Each £1M of post tax profit should be worth £40M on Triads group share price on that basis.
Todays market capitalisation is £20M @£1.25P a share.
No debt, and £5M cash reduces its real cost down to £15M.
A re rate might take an age or happen in the space of days.
It might not happen at all , if investors don’t see rapid growth in both revenue’s and growth.
Posts: 883
Don’t forget the dividends:
As a rule you will not find a software sector growth share with a yield above 2% in the U.K.
Triad yield is 5% before any possible growth in the dividend, that might be announced with the interim results this month.
Yet another reason why I think it should outperform the market hands down.
Posts: 883
12/11/22
A pensions expert is warning 12.5 million older people across the UK to prepare for a financial blow next week when Chancellor Jeremy Hunt delivers the Autumn Statement. Ray Black, managing director of chartered financial planning firm, Money Minder, suggests there may be “continued restrictions on State Pension uprating”, higher taxes and more controversially, an increase to National Insurance contributions from April announced on November 17.
The Triple Lock rule is the UK Government’s guarantee that State Pensions grow in line with whichever is highest out of earnings, inflation or 2.5%. Earlier this week, Work and Pensions Secretary, Mel Stride said that pensioners will be kept to the “forefront” as difficult spending decisions are taken by the UK Government.
His comments come as Prime Minister Rishi Sunak considers raising State Pensions and benefits in line with inflation in a move that would likely usher in deeper public spending cuts elsewhere and higher tax rises. Treasury sources insisted no decisions have been taken, but did not deny a report in the Times stating they would avoid real-terms cuts on pensions and benefits.
Posts: 883
What could be in the Autumn Statement?
Essentially, everything is on the table.
The Institute for Fiscal Studies think tank says "big and painful cuts" to public services are likely.
The Resolution Foundation, another think tank, expects taxes to go up.
Pensions and benefits
An announcement is likely on whether benefits and pensions will rise in line with inflation - the rate at which prices rise - from April 2023.
Under the so-called "triple lock", the state pension is supposed to rise each year by the highest out of inflation (as measured by CPI), average earnings, or 2.5%.
The previous prime minister, Liz Truss, said pensions would increase in line with inflation, but Rishi Sunak has not confirmed this.
Posts: 883
FT - 13/11/22:
Here are five things I think the latest bubble got right, drawing on interviews with investors and entrepreneurs. FT readers will doubtless have better, or contrary, ideas.
First, the stock market has been right to attach enormous value to data, even if accountants have a hard time recognising it on the balance sheet. Those companies that can gather, process and exploit meaningful data have a significant competitive edge in almost every market.
Second, while globalisation may be slowing, e-globalisation is accelerating. The International Telecommunication Union estimate(opens a new window)s that 4.9bn people — or 63 per cent of the world’s population — were connected to the internet by 2021. It is targeting 100 per cent by 2030. Not only are people increasingly accessing the internet but they are accessible on it, too. A teenage programmer in a bedroom in Tallinn or Lagos or Jakarta can reach a global audience overnight.
Third, the Covid pandemic has permanently changed the world of work. Stock market investors may have suffered a sugar rush in excessively bidding up lockdown favourites such as Netflix, Spotify, Peloton and Zoom. But many companies will never be able to force valuable employees back to the office. So-called liquid enterprises that successfully hire and manage employees around the world are going to thrive — as are the companies that service this decentralised workforce.
Fourth, the energy transition will translate into colossal stock market wealth.
Fifth, the evangelists touting crypto and Web 3 may have so far failed to deliver many answers, but they are asking the right questions. How do we own and trade digital assets? “Blockchain is a game-changer. It is going to restructure the back office of the world,” says one bank chief executive.
This year’s cyclical downturn in public and private tech markets is crushing these secular trends. But in the past few weeks investors have been warming again to the attractions of fast-growing tech companies.
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So much of this random article from the FT today falls in line with my own style of thought.
