Member Info for CaneToad

@Hexam. Ah, the Hexam of ARGO Blockchain fame.

Good luck Sir!

Are you invested in CPI?

@Squid. I've never heard of any successful investor that insults people. That tells me something about you.

I didn't say that I thought it would fall further. What I said was, *IF* there was bad news flow, it could fall further. You need to learn to read and comprehend English.

I'm in CPI again, because I understand the company fundamentals and I've traded it several dozen times. I think its at least 50% likely to recover from here and that offers an excellent risk:reward of1:4, even if it just gets back to 40p. If it gets back to pre-covid levels, that's a 1:20 risk:reward payoff.

I don't mind discussion of shorts or longs, but I filter fools, rampers and de-rampers like yourself. Bye!

I've ploughed through the results again over the past few days and decided to re-enter this dog.

With a 25% stop, it's a risk:reward of 1:4 from this level. It's (theoretically) possible that it could be back at 100p within 2y, which would give a RR of 1:20. I can't see it going anywhere until there's a decent update, but the limited falls over the past week are encouraging, given the large daily volumes.

From what I see, pre-IFRS net gearing is still 150%, which is excessive, but it will fall to 120% if they can pay down another £100m in debt - maybe they can achieve that by end of Q3 or maybe Q2?

The biggest threat that I see is inflation. They have inflationary clauses in most of their contracts, but those are linked to RPI or CPI, while tech salaries are rising much faster than that - more like 10-20%. Then there's energy costs, which are sure to double, while a modest CPI adjustment is unlikely to give much.

Any bad news and I expect this is heading down to the 10-15p range and I'll be running for the hills.

Looks strong. Happy with the results. Surprised if we don't see a fund picking up some of these, e.g. Amati metals fund? They could of perhaps been more generous with the divi (5.5% yield at current price?).

The difference here is that CPI has lots of debt. Given the debt situation, the dislike of the company and the continual drops, I don't see why 20p will necessarily be the bottom.

https://www.youtube.com/watch?v=JVvwCkB-JLE

The absence of institutional selling is something that has confounded me for a long time. My guess is that it's too late to exit, without destroying the share price.

Regarding whether or not the 'glass is half full or empty'. There are multiple very large legal cases in progress. The total amount of funds involved is said to be $12b and TCAP has been called the 'spider in the web'. If only a tiny fraction of cases against TCAP are successful, it could be bye -bye TCAP.

I like to tell myself that 'there is a bottom' at 20p, but I think this is just a bias to not accept the facts, that this share is still heading down. I've averaged-down into this type of scenario many times and I can't think of it ever ending well. One of the most difficult lessons that I ever learned in trading is not delude yourself. The buy/sell volume here is as useful as a chocolate teapot - you have *no* way of knowing whether or not a broker is filling a very large order.

@Milkz: "On Balance Volume is rising whilst share price declining, an indicator that smart money are filling their boots. "

On average, I would say that is an indication of a big seller; not of smart money filling their boots. A falling share price, extending over multiple time frames is not bullish.

Change/1d: -1.2%
Change/1w: -2.4%
Change/1m: -29.3%
Change/3m: -42.1%
Change/6m: -58.2%
Change/1y: -55.6%
Change/2y: -30.8%
Change/3y: -83.2%
Change/5y: -93.9%

I very much doubt they're headed for bankruptcy, unless inflation hits them hard over the next 1-2y. Don't overestimate their role in the 'UK economy' though. Carillion vanished like a fart in the wind and nobody stepped in to help...nor did anybody care. I think most people are indifferent to Capita, if they've heard of them at all. In terms of The City, nobody would care less.

The cum-ex situation is like an unexploded bomb. And any development will result in a frenzy of new claims. I might get interested again when there's clarity about that. In the meantime, it's just too damn risky and there's no evidence whatsoever of institutional buying or PI interest.

Anyone that's been around CPI for a while knows the tricks that are played here. It's 'played like a violin' to suck in naive traders looking for a quick few percent and/or to trigger stop-losses.

This is defintely management's last year in the job. They will be removed if they can't improve the valuation by year end; perhaps earlier.

I find it galling that John Lewis has announced the completion of the turnaround plan, while the share price has been utterly destroyed. Sure they've lowered the debt a little bit by hocking anything not nailed down, but the overall achievment is underwhelming. As for Investor Relations, it's shocking. The market has lost faith in what they're saying. With enough accounting tricks and 'adjustments' you can buff even a turd, but nobody believes the figures. Just look at the non-response from the City. Nobody understood the results enough to even comment.

Anyone who claims to have never lost a penny in investment or trading is a liar or a fool. It's impossible to achieve that over a decent numbers of trades (hundreds) or long time duration (years). The very best traders have win rates of around 40-50%. If you have a very high win rate, it's almost certainly at the expense of very large losses on a few trades, that negate all of the small profits. i.e. through taking uncontrolled risk and having no strategy/edge.

I traded CPI several dozen times over the past 2y, but took a five figure loss on the last two trades, exiting a week before the last results. I got lucky on all of my CPI trades up until that point, but luck always runs out.

I've filtered some of the clowns on this board. They're dreamers and have no idea about trading, nor are they entertaining.

@Aim: As a trade. With a 20% stop and 100% upside, that's a 1:5 risk:reward, which is attractive. I agree that it should be higher on the basis that it's now cheaper than it was when things were worse, but the market often doesn't appreciate that.

I'm undecided whether or not to wait for the formation of a base @20p and buy the breakout on further positive news or to buy the falling share price now, which is usually a very bad idea.

"54m shares traded today, against a daily average of 8m"

Wow, good observation. I'm surprised the price didn't fall more. Clearly somebody big is picking them up. There was also decent volume on 10 March.

Change/1d: -3.0%
Change/1w: -1.3%
Change/1m: -29.1%
Change/3m: -39.5%
Change/6m: -57.4%
Change/1y: -55.6%
Change/2y: -49.8%
Change/3y: -83.4%
Change/5y: -93.9%

Will a base form at 20p? Yesterday's drop smells of a fund selling out.

The problem here is the debt. It's big no matter how you present it.

Positives: if they can push another £200m into debt reduction, the pre-IFRS 16 debt will drop below 100%. If they can combine that with a modest increase in profitability, there's a good trade. I doubt it's ever going back above 100p.

Negatives: Inflation could eat away profits and stop any further debt reduction, leading to a breakup and sale of the rest of the company. If that happens during a recession and if the company wasn't profitable, there might not be any buyers. The share price could keep sliding.

@Squid: "The price action is behaving exactly as you'd expect if a large number of ii shares were being sold into the market behind the scenes."

I agree, that is possible. That's why I commented on the ridiculous nonsense that NOFEAR has been publishing regarding buy/sell ratios. I would not bet on a rapid rise though. This share follows the FTSE sentiment with a huge beta. If the FTSE has a slightly down day, CPI will drop 2-3%. That's the nature of this share.

Change/1d: -3.2%
Change/1w: -3.4%
Change/1m: -30.7%
Change/3m: -39.6%
Change/6m: -57.5%

Maybe 20p will hold, but I'm not going to bet on it.

I'd say it's a punt from here. It could multi-bag, but if inflation hits them, it could also deteriorate and the price would flatline. I don't yet see any institutional investors rushing to buy.