Member Info for alwayswrong

Thanks BB....I would like to see Farrage discuss Brexit with James O Brien as they are equally self opinionated but equally have a lot to say although I have to say that O Brien probably has researchers feeding him with facts and questions to ask during conversations ..
I read what you said about payday lenders with great interest...the thing that concerns me most is the activities of the claims management companies which pose more of a threat to Amigo than their competitors do..you are right , they are sharks and early signs suggest they are targeting disgruntled borrowers in default with Amigo..I will be reading Amigos half year accounts very closely and it hasnt gone unnoticed by me the steady daily declines in share price taking place on higher volumes..as I said the half year results will now be known internally and the possibility of leaks externally cannot be ruled out..

BB..I missed it...was it on James O Brien ?
What was the thrust of it ?

Ah Quick Quid...yes have just been reading up on them and I can now perceive a knock on threat backed up by a statement in the first quarter results statement..
Claims management conpanies have now entered into the foray which is bad news for us as they will parasite on the companies earnings by encouraging customers in arrears to complain to the company through them..
The 1st quarter results mentioned a large uplift in complaints along with increased provisions from 23% of income in default to 30.5% requiring more staff and costs to chase up...the direction of travel in both these areas will require closer scrutiny in the half year accounts..

Yes I am hoping for a positive signal too but I agree with BB that this is a longer term hold given its strong underlying fundamentals..

Yes I have already discounted a lower EPS based on 1st quarter results and still a value buy unless of course further damaging news waiting to be announced..

Beevorama...yes I had noticed that too although volume is still very low so I think this may be short term profit takers...the major shareholder would have to transfer their holdings to another large institution given the low liquidity of this share, otherwise the price would tank..
It is worth pointing out however, that even though the half year results are only due to be announced on 27th November, these results will now be known, given the half year ended on 30th September and it's amazing how often major shifts in share prices occur during this period which are usually in the right direction of the results and you can make what you want of that..

Hadn't heard that Quidco were in danger of going bust...I thought in any case they were a cash back referrals site rather than a sub prime lender..
Amigo charge one rate of 49.9% APR and only deal in guarantor loans where they command 80% market share...some other lenders charge less..
'Guarantor my loan' only charge 29% if both lender and guarantor are both homeowners ,
'UK Credit' only charge headline rate of 39.9% APR to homeowners but this rate can reach 69.9% according to circumstances..
'Buddy Loans' compete head to head with Amigo using their identical business model including charging the same APR....
Does strike me that Amigo's one universal APR does make it slightly uncompetitive in the market place for homeowner loans..
It's lending criteria was strengthened in that it has curtailed making repeat loans to the same customer , which has been the source of most of the complaints, and instead focuses mostly on new lenders thus dampening future growth..

BB...Neither Saga nor Superdry were buy and holds...but both offer short term trading opportunities due to their consistent price fluctuations , but neither dropped low enough for me to take a punt...
I can't really see any more tempting opportunities in the ftse350...can you see any at this time ?
That question goes to other fellow investors too..

Big Bang's....sorry for delay in replying earlier but I have been away...in that time both the stocks I was looking at have moved up around 10 to 15% so no longer on my radar ..
Saga was one of them which is a personal choice..I have always made noney on them...it climbed from 34p in June when I invested up to 51p in July, (I sold at around 48p) and fell back to 42p. and I was waiting for it to fall further from there but it has risen again ....there are always trading opportunities with this stock, but it doesn't come without risk...there are huge extra debts which have yet to hit the balance sheet in terms of capital commitments not yet due for payment which will cripple the company eventually...the direct result of a crass previous decision by CEO (ex Royal Navy) who likes boats and so bought not one but TWO big cruise liners ...even though they are really just a tour agent for old people rather than a cruise operator ...I have no doubt that in time that Carnival and and /or P&O cruises will compete head to head on their routes and use their hugely dominant positions in the market place to destroy Saga....they might take them over then sell of Sagas over 50s insurance business along with substantial customer database .I would in their position anyway...
The next is an emotional hunch really and it's Superdry...a premium brand clothing company , the share price went over £20 a couple of years ago before the founder was pushed out and a new CEO took them on a Primark discounted route and the SP fell below £4.00. The original founder who seems to have a Midas touch returned recently and the company seems to be recovering boosted by persistent rainy weather which helps their premium winter clothing product range..
So I think I have missed the boat on both of these..
Don't really have any more shares I am watching ..
I have read up on your other big holding Indivior and am still not tempted at this price as huge risk still, not only from legal proceedings but also knock on negative publicity effect on any new products to be launched..
Good luck though and if they do pull through all this, then their upward profit guidance should underpin substantial price increases on the future..
Anyway back to Amigo...moving up nicely but on very low volumes...do think though that if it can push beyond its current ceiling of 80p then it could rise up to and beyond £1.00 before Christmas , dependent of course on more positive half year results, which are to be released at the end of November..