Triad Group , unbelievably has most of the attributes above, it’s the stock I have selected to hopefully, get me over the line ( 100 fold increase in my SIPP pension over 20 years.)
Super fast growth.
Software
Data
Blockchain
Working from home ( a Triad consultant feature). Talent can afford to work from anywhere, most loathe the corporate office and the management that goes with it.!
Posts: 883
This is why in my opinion you should never invest in a “SO CALLED “ , safe bond.
Note the idiot fund managers who bought into the 100 year Austrian Bond. !!
?By their very nature, the price declines are particularly sharp for bonds with particularly long maturities. The second of the two 100-year Austrian government bonds issued so far has been anything but a good deal. It was issued in 2020 with a coupon of a measly 0.850% and an issue yield of 0.880%. This EUR 2bn bond was oversubscribed 12 times (!!!) when it was issued, which must have made the finance minister pretty happy. However, with inflation now running at more than 10.0%, investors are facing significant losses. The price loss since the issue is now around 62%, from the interim high in the fall of 2020, the minus is even around 70%.
Posts: 883
Cost of living crisis is forcing pensioners out of retirement and back to work, study reveals
Recruitment firm Reed says rise in job applications is partly driven by retirees
They say those who have retired are reassessing due to the cost of living crisis
It comes as Bank of England warned UK faced longest recession in its history
Britons are also facing a cost of living crisis with higher food and energy bills
By JAMES ROBINSON FOR MAILONLINE
PUBLISHED: 10:43 GMT, 14 November 2022
Pensioners are coming out of retirement due to fears over the cost of living crisis, according to one of the UK's leading jobs firms.
Recruitment specialists Reed say fearful retirees are reassessing finances due to soaring inflation and warnings of a looming recession.
They are also worried about a potential fall in the number of available jobs if the economy dips in the coming months, according to company boss James Reed.
Posts: 883
Mon 14 Nov 2022 22.00 GMT
Rishi Sunak has given his strongest hint the government will protect the triple lock on pensions, saying pensioners “will always be at the forefront of my mind”.
The rule, which applies to UK state pensions, means pensions must rise each year in line with the highest of three possible figures: inflation, average earnings, or 2.5%.
Sunak is likely to face a mass revolt should changes be made to the triple lock, which would mean raising UK state pensions in line with inflation.
The prime minister and the chancellor, Jeremy Hunt, have said they will look to put the greatest burden on those with “the broadest shoulders”.
Posts: 883
Yahoo 15/11/22
Is there such a thing as a good or bad time to invest in shares? Many people think so, but in fact the stock market is a place to buy individual stocks. So, whatever may be going on more widely, there can be good or bad moments to invest in individual shares. That is the approach I have been taking lately when hunting for UK shares I can add to my portfolio.
Here is why, if I had a spare £5,000, I would be happy to invest it in such shares today in the hope of boosting my pension decades from now.
As a believer in long-term investing, I spend time thinking now about my finances years ahead. That includes my pension.
One of the things I like about investing for a pension is that the long timeframe can work in my favour. If I buy shares today in companies that have excellent business models, hopefully over time that can generate profits and improve their valuation, boosting my pension.
Why I’d invest today
But why would I want to buy shares today rather than waiting? After all, some growth shares may be cheaper a few months from now if the falls we have seen in markets like the US continue. The Imperial Brands share price is 27% higher now than it was a year ago. If I wait and am able to scoop the shares up at a lower price again in future, I might be able to earn a higher dividend yield than I could do by buying them today.
Although that is true, timing markets is hard at best, if not impossible. Instead of trying to time markets, I prefer to assess whether I can invest in what I think are great companies while they trade at an attractive price. If today’s price really does offer me good value, I do not worry if the shares become even cheaper in future.
Compounding high-yielding UK shares
Buying now also lets me benefit from a long-term timeframe when it comes to investing my pension pot.
