The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
... buy on the cannons, sell on the trumpets ...
lots of cannon fire today ... hmmm
You're not wrong, TF imho.
Turnaround complete: debt free and generating FCF.
What holds this share down is sentiment. And there is a LOT of sentiment. It simply has a bad reputation as a share because its crash was so destructive of wealth for so many investors in 2015-2021 period. You can't blame the market for hating and fearing this share. The fact that, post-turnaround, that hatred and fear is now irrational, is neither here nor there. It's just emotion, but that is a powerful force in the market.
The organisational and economic transformation is complete, but the emotional turnaround hasn't even started yet. Capita is like a criminal who has served his time and is back at liberty, but no-one fully trusts him yet.
Enjoy the "irrationality discount" while it lasts.
@Beachfeont, what is your analysis indicating that low valuation?
My analysis is the same as Trenners .... but I am open to contrary thinking.
Why is this share worth 20p?
Really tempted to buy in more today and get a return from results in August ... but where do we think the bottom is? That age old question ...lol
Buying opportunity on the horizon again ...
Do I want more CPI shares?
... Of course I do!
If it gets to 25p I'll fill my boots. Again.
... by which I mean if you try to swing trade it you can get burnt / locked out ... as we've seen recently with one or two unfortunate 'playas' on here lol
The only useful way to see this share is as a penny stock with some long potential because of:
- high quality recurring revenues
- rebooted balance sheet
- rebooted operating model
- existing customer base in the core
- earnings are increasing, not decreasing
- return to profit and FCF this year
History is ... history. That's gone. Forget it. Look at what it is today and ask yourself, is it worth 33p per share? If your analysis says 'na' ... then just walk away. If, on the other hand, you see the value that I see, then jump in. But be prepared to hold for a year +
IMHO , DYOR, GLA
... so maybe this share only works for longs ...?
What are you guys talking about?! In the past year the SP has grown from 24p to 32p which is a 33% increase. That's double your money in less then 3 years growth. What's all this crapola about stagnant share price. I'll take 33% growth thanks very much!
The secret with CPI is, IMHO, be patient and average down when the opportunity presents.
If it did slip back into the 20's (unlikely), I'd just buy more. If my average was was in the 40's or 50s (or more), I'd use the current prices to average down before the astonishing opportunity slips through my fingers.
If you know what you're doing, it's a wealth creator.
IMHO DYOR GLA
I averaged down to 24p last year. I'd recommend averaging down if you can as the 30s will seem like a distant memory soon imho ... just as the 20s do now. Really enjoying the growth and excited about future now. Post restructure and debt cleared. Excellent business.
DYOR
A wonderful validation of Capita's trusted status as a steward of sensitive information
Nothing new here.
Might have, Maybe, Possibly etc etc.
Local news scraping the barrel to create a local interest story perhaps?
Yeah - what was that about?
Stop encouraging him! lol
A sensible, rational focusing move. These little software businesses were part of the growth-at-any-cost spending spree of the 2000's and have little to contribute to the core pillars of Experience and Gov ... so I'm glad to see them gone and glad to see £44m hitting the balance sheet.
This removes another pile of technical and organisational debt out of the business which will have a positive effect on ebit and the SP as it filters through. It makes Capita more focused, efficient and profitable.
CPI is my biggest holding by a mile now. Why? Because it's the best value share of the decade. Why a value share and not a value trap? Easy: earnings are growing, not declining and the share is cheaper than chips.
IMHO DYOR
I'm a bit disappointed in the chairman, David Lowden. He's not supporting the shareholders, which he should be doing imho
Balance sheet fixed, pipeline full, business in profit .... now is the time for a good chairman to push for SP growth.
So where is he? Perhaps Schroders and the other II's might seek a replacement? I would if he remains complacent as appears to be the case ...
imho dyor
I agree re the value opp here. I already added significantly this week.
I've asked the following question many times on here (rhetorically): is CPI a value opportunity or a value trap.
Well, the definition of a value trap is a cheap share where earnings are in decline. A value opportunity is a cheap share where earnings are increasing.
That makes the decision simple, does it not?
I agree. Fundamentals are solid, pipeline is full, debt problem is eliminated, strategy and structure is sound, SP is undervalued, re-entry to FTSE 250.
50p by August IMHO.
Buy and hold, boys and girls. Buy and hold.
DYOR, GLA
50p by September, 80p by Christmas, £1 by the half year results next March .... IMHO
£31.
Contact me and I’ll sell you some at a discount - just £25 each ;)