The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
They crossed on the 8th August so were probably paying anywhere between 58 and 60 for their shares - if they're happy buying at 60 then so am I.
This might sound a bit ridiculous to some of you but I've been working on the theory that the government are keeping quiet about therapeutic advances to make the reveal that much more dramatic. Boris and Cummings are known for their unconventional and calculated political tactics so it's not out of the equation.
I mean, seven months into the pandemic and with community transmission already deeply embedded, they can't truly believe that testing is the best defence against this virus other than a vaccine.
It won't keep following the same pattern, that would be too easy.
I've got a question for the more experienced investors... if the US IIs are still increasing their stake would they be employing tactics on low volume days like today? I.e buying in smaller chunks so as to keep the share price stabilised? Or would they likely just buy what they want and keep paying higher prices as the share price rises?
The more ground between those allegations and results the better for boohoo, these things fade with time. Obviously the media will attempt to link great results with the slave labour claims but I don't think it will have much of an effect - everyone knows online retail is thriving and so growth is absolutely expected in this climate.
Personally I think a £700m contract is pie in the sky and to be honest if we did I'd consider that a big reckless from the government even though I'm holding a substantial amount of shares.
As we already have a six month contract in place I'd imagine it would be extended by six months in the range of 500k tests a week to 1.5m on the other extreme. I make that £58.5m as the lower bound and ~£180m at the upper bound.
To be fair Routy I've been thinking this for a while and so have you most likely, and up until now there's been nothing explosive. The investment case has changed somewhat as there is now less noise and excitement around what's happening in the US (some of us were hoping for tens of millions generated from US OEM) but the limelight is very much on the UK. It is not beyond possibility to get a contract in the region of one million tests a week which would be 40% of our current capacity straight off the bat...
My investment approach has always been to invest when sentiment is down or recovering, which is where I see novacyt right now. If fireworks are ever going to happen here they are going to happen before September is out... and that for me is enough to say I'm topping up and I'm topping up big time! GLA!
I'm really starting to believe there's an enormous contract coming our way. They're ramping up the rhetoric now re tests and they must be starting to run low as we move into the six month of our agreement. Add all those new nhs jobs and you've got to think this is almost a dead cert. So what's everyone's best guess contract-wise?
I'm going for a very conservative 750k tests a week for six months, so 19.5 million tests.
I agree with all this but try to think of it from Graham's perspective. We all know CEOs are beholden to their shareholders but their job is to create long term shareholder value, not short term gains. To someone on the inside like Graham he'll be focused on the job in hand with the plan to update the market some time in the future. To him a few extra weeks from now is nothing, to us holding thousands (and in some cases tens of thousands) of shares those extra weeks feel like years!
As long as we get sales news before September is out that will okay by me.
He didn't. It would be totally irresponsible to categorically rule out a second lockdown. He talked about enforcing the rules in order to prevent a second lockdown, something they want to avoid at all costs...
I don't think there will be a second lockdown but it can't be ruled out.
That wasn't what he said.
The problem (and I include myself in this) is it's so easy to get carried away by the hype and excitement and lose sight of reality. After seeing a 400%+ rise and in the current climate one does start to think that news will come almost weekly and emergency approval/licensing would all be done and dusted by now. The truth is these things take time, a lot of time and in normal circumstances a lot longer than what we're seeing now.
The IIs that are loading up now and have been for weeks will know this. They probably expect it to take considerably longer and are feeling no rush at all to position themselves as planned.