That can help me build value over time. In the case of UK shares that pay dividends, that could help compounding work in my favour. In other words, the dividends might help me buy more shares that in turn pay more dividends.
For example, if I put £5,000 in shares with an average yield of 7.9% today and compounded the dividends, after 20 years my pension portfolio would have more than quadrupled in size even if Imperial’s share price was flat, as long as the dividend was maintained. That illustrates the power of time when investing.
Posts: 883
My personal opinion.
7.9% return per year is clearly pathetic over 20 years.
Allow for inflation and the chances are, your going backwards.!,
No : The way forward is to produce annual returns nearer 20% and get them compounding.
That’s about the only way to achieve a huge pension pot ,from a very low initial investment, without making 20 years of payments into a pension plan.
Posts: 883
Food for thought.
How rich are pensioners in the UK?
More than three million over-65s are living with over £1 million in housing and pension assets, amounting to one in four pensioners, according to research by the Intergenerational Foundation.
That number stood at 846,000 around 2008, showing how retirement wealth has ballooned over the past decade.
This has meant an intergenerational wealth divide has been widened, with income growth for pensioners fast outstripping any real-terms increases in wages.
According to the Office for National Statistics, almost three-quarters of over-65s own their homes outright and nearly 70% have a private pension.
Posts: 1
Interesting read, should I invest in single shares within an ISA or SIPP then? I’m 36 if that helps. Be grateful for your advice.
BW
Posts: 883
I can’t give advice , but if it was me I would say an ISA .
But only just.
If you read back through my blog you can see the pro’s and cons, of them both.
Good luck
Posts: 883
Apply this thought line to your investments, and hopefully your do well.
line
Musk shows his ruthless side
Analysis box by James Clayton, North America technology reporter
Elon Musk likes to think of himself as "hardcore".
He says he works 100+ hour weeks. He sometimes sleeps at the office.
And he wants that for his staff too.
His management philosophy is about putting together small collections of highly motivated and capable employees.
He says he'd much rather have a small number of exceptional people than many who are "pretty good and moderately motivated
Posts: 883
In my opinion the vast majority of pension fund managers are run of the mill happy o achieve the established 7% a year.
Not good enough
Posts: 883
State pension to rise the rate of inflation
11.1% today.
Posts: 883
Telegraph reports today , the cost of U.K. government staff pensions will increase 150% over the next 3 years.!
Yes : you have read that correctly, 150%. Not 15%.
Posts: 883
More:
Taxpayers face a 150pc jump in public sector pensions costs, as double-digit inflation prompts the biggest pay rise for retired public servants in a generation.
The cost of paying the “gold-plated” pensions is forecast to more than double over the next three years alone, thanks to a rule which dictates all retired Government workers receive a pay rise every spring in line with the previous September’s inflation.
The Treasury is expected to spend £3.3bn on retired public servants’ pay in the 2022/23 tax year, rising to £6.2bn in 2023/24 and then £8.2bn in 2024/25, according to documents from the Office for Budget Responsibility published alongside the Autumn Statement this week. It represents an increase of 148pc over the next three years.
Posts: 883
Stat Attack
New research conducted by Cicero/amo, commissioned by 7IM, shows that almost a third of retirees in the UK would have taken a different approach to their retirement income planning if they could do it all over again.
32%
1 in 3 UK retirees would make different financial decisions about their retirement pots if they could go through the process all over again
30%
Would ensure they have greater guarantees on their income
20%
Would take less from their savings in cash upfront
20%
Would look for a tax-efficient approach
19%
Would opt for greater flexibility
Posts: 883
Pensioners forced to raid retirement funds to rescue cash-strapped families
Pensioners are being forced to raid their retirement funds early in a desperate bid to help support their families through the cost of living crisis, research has warned. The study followed government figures which showed 500,000 people withdrew £3.6billion from their pension pots in the three months to June this year alone.
