Member Info for KGinvest

GI: with due respect, this is not the first company giving out dividends, that is what happens, always.. google price wouldn't even show you it has gone down at all and it should just open around 117.. where it ends is totally another matter but i wouldn't expect it to cross 120 through the day w/o any news to prop it up

LG: you worry a lot mate, let your conviction in the stock calm your nerves, otherwise you will become too frustrated and exit your position when this goes a bit higher.. as i mentioned before, this is not the first time that the fundamentals of the company have been divorced from its share price.. everything in the market went up but NEX went down.. it could be a concerted effort by institutions to keep this dragged down so they can slowly top it up..

You may not hear anything regarding any good news this week, i think they are in the blackout period now before the trading update which should come through in 2 weeks time which should prop this up..

Re dividend, the share price will open -5p down and may actually go down or up depending on the day tomorrow.

Did anyone take a snapshot of market screener major shareholding percentages last month? The one on there now is as of end-March I think and it would be good to compare what we had in previous quarter. JP Morgan has definitely gone up as validated by the RNS but there could be more changes worthy of tracking..

JG, it has been testing the patience for sure and it may seem to be stuck like this for 2 years but that's not the case right? We were in the 250s one year ago.. it is a game of patience and as I said detailed out in the post last week, folks who are going to pour into the share price on daily basis and try to find a signal (II buying or shorts dropping) are going to sell out and eventually miss out on bigger gains.. no one can tell when NEX will find it's momentum and if someone claims to know, they are kidding themselves. All I can tell looking at the fundamentals and perhaps reassure you is that this will double from this price point within 2 years . For any patient investor, it would be a great return.

Putting money where my mouth is, I have sold out of all my profitable investments now and bulked up on NEX so NEX is now a huge chunk in my portfolio. I have never been this concentrated in one stock but it does reflect my confidence.

DYOR
KG

LG: it's not a bad sign tbh.. there's still too many weaker hands holding this stock; these moves will drive them to sell away on small rises, transferring the ownership to more bullish institutions and IIs.

Shorts are another fascination of this forum so sharing this small observation which is counter intuitive to conventional wisdom which says increases in short positions have a direct and negative impact on share price and vice-versa.

A big rise in short interest didn't adversely impact the share price
Sep 2021: Short positions: 0.59%, NEX share price: 268p
May 2022: Short positions: 2.37%, NEX share price: 272p

Same story the other way around, short positioning kept going down, conventional wisdom says price go up but instead the share price crashed into half
May 2022: Short positions: 2.37%, NEX share: 272p
Dec 2022: Short positions: 1.91%, NEX share: 130p

What's the takeaway then: is information about short positioning completely irrelevant? NO, it is good indicator to identify problem stocks which have very high short interest (over 5%) that can indicate something nasty brewing but otherwise it is just traders sitting in financial institutions betting on the direction of a stock and just like us peeps they get it wrong many times (as shown above).. by far the two most relevant indicators are macro environment and company fundamentals.. so please take with a big pinch of salt when you see shorts going up or down, more often than not they don't indicate a trend..

DYOR & GLA
KG

@Pokerchips

True that hostile takeover bids sometimes may not go very far but they do have couple of desirable effects. It's a direct message to the board that they need to bring their A game because let's be honest, they have been sleeping behind the wheel for a while now. It is every board's mandate to focus on shareholder returns and they have failed miserably (no profit making company has had this level of battering in last 6 months). A major stakeholder like European Express could very well give their tacit approval and then it becomes extremely difficult for management to play the 'undervalued' card.. most of these 'hostile' offers I refer to may not appear hostile.. to me any offer w/o discussion with management is hostile by its very nature and is laid out to force management's hand. I also dont think that they got any "silly" offers, they are obliged by law to disclose any takeover approaches, however silly they may be.

As many have noticed, there have been so many off book transactions recently which don't move the price but things are brewing under the current, I have no doubt about that.

