Member Info for DC2007

Thank you for posting this in full.

There are some reassuring points in the response. Not least an implicit acknowledgement that the BOD thinks the equity valuation is too low. Did you ask if they had covenants pegged to the market cap?

Atb

Hi oldtimer. Is this statement somewhere in the press?

Atb

Yes, I know traders/speculators will not care so much about the fundamentals; although being able to spot if it's likely to go bang is useful. The tangle of short positions and ownership among parties with interdependent interests deserves at least a glance from the FCA.

That last update was not good. Lower production will drop revenues in the coming year to $450m. So earnings will be lower, and that's before the still very large debt is serviced. It'll be more than a year before they might be able to grow earnings again. Good luck to those trading it.

The dividend will be passed in October with the trailing yield already >25%. The market will still punish it with a brutal further drop of 1/5 or 1/6.

Attractiveness at the current SP is aligned to a buyer's timescale and appetite for risk. It's very high risk for the principal, even for speculators looking for a large, quick return - it could half again smartly. Instead of a very good PE, it's so low as to be a red-flag. Selling Magasin might bring temporary relief but it's profitable and growing, unlike the rest of the business. Debt will be £320m (>2x current market cap) at the year end.

All the cash spent on the transformation has depressed earnings rather than improved, or at least sustained, them. This does not reflect well on the management at all. Another bad update and there'll be clear calls for change. I'd avoid and look elsewhere for similar potential returns at lower risk.

Those speculating below about a takeover this weekend: what are the indicators you have seen?

Volume settled today nearer average. Let's say they make £35m profit this year for a PE valuation of about 4. Whilst another company in the same sector has a PE of about 180 and last reported profit of £25.7m! Both are shorted by about the same % - what is the market thinking?

Retailers and the weather is a funny one: they said cold in March damaged sales; in June/July, they said heat was damaging sales. I wonder what retailers' preferred temperature is?

Removing the Odey position on it's disproportionate size, and the remaining shorts total is about 6.7%. This skewed sentiment is a slight reason to be positive. Odey's track record is one of extremes - either big successes, or more often, big failures. I'm looking for this to be the latter.

Maybe many here are traders. I look longer. Traders and investors crossover since we both want to buy at a reasonable price; or at least not pay too much.

What were people's opinions on the divestment of the KEM JV? They are letting this go for c. $22m, yet the adjusted figures that exclude this asset proportionately decreased by far more. Why are they selling? Is it a sensible move? PDL will be have smaller revenues/earnings going forward, and will then deserve a smaller market cap. The market is pricing this in now. Their update said little of the huge debt which is one of the bigger threats to the company; and nothing of the covenant waivers they have previously enjoyed.

I do see a buy story here, but sentiment - and the rights issue - says a price nearer 40p would be needed to ensure margin of safety.

There is a mix here of speculators and investors accounting for the very different views. All that matters is results - your long term per-annum return. If that's 10% then you're on to something special. Otherwise you're not. Forget the hyperbole of buy-at-this, sell-at-that: who has been making 10%? If they have, they *might* be worth listening to, otherwise, probably not.

There is no communication at all about the plummet in value over the past 8 months. It's like they're hoping we won't notice.

That's Friday's gains wiped out. Thought it was too good to be true.

The way Debenhams has been portrayed by the press over a long term has irritated me: perennially they are described as "struggling", "under pressure", and similar. Failed and failing companies (Mothercare, Carpetright etc) don't seem to attract the same ire.

The criticism might be understandable now, but a look through press archives show that it was the same even when results were decent and consistent. You're right n1shares, it's like they [the press] have got it in for them.

Thanks for clarifying.
Atb

I can't pick the thread from your numerous posts. You're shorting Vodafone heavily; are very bearish about it's prospects and think it will collapse like Carillion; and think the price will be 160p in a few weeks. Is this right?

I read that too. Thought it was a weird comment and could mean anything.

Are you saying brokers are habitually optimistic in their treatment of Vodafone? The books are really hard to understand (to me); as you don't see it ever being worth £3, what do you think it is worth & why?

A yield well clear of 7% indicates a negative outlook. The last dividend was covered by a whisker and a short term reduction is plausible. Longer term, Vodafone looks well set and it has been on my watch-list for a long time.

Sports Direct ahead today too. But not as good as Debs - top of the list left-side! Far from convinced yet there will be similar days ahead but I'll enjoy the respite while it lasts. Think it'll fall back intraday to ~4%.
Atb

Thanks for the explanation.