Big Bang's...that first point you made about the potentially dangerous motives of a large corporate shareholder is a very strong one which I had overlooked... We should be mindful of the fact that if they really wanted to do it, they probably could at any time, but I inferred that this would result in suppressing future price increases as they drip fed their surplus holdings, rather than deliberately act to crash the share price and buy back in a fire sale.
I follow your philosophy though in that I buy when others are selling and sell once I have made 50%. For me the old mantra of buy and hold forever is a misguided one ...I look to move stealthily in and then out as quickly as I can before any setbacks occur...
My 'always wrong' name reflects that a share price is always wrong in relation to its fundamental value due to sentiment and other market imperfections so I try to buy when I think a share is undervalued and then sell when I think it's overvalued but have a stop loss at 50% gain....I bought into Amigo at 74.5 pence so have a 12.5% yield assuming no change in dividend policy .
Your opinion on Indivior is indeed backed up by the incredibly bullish statement in their half year accounts ..furthermore they have lots of cash on their balance sheet...the elephant in the room of course is the impending threat from the legal action which caused me to dismiss this share when the price was around 33 pence, albeit before their bullish interim accounts statement ...as it has turned out I missed an opportunity but at the time I felt that I was in effect betting on the result of a coin toss so I stayed away..
I have a couple of shares that are beginning to appear on my radar, but are not yet compelling enough to invest in

Big Bang. -. Yes my fears lessened once the markets opened and the share price didn't sink....then the rational side kicked in and I started instead to focus on the reasons why I invested in Amigo in the first place...very high dividend supported by strong fundamentals... Borrowing money at an average interest rate of 5.4% and charging if out again at 50% must make money even with defaults running at 30%. And yes any good news will lead to a disproportionately high uplift in the share price due to its low liquidity, just as the bad news had a disproportionate negative reaction in the share price.
So yes, fears allayed ..maybe I focus too much on the threats and blinker myself to the opportunities, although as always, a healthy dose of synicism helps when investing in any share...whether it be a turnaround share or a star performer..
One contributor, and I can't remember who, remarked that there were several other opportunities in shares out there to invest in if Amigo was judged too high risk, and I think that that would make an excellent new thread, as we will all have shares that we are following providing rampers don't spam the thread..

Thanks Monkshood for your very relevant and insightful comments...I will check them out...my instinct says this is still a good share , just temporarily out of favour , unless there is something underlying which is fundamentally unfavourable , but if there is then it isn't apparent from their regulatory statements..

Monkshood...thanks for your input...would relisting on either of these segments limit their exposure to other investors ? Having said that, this is where the current impasse is in that institutional investors aren't selling but at the same time retail buyers aren't buying even at these price levels...
Mike H...you make some very good points which I agree with and the price drop I was fearing on the opening of the markets didn't happen so it seems the only action required is patience and not try to second guess the market ..

Errhum.....your observations about the low free float and what it means reassure me because I am inclined to agree .
Still think the share price will drop when markets open
on Monday due to negative sentiment re the announcement but let's wait and see .

RAF...my references to Saga and Carillion werent intended to be company comparisons, but the dangers of becoming blinkered to the risks, external and internnal of our own private ahareholdings...
Regulatory requirements are there for a reason so any breach should in my view be treated with caution ....
The company anouncement was made at 6pm on Friday evening...after the markets were closed for the weekend . ???
I simply don't know how to interpret this because it hasn't happened to a share I have held before..
The rational side of me agrees with the comments you have made re profitability etc but I have an uneasy feeling about this...

Mike H...it's 75 million shares .
Total shares 475 million
21% of that is 100 million
For 100 million to equate to 25 % is 400 million shares
Resulting in 75 million (475-400) having to be bought back ..
This is just one scenario with all other things remaining equal and for illustrative purposes only..

Mike H...thanks for your input ..my concern is that if the minimum ratio is not subsequently met then it might be delisted which which would remove it from the radar completely
Yes I am a natural pessimist where shareholdings are concerned, not just Amigo, but that isn't necessarily a bad thing ..I got out of Carillon at around £2.00 and Saga at £1.28....i want to remain invested here but amber lights are now on with impending regulation and bad publicity of these kinds of loans plus this retail investor infringement... .
All opinions genuinely welcomed..

Thanks BB for your reply .
The pro's of this share outweigh the negatives too based on an affordably high dividend as a platform but at some point the 25% retail investor ratio must be met which means either institutional shareholders have to sell or at least cannot acquire more, or more retaill shareholders have to buy more and I don't see any positives in either outcome ..
Amigo could buy back shares off II's but would need to buy at least 75 million and at today's price that would cost around £55 million ...equiv to 12p of foregone dividends or do you think it will naturally progress to 25% without any direct intervention and if so why ? Why might it not conversely fall to 15%
I don't want to sell but I am concerned..

What are the implications of this from a private shareholders point of view..?
Does it mean that institutional shareholders will offload some of their shares resulting in a dramatic fall in the share price since the low liquidity means there is little demand from retail investors, or does it mean that the company will have to go private ..
Maybe it means there will be an enforced additional offering of shares to the public..
Or maybe it will result in existing shareholders to jump ship ?
This situation is a new one for me and am unsure as what to do as a result of this...
Can anyone enlighten me ?

It has just occurred to me that another looming large threat to future share prices is the significant holdings of the Richmond group who may decide to reducing offloading their significant holdins on the market in a drip feed process on any significant move up in price .. thus suppressing future sustained increases in share price for a prolonged period . This is the problem for private investors when such a large concentration of holdings us held in a few large institution hands..