KG

I agree it doesn't make sense from a long term perspective but remember companies are driven by individuals and individuals are driven by personal motives.. there's a strong motive for the share price to be above 185 personally for the top brass but much more importantly the share price need to get back to a sensible level to fend off hostile takeover bids.. if that doesn't happen soon enough, the management will get under extreme pressure from top shareholders (if they are not already).

Folks, here's my take on NEX, thoughts are welcome

The TLDR is that IMO NEX is one of the most undervalued firms in FTSE250 and is very likely to atleast double my investment from current levels within 2 years. However, it would also likely test patience and is not a good place to be in if you are here for a quick buck.

I will start by saying that NEX the company is not NEX the stock; both are separate. The stock price of a firm, in an ideal world, should mirror the company performance but many a times it doesn't and NEX is a prime example. Over the years I have learnt to be more patient to identify market distortions such as NEX and stick with them for longer for a much better return. I will not go into financials / book value to prove that this stock is undervalued - many posters have already done that to a great effect. But instead would like to talk about what I see as the three most likely outcomes over the next 9-12 months:

1. Partial or full buyout offer (10% probability): I know some posters (including me) are keeping fingers crossed that a takeover offer is imminent and that will be a cure-all for LT holders but it remains imo a low probability event and we should treat it as such. This obviously unlocks the true value much faster than any other outcome but I wouldn't hold my breath. If it comes to fruition, we may see NEX hitting 250+ even with a low ball offer with potential to go higher up. Any takeover offer will most likely be rejected (given NEX history), so any short/medium term investors should bail out at this stage but for LTH, it's not the end game. I would personally offload half of my holdings if this happens and take some profit.

2. NA/UK business hive-off (30% probability): With £400m becoming due later this year and high interest rates likely to persist, it is a realistic possibility that NEX mgmt decides this is a better route to pay off debt when it becomes due. This becomes a highly probable outcome if share price pressure continues. Any such news would take the price to 200+ within days. For this event to unfold, these discussions would have started already at board level and they may announce something by end of Q2 or start of Q3. If no news by then, it would be fair to assume that we are be headed for outcome 3.

3. The Grind (55% probabability): NEX continues as is, there are news of new contract wins (which is inevitable), quarterly positive trading updates, new target prices from analysts etc etc should slowly boost the share price up but it will be a slow grind, likely to be atleast 9-12 months as we go through a recession (or worse depression). The likely trigger for a big uptick would be any indication of interest rate cuts by BOE - the rate cuts would be fast and push pension funds to cut their bond exposure and add to equities. This stock would easily cross 300+ within 3-6 months from the time the rate cuts start so we are likely talking about Q3/Q4 2014.

DYOR and GLA

KG

Thanks @Locky82 ; not all pension funds would have exited their positions; I think there was a RNS of GM pension fund few days ago reducing their position but there could be many more who didn't have to do RNS because of threshold requirements. All we know is that large investors have been net sellers in Q4 and potentially Q1 this year. We should have a greater insight later this month when shareholder position gets updated for Q1 on various websites but in short low pension fund participation = under valued NEX stock all other things being equal (which they aren't always).

Hello all, been a long time reader of your comments so thought I got to sign up and share my thoughts too.. I have read some very good points on this forum and most investors are respectful here (compared to some other forums) but there's just so much misinformation/conjecture that any new investors don't stand a chance. Hope to share some of my learnings as an investor (for 30+ years) and how it applies to NEX; constructive criticism most welcome as learning never stops.. I have got a few points to share later as to where i think this stock is headed but just on this short selling point, I think we give it much more relevance than it deserves.. these are very low levels of shorts all things considered (contrast this with something like carvana which has somewhere close to 50% shorts). If you have some time, please read this article on FT about pension funds having to sell equities which in my mind is a much bigger problem for stocks like NEX

https://www.ft.com/content/eee78bf3-9cae-4211-875c-cde85ca19e5d

just getting started
KG