focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Bought this cos of its growing healthcare business making medical dressings etc. Convatec obviously felt threatened enough by it to renege on a big contract. Market is valuing it as a cyclical industrial rather than as a healthcare company. CEO hasn’t bought any shares at market price for several years until the recent placing at 105p so is a vote of confidence. Onshoring of supply chains particularly in healthcare should help.
AAF bottom line is quite exposed to the Nigerian Naira which makes up nearly half of profits. Debt interest is in USD. Nigeria has restricted selling of Naira for USD during lockdown which has fuelled speculative buying of USD in the country, devaluing the unofficial exchange rate. Appears the government is about to start buying Naira again and has decent reserves so devaluation pressure should ease. Longer term the oil price needs to recover for Naira to maintain value.
Another reason why the market may be discounting Africa stocks and currencies is the risk of severe outbreaks which has not yet occurred. IMO this would've already happened by now in the large urban and globally connected cities like Lagos and Nairobi but medical evidence seems to point to a link between Vitamin D deficiency and covid-19 death rates. I doubt many people have Vit D deficiency in sunny Africa where people spend most of their day outdoors.
Dunno how Credit Suisse think they can get away with such a brazen attempt at market manipulation in order to profit. Probably have calculated that FCA have their hands full right now trying to rescue the economy.
AAF looks very cheap but main risk is of windfall taxes on telcos by African governments. Covid-19 gives them the perfect excuse to do this. I reckon AAF is probably in a better position than some other players in Nigeria thanks to London/Nigeria dual listing and the UNICEF initiative might encourage politicians to choose a less popular company to pick on. Risk is in the price IMO
Read somewhere that BT's preference for Huawei not just the 5g kit cost but also compatibility with existing installed Huawei 4g kit. With 0% Huawei mandate looking likely due to political tension, will increase BT capex costs. Question is will the govt compensate and how much?
Further details about game-changer Lampore test kit developed by Oxf Nanopore, published after market close.
https://www.dailymail.co.uk/news/article-8349083/New-coronavirus-test-gives-results-hour-start-mass-screening-weeks.html
@Foxrod, I agree with you that buying IPO is worth the price for Nanopore alone, the balance sheet cash and the other 100+ biotech and tech holdings are a bonus. Given the biotech frenzy going on now, a listing for Oxf Nanopore looks pretty likely in 2020/2021 now that they can show off impressive and growing revenues.
Telegraph article today:
Oxford Nanopore develops Covid-19 test system that can process 30,000 samples a day
https://www.telegraph.co.uk/technology/2020/05/22/oxford-nanopore-develops-covid-19-test-system-can-process-30000/
@DD77 I agree that Invesco probably want rid of everything vaguely associated with the now toxic Woodford brand. But they could've dumped much larger chunks of the IPO holding sooner before the big fall in March. The steady decline in their holding suggests to me the sales are being driven by fund redemptions from their tainted Income fund. Now Barnett has gone perhaps investors will give Invesco another chance.
IPO top riser in the FTSE 250 this morning. The Oxford Nanopore news might be driving the price given that the holding is worth almost half of IPO market cap. The Nanopore Covid-19 testing solution has many advantages over existing tests and is not limited to coronavirus. It can easily be adapted to test for any virus, bacteria, fungi or indeed anything that contains DNA or RNA. https://nanoporetech.com/covid-19/lampore
From IPO website today:
(details of ONT covid-19 testing solution)
https://www.ipgroupplc.com/media/portfolio-news/2020/2020-05-22
Does PFG’s business model hold up in the new normal of social distancing? Same would apply to Morses club.
As an employer, they could be negligent in allowing their employees to enter clients houses were there may be coronavirus present, never mind the willingness of clients to let them in. IMO H&T (which I hold) offers safer exposure to the alternative finance market.
From Matt Han****’s Downing St briefing 21st May:
https://www.telegraph.co.uk/politics/2020/05/21/coronavirus-update-uk-lockdown-schools-boris-johnson/
Matt Han**** says that the Government is working on 'rapid turnaround' testing
The Health Secretary confirms the Government is working with companies including Oxford Nanopore to develop rapid testing.
He confirms that one such early test is being trialled from today.
He said: "And it is interesting to us because it is so fast. It doesn't need to be sent to a lab to be processed and so you get the result on the spot typically within around 20 minutes.
"It's already proven effective in early trials, and we want to find out if it will be effective on a larger scale."
1. More driving holidays
2. Less public transport, more car use
3. Less new car purchases, people running older cars for longer.
4. Strong brand and reassurance in a time of anxiety.
5. In extremis could probably qualify for govt help as provides "4th emergency service"
6. Silly cheap valuation
7. Debt burden catastrophic if rates need to rise medium term.
Have little idea what Clinigen do besides buy and sell drugs around the world. I guess it worked well for Pablo Escobar. Valuation seems reasonable and very popular holding among fund managers. Covid-19 doesn't seem to have hit it at all.
Strong cycling and turbo trainer sales have driven the recent sales growth but there is another dimension to Halfords - motoring. As recession hits, less people will get shiny new cars on PCP and will need to keep running their bangers for longer. This means more trips to Halfords for batteries, Oil, wiper blades etc as well as their servicing centres (rather than main dealer for that shiny new Audi). Also most families planning a holiday this year will probably be driving, which means strong sales of roof boxes and bars, bike racks, coolboxes, tents and other paraphernalia.
Even after divi cut is one of the top yielding in FTSE100. Income funds are running out of places to go so will have to start buying IMB now there is more clarity over future dividend plan and adequate cover. Decent multiple achieved on cigar biz sale too. Is on a discount to BATS. French have found that smokers are less likely to die of covid-19 so at least one serious health threat to business is gone.
Several tailwinds blowing for H&T at present:
1. Rising gold price means gold trading margins up and held stock of jewellery worth more.
2. Falling incomes means more demand for short term lending
3. Doorstep lenders Provident and Morses business model looks shaky in a world of social distancing. So reduced competition.
4. Rents falling so can renegotiate lower on lease renewal
5. Business rates freeze and likely downwards at next review.
6. Banks reluctant to expand unsecured lending in current environment.
7. Rival pawnbroking chain gone bust and sold best shops and pledge book to H&T at fire sale prices. By far the largest chain with strong brand. Average pawnbroker owns 4 shops. H&T has 240 odd.
8. Payday loan industry has vaporized. Wiping out a source of poor credit finance.
9. Canny investors Artemis have a significant holding.
10. V conservative balance sheet so could easily leverage at low rates to expand loan book once FCA review complete.