The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
From what I see, ADIG has been more-or-less declining since 2014. It has an exceptional track record of paying quarterly dividends, but the decline in the share price has eroded that, so it's been a poor investment over that time. Perhaps it will perform well if you manage to catch it right at the bottom of the cycle, but I think there will be lots of other places to invest at that time.
You guys make claims but don't provide anything to back them up. e.g. you'd never heard of Ince, which is a nearly identical company. And you made ridiculous (misleading) claims that KGH was the biggest law firm in the country, which is complete nonsense. I pointed out it was actually the 68'th biggest firm.
I like the company and am invested here, but I think it's wise to be careful when it's dropped almost 50% in a couple of months. I look forward to hearing some genuine news on fundamentals or technicals from you guys + anything from short-sellers, who are also most welcome here.
Nobody knows where the bottom is, but some of us are guessing that it's lower than the current price, which is a reasonable guess, given the continued selling. FYI: not all law firm shares are dropping, e.g. Keystone. I don't think the current drop in KGH is anything whatsoever to do with the other AIM shares. It's simply because there's a large background seller in KGH and it's a very thinly traded share. Obviously it could explode if DB starts buying again.
Good luck!
Question is - how low will it go? That's always a dangerous one to answer. The concern is the pattern starting to emerge in the rent collection, which was consistently 100% up until 2021, then dropped by a miniscule amount in 2021 and plunged to 91.8% in 2022. The golden question is what it will fall to in 2023? SOHO's largest tenant amounts for a whopping 30% of the rent and has been deemed to be 'non-compliant' by the regulator, who thinks they're unsustainable and vulnerable to financial problems. Like always there's lots of paranoia.
Re: Keystones, they're in a totally different league to Knights, with an impeccable balance sheet and amazing growth. Knights is more like Ince... though I take my hat off to the exceptional ability that DB had in offloading such a huge block of shares right at the top. It looks as though the tide might have turned now, but who knows?
Yeah maybe it's the bottom; if so, I missed it. The volume yesterday was good, but I'm cautious as there still seems to be a big background seller. The setup looked more attractive in reward vs risk when sp around the recent low of 67p.
Tony/Stas, how in any way are my figures incorrect or misleading?
You guys are simply promoting your own position rather than wanting to give a balanced view point. You immediately insult people that have an opinion different to your own.
I stated quite clearly that the target price was from a House Broker (WH Ireland) on 27 Feb 2023 (31.6p) vs the view from the same House Broker on 12 Sep 2022 (66p). It has been drifting down for months as has the price itself.
Clearly the target from 12 Sep was their highest, but that is important, because the price has been in decline roughly since 6 Jun 2022.
The fundamentals of the company are good, but they are inextricably linked to the price of oil/gas and so any adjustment to fair value is important.
As I have mentioned here many times. I have a long position in I3E, which I have held for a long time. I welcome hearing opinions different to my own, including those of short-sellers. I have absolutely no interest in hearing your opinions, which border on obsession.
Solid results; good company, but significant downgrade in I3E price target to @31.6p from 66p on 12 Sep 2022. That's less than half of the existing target and this is the house broker who is being paid to help sell the shares... Sorry, this needs to be mentioned for a balanced view, which people here have edited out of their cut & paste jobs.
Anyway - I still think this is an interesting company. The vast majority of listed law firms make their partners rich - not the investors rich. BUT, I think there's a good trade to be had here at some stage. All it takes is for DB to start buying again and/or for an institution to buy. The sector as a whole is struggling at the moment, but that will eventually change.
@Dartron: "Says the guy quoting Stockopedia and misunderstanding the debt."
Nope. There was no misunderstanding at all. The Net Gearing figure that I quoted (94.3%) is correct. That represents their true liability, including all their leases and is a reliable and consistent indicator across companies. That gearing is high. I went on to explain that the lower figure in their RNS is the pre-IFRS figure.
@Dartron: "Does it matter Its only a statistic."
Yes, it does matter if you make a false claim, without checking it, because somebody might actually believe it!
Just to repeat. There is no truth whatsoever that Knights are anywhere remotely like the biggest UK law firm. Have you heard of Clifford Chance, Allen & Overy, Linklaters,..... They are in a totally different league to these tiny AIM-listed law firms.
@Dartron: regarding your comment that Knights is "Currently the largest UK law firm."
That is not even remotely correct. If you look up the league tables, Knights Group is the 62'nd largest UK law firm by revenue. i.e. they are a *tiny* firm compared to any of the big City law firms. They are an AIM-listed company.