Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
PMI surveys, whilst not hard data, is a very good leading indicator of where that part of the economy is trending. However, IMO, the key driver for the negative print (below 50) on the PMI, is the prices paid index, which is running pretty hot at over 60, versus a circa 55 expected print.
Personally, I really like today's Mfg PMI print. Along with a marked slowdown in another leading indicator JOLTS data from this morning, its just showing that the job market isn't running as hot as the BLS' labour data indicates. And that should temper inflation expectations and you can see crude oil selling off big as a consequence - OK a big build when a small draw was expected in today's EIA weekly report didn't help. But that's all good for inflation (both CPI and Fed preferred PCE should show this up in June when May's data is reported ) to moderate and BOE to act quicker than the Fed and set the UK economy off on a better (upward) trajectory. All of this points to a rewarding long play in CPI. IMO. Also, I'd keep shorting BT to make more money.
And on that note, I'll pass to Savage to keep commenting (daily, nay hourly) at leisure on how dire the UK economic outlook is and how it's all uber sh*itty for Capita. Maybe, maybe - but looking out past the next few weeks to the update and the H1 release, we should have more clarity on how CPI's business and FCF outlook is trending - after all, that's all the market really cares about.
Good lord, the FUDsters are in full swing here. Give the man (AH) a bit of time to work though his cost cuts and a broader corporate strategy and lay it out to us in about 6 weeks time. In the meantime if it hangs around here or goes a bit lower with the broader market, so be it. We had a recession in 2023 and private sector spend was in the dumps - the recovery will come around in 2024 and IMO, we will benefit from a spend recovery in the Experience sector, albeit modestly in 2024. With a much lower cost base and small debt repayments due this year and next, I'm not sure why this talk of administration makes sense. Oh I forgot, FUDsters do what they do best to rankle nervous holders on here.. Doh!!!
Looking at the big picture, it isn't what MSFT or GOOG deliver this quarter or the next that'll make a difference to the broader market - keep an eye out for those 10Y Treasury yields. Core PCE in Q1 was hot and juxtapose that against a lower than forecast Q1 GDP growth rate, and there are rumblings of Stagflation in the US economy.
I don't think it will play out that way and S4 will be a beneficiary of a bounce-back in the agency ad spend this year and an even better ramp up in 2025.
Meta ran up too hard and any disaapointment on either growth or cost control was all that was needed for it to cool off a bit.
Ad spending cooling off a bit at the likes of Meta/Google may just be good for Ad Agency spend - we'll soon be in H2 and plenty to look forward to for S4.
Agree with that, Verney. It's so easy to pull a stock price down here on the LSE - as soon as buying dissipates, the shorts can easily have their way on no volume.
This is where we need to be in the medium term - Over 80% of our business is across the pond anyway.
https://www.bloomberg.com/news/articles/2024-04-25/indivior-confirms-plan-to-switch-listing-from-london-to-new-york?
Nothing surprises me about the LSE. It's very easy to take a SP down on no news and with very low volume, and very difficult to move the SP up unless its backed by large volumes. However, I'm not complaining about the head we're dealt with - it's just where we are listed. Until MS decides to move the listing to the NYSE or NASDAQ, we'll left holding on to that element of undervaluation.
"I will make this promise. If I get the opportunity to make some money and get out of here I will mention it on this board, wish everyone luck and never de-ramp. Only time I would ever be on here is if I'm invested"
@Trisor - that's really good and that's always my approach. If I sell, I do it and I don't go around posting negative and FUD posts soon after I've sold. NoClue is a different kettle of fish though and he's very predictable and this has been proven many times over than I can count. I can promise you this much - he'll be back in a few days deramping CPI as he thinks it will go lower if he de-ramps on here. It's a bit like AimLess's positional posts.
I'd be massively surprised if he doesn't deramp, but I don't expect to be.
That's right there, Terry. He's making the right noises, finally for us long suffering Shareholders, but it'll all boil down to how he can execute that strategy. Based on some of the messages on this board from ex-Capita employees, new cuts have begun and we'll no doubt hear more about this in the June update.
I'm under no illusion that if AH can't pull this off, then CPI will probably head towards administration in the coming years and as it stands, the market is already saying that we're half-way there - unjustifiably so, IMO.
I don't think he even needs to be a messiah. All we ever needed was a CEO who acknowledged how bloated the cost structure was and that CPI would never generate the required FCF if no changes were made. Woke JL kept going for as long as he did having a Kumbaya with everyone other shareholders. A diligent CEO like AH only understood and acknowledged the unsustainability of such an approach and is now embarking to cut costs big time. I, at least, am not privy to what may be coming in the strategic review in a couple of months' time, but showing cost cuts and a pathway to clear FCF from 2025 onwards would be key I'd imagine. Unlike JL, he did make a couple of market purchases soon after he could and given it's make or break time for CPI, I'd like to think he's focused on delivering this sustained cash returns message to the market. Maybe a new CFO annoucement beckons in the update?
Nothing that NoClue does should ever be surprise. If he's now sold (again) after pumping this for a few weeks now, why is that ever a surprise? Anyways, moving past his pointless shenanigans, we're stuck in a range and I took the opportunity to add more today. My holdings here is the highest its ever been, obviously not to value wise. It's been a painful few months, but with AH at the end, I'm confident he can pull off what the hapless JL couldn't.
I'll add more if it hangs around these levels OR goes down!!!
Except that the circa 15% to 20% downmove from the recent highs is on no real volume. That tells me all you need to know about why S4 should delist from the LSE and move to NYSE, or at least seek a primary listing in the US.
That is an old price target and possibly the research note too. Barclays were at 270p last year when the price was higher, but all that sellside ever do is just chase price targets up or down as the SP moves on the market.
https://research-centre.barclays.co.uk/shares/s4-capital/broker-views/