Posts: 883
Financial watchdog reveals £49m pay-out over British Steel pension scandal
UK NewsPublished: 4 hours ago
The Financial Conduct Authority (FCA) said more than 1,000 former British Steel Pension Scheme members are set to receive redress payments.
Posts: 883
The scandal dates back to 2017 and 2018 when members of the plan transferred defined retirement benefits to a riskier arrangement following a restructuring prompted by Tata Steel.
Around 54% of transfer recommendations by financial advisers were unsuitable, the FCA said, exposing members to losses in retirement funds.
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The reason I personally don’t trust any financial advisor.
Posts: 883
The single stock, that I hope will enable me to hit my pension goal of 100 times, my original investment, over 20 years, has issued this statement today.
I have 2 years 8 months remaining.
Triad Group Plc
18 January 2023
Legal Entity Identifier (LEI) No. 213800MDNBFVEQEN1G84
Triad Group Plc
Trading Update
In my Chairman's Statement dated 30 November 2022, I said
"I am also delighted to say that the beginning of our second half year has seen a strong upturn in levels of new business wins and bidding activity."
I continue to be delighted at the speed and vigour of our recovery from the extraordinary delays (not of our own making) we experienced for a period of several months during the summer of 2022. Now that the Christmas holidays are behind us, we are looking forward to a very strong fourth quarter, which I am confident will be the basis for a successful following year.
Dr J C Rigg
Executive Chairman, Triad Group Plc
18 January 2023
Posts: 883
Those who have read my thread, from the beginning, will have picked up on the importance of having cash on the balance sheet, of any company, prior to your investment.
Safety :
Fortunately for myself, the benefit of this came into play last summer , when the U.K. government spending decisions stopped dead for months.
Triad group plc, my single investment, found itself in a position where the pipeline of orders, stood still, and did not progress.
This resulted in a £400,000 first half loss ( April through September).
Still leaving a net £4.1M cash on the balance sheet going forward .
The company informed shareholders on Dec 1st that the second half had started well ,as contract wins , and bidding activity, has at last, come through.
This week the chairman updated again ( see my previous post ).
Predicting a VERY STRONG 4th quarter.
Posts: 883
This is interesting and unknown by most :
It’s the amount of cash put aside , for private pensions ( not state).
It basically means most other countries are totally relying on todays taxpayers, footing just about all the costs, for all pension pension provision.
Most U.K. workers will have at least some private pension, to supplement the state pension .
Look to the OECD numbers on this. As well as the much-quoted numbers on basic state pensions, the OECD also looks at the level of pension assets in each country and at those assets as a percent of GDP. In the UK, that number is 117%. In Italy is it 9.7%, in France 11.1%, in Germany 7.8%, in Greece 1% (yes, really), in Portugal 11.4% and in Ireland 34%. In Australia, which got started on auto-enrollment before the UK, it is 146%. Seven countries in the OECD are responsible for more than 90% of its pension assets in absolute terms — the UK is second on that list after the US.
Posts: 883
Those that believe the EU has a better pension system would do well to read this
The German public pension is a so-called pay-as-you-go system which means that current employees pay for current retirees. Therefore the pension will deteriorate as the number of pensioners will grow rapidly compared to the number of working contributors.
Posts: 883
Demographic change in Germany is becoming more and more visible. According to new estimates from the Federal Statistical Office (Destatis), the number of people above retirement age in Germany is expected to rise by 22 percent by 2035.
46 pensioners for every 100 working people by 2035
Destatis said that the number of people aged 67 and over in Germany will increase by 22 percent between 2020 and 2035, from 16 million to more than 20 million. They calculated this from the results of a medium-term population projection that looked at how pandemic-related changes could influence the pace of demographic change over the coming years.
Current calculations show that the ratio of retirement-age people (67 years or older) to people working (aged 20 to 66 years) will shift considerably in the future. Depending on the level of net migration, by 2035 there could be as many as 46 people aged 67 and over for every 100 people aged between 20 and 66. In 2020, this so-called “old-age quotient” was 31.