Member Info for chilting

Fender
Investing is all about conviction.
Its very important to have the conviction that in the long term a companies future will be successful - by the long term I mean at least 3-5 years.
Hence, my belief that in the long term M&S will regain their past success and be in a position to fully reward shareholders.

spindok
Yes, it did seem that we were just going to have to endure a short shallow recession, but now it looks like interest rates will continue to rise and remain high throughout 2023 with inflation still to peak.
Most of the damage was originally inflicted by Covid, but I agree that Putin has put a stop to recovery.

Energy supplies will need to balance with global and national contributions from carbon and green to help reduce prices. If the UK Government does impose a price cap on tariffs it will be a financial imperative for them to promote all home produced energy sources to relive the financial burden.

It seems likely that the new Prime Minister is probably going to impose a long term cap on energy tariffs for consumers and maybe for some businesses as well.
This would probably work on the principal that Government would pay out subsidy when energy prices were high and receive revenue when energy prices fell.

Also I wonder about the Petroleum Revenue Tax. Could this be reintroduced with new decommissioning projects being put on hold for a year or two?

Fender
Its a question of patience plus not being forced to sell.
If you can commit to a long term investment then what goes around comes around and you will eventually be in profit.
But, if you need the cash then trade the dips or get out as you have done.
The third option is to invest in inflation proof stocks such as AZN.

"The Fed’s main rate is currently 2.50%, holding at the upper bound of the so-called neutral rate of monetary policy. Fed Chair Powell’s comments suggest that the Fed’s main rate will move above 2.50% and stay there for some time."

This tells us all we need to know - US interest rates likely to increase and remain high thro 2023.
Any recovery is on hold.

I don't see going into cash as an option with inflation building.
Best option is to stay long or trade the dips if you are into trading.

https://www.dailyfx.com/forex/market_alert/2022/08/26/us-dollar-whipsaws-around-powells-jackson-hole-speech.html

"The Fed’s main rate is currently 2.50%, holding at the upper bound of the so-called neutral rate of monetary policy. Fed Chair Powell’s comments suggest that the Fed’s main rate will move above 2.50% and stay there for some time."

This tells us all we need to know - US interest rates likely to increase and remain high thro 2023.
Any recovery is on hold.

https://www.dailyfx.com/forex/market_alert/2022/08/26/us-dollar-whipsaws-around-powells-jackson-hole-speech.html

I guess the company that TRX signed a distribution deal with last March - Geistlich Pharma - is also a competitor and looks to be a dominant player.

https://www.lse.co.uk/rns/TRX/distribution-agreement-for-orthopure174-xt-ozt5zim73s4m104.html

https://www.geistlich-pharma.com/

Just back from holiday.
Note that the SP is still just drifting sideways, as it has been since the Spring.
I don't think that much will change until we see a way through the current economic problems.

M&S has had to endure the pandemic and what looks like a recession, but will finally emerge as a much fitter and more dynamic company than most of its rivals on the High Street and online.

So for me this boring trundle is worth enduring and the future is excellent with a return to full profitability and dividends, in a market much altered since 2019 with significantly fewer players and with many of those remaining shell shocked or on their uppers.

US crude production approaching pre-pandemic levels.
OPEC+ will need to start cutting production soon to balance supply and demand or Oil price will start to fall back.
Its starting to look like the oil supply problem caused by Covid is ending.
Hopefully the oil price has now peaked and inflationary pressures will start to ease.
Natural Gas production in the US is also increasing - analysts are now saying global gas prices could fall in 2023.

US crude production approaching pre-pandemic levels.
OPEC+ will need to start cutting production soon to balance supply and demand or Oil price will start to fall back.
Its starting to look like the oil supply problem caused by Covid is ending.

Numbers on US inflation lower than forecast causing a nice bounce up.

The bad macro has undoubtedly made things far tougher, especially coming after Covid, I think DP is correct, but businesses have to ride out these problems, the trouble is that Eqtec is at a very vulnerable period in its growth cycle so it may be unable to recover.

The best option for shareholders would be to put the business up for sale as a going concern with a full order book and great tech and do that now rather than wait for the business to fail.
That would give a new buyer with deep pockets an excellent prospect for the future and hopefully flush out more than one prospective buyer to get a bidding war going.

The good news can only be cash flowing in.

I guess the latest fund raise has given about 3-6 months breathing space? - can anyone confirm if this is correct.
The market cap is just £41m, so I think the worst case is already in priced in, as long as the business continues trading.

If the business was put up for sale then its possible that with active interest, shareholders could get rather more than £41m - I think we all accept that the tech is good and there is excellent demand for it.

Hopefully DP will start to pump the cash, but I don't now see a long term future for this business in its present state, I think it would fare much better as a division of a much larger company such as Wood. The cash flow problems for such a small business are simply too big too overcome and they will just repeat over the years.

Cheap
The current economic problems have knocked back the valuation of Ocado Retail and M&S's 50% it is currently reckoned to be valued at more or less what M&S paid for it. But this is a low ebb and the business still has massive potential to grow.

In the medium term Ocado Group need the revenue from Ocado Retail to part fund the global expansion of their Solutions business. But as revenue grows from Solutions the Retail business will become less important to them.

From memory, I think Ocado and M&S have until 2030 to do a deal on the other 50% before Ocado would be able to ask for interest from elsewhere.

Regarding store closures - most of the older High Street stores have now closed, these are stores with high rents that are difficult to service, and have generally been replaced with modern out of town stores.

I don't think there will be much reduction in the total number of large stores in the future and the Convenience Store network will continue to grow.

This demonstration doesn't seem to use Eqtec technology.

https://www.woodplc.com/news/latest-press-releases/2022/wood-launches-next-generation-of-hydrogen-production-technology

Regarding interest rates - at 1.75% the rate is still low and also lower than the US at 2.25-2.5%.

It seems to me that the Bank of England is talking the country into recession rather than pushing it.

Not that this is a bad move, if it works we could see a much shorter recession than predicted, especially if Russia end hostilities in Ukraine.

Need to wait for trading update - due in a few weeks - issued 20th Aug last year - no company provides a running commentary on sales - stopping sales of disposable BBQ's very positive, especially in drought - vile things - hopefully other retailers will follow M&S lead.

I guess a rise like this is an indication that yes, the NADAQ is pulling up the SP but also that some of the shorts are cashing out.

Not sure that this is an actual SP recovery but can hope especially because the macro had pushed the SP heavily oversold.

Fair value would seem to be part way to Berenberg's recent price target of 1290p at around 1050p over the next couple of months with maybe 1290p attainable with a good news RNS by Christmas.

Its wrong to attribute the high occupancy just to seasonal demand, although that is obviously a major factor.

The main driver of demand is the demise of the opposition, no so much from the larger hotel groups, but from the thousands of small hotels and B&B's that have closed since Covid struck and also the pubs with accommodation that have closed.

So, even if demand falls for UK accommodation, Premier Inn is likely still to be busy with high occupancy levels.

The real challenge is staffing and even that situation could improve with more cash strapped workers looking for jobs.

Good numbers and interesting comments particularly regarding improved store sales.
This is the stand out - I guess it also applies even more to M&S and could have exceptional significance to their trading performance for the foreseeable future.

"We suspect that the apparent improvement in the fortunes of our stores is, to some extent, down to the number of competing stores that have closed in the last three years. This is supported by ONS industry statistics3 for February to June which suggest that the total money spent on clothing in all UK retail stores is down -6% compared to three years ago."