The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Thanks Frankys for posting about the Stobart appointment - I consider this to be very positive as he clearly is privy to far more information than ourselves and must regard what has been achieved positively - Does anyone know how much Invesco paid for their HH stake and if they are sitting on big losses as they have been unable to keep buying to reduce their input cost like smaller investors... Maybe he knows this co is about to be bought out and wont need her much longer
the sheer change in the way this share is trading compared to the depths of the low last year show that something is up with this share and hopefully it will get back to over 4p (my get out price) soon - David, feel for you being in at 6p but actually still think only a small amount of good news will go a long way with this share Knigel, over the last 5 years are you in or out of the money with all your in and outs
Well guys happy New Year, got back earlier in the week and nearly fell off my chair to see a share price above 3p - unfortunately it has subsequently dropped again. What gives me the most confidence is that an individual has added to his SIP shareholding a quite significant quantity of shares - the amount invested suggests that this would not be done without good reason and clearly this investor thinks he knows something - i also believe he lives in the West country and may have contacts in bath or knowledge we are unaware of. - Unfortunately he might also be like myself hedging down his average price. I must say i am a little surprised that there has not been more management change within this company owing to the dire performance to date. the turnaround in the company's fortunes seem to be taking an eternity. despite which, I believe that with its access to £100m of bank finance more than justifies the share price - you simply would not find a bank today prepared to lend those amounts and that itself adds value - For me the biggest danger to this company is a rise in interest rates which would represent a real blow - rather like many householders who have got complacent and used to very low rates - people forget they still need to repay the debt at some stage. My new years resolution - Staying invested here until we see 6p - simply not worth my while selling out under this price as I bought in at too high a price originally - totally understand that the guy who has bought in a 2p will set a lower get out price so all investors will be assessing this share differently - it is also incredibly illiquid and not an easy share to sell. Building up my stake originally took weeks to avoid moving the price. Anyway, hoping for a great 2013 and recovery. Personally not sure why everyone so bearish on December claims, if the weather was wetter, believe me there will have been more accidents than if it were dry - trust me I wrote my car off last year on a wet road, had it been dry my car would still be in one piece - saying that bmw's are notoriously bad in the wet.
Chipf, Thank you for your very insightful comments, only wish I had listened when I first bought into this share. I think your comments about the quality of hiring's as being a major problem is absolutely spot on - a friend of mine crashed a fairly normal car but got through the credit hire co a Merc ML 500 for six months while the insurers argued about responsibility. Absolutely crazy but great business for the credit hirer - should that be able to happen, does it still happen, no idea but I suspect so - so we come back to the infamous debtors and how to value them and the quality - I would like to think that anything unpaid for 189 days would automatically be posted to bad debt and can always be recredited in event of future payment. in my business I know that when a customer has not paid for 6 months our likelihood of repayment falls to 10%. Despite all of which I still believe the share to be undervalued as if the management can re-weak the business model, they could create serious capital appreciation. As for martin Ward being ex public school, cant believe that really has much to do with anything but more worried you do not feel he invokes your confidence - if that is manifest with other employees there is a serious problem. I must say i am surprised with how quickly this share is reclimbing as I wanted to buy more but only at a lower level. My target price is 7p when I will sell off some - otherwise I am a keeper as its simply not worth the effort.
Seems to be a Director of a logistics and direct marketing company in Newbury - wonder what percentage of his SIPP is invested in HH - being in logistics he may know something other than mere mortals scrambling in the dark - I wont invest any more in this co without seeing 1p again - way too much unknown and already way over invested. Just when I thought I had cured my speculative small cap, just took an even bigger punt on a Falklands oil explorer - why oh why!!!
found last years annual report as going through my files and there are 18.26 million of share options issued at an exercise price of .33p but the shares can only be exercised according to tranches: 10% = .75, 30% = 1, all the way up to 1.75 so to make any money the share price needs to reach these levels by April 2019 - so they are seriously underwater and a long way from making them rich. however these guys are pretty well paid, typically 300K + cars, benefits, 20% pensions so more like 400K+ and then the share options if they had not destroyed all the value. I just hope that the 800K mentioned in the recent RNS is not for some new options issued at a lower price. Have to say, to get rich nowadays its easier to network away, keep your head down and slide up to the top of the greasy pole and become a multimillionaire - the days of setting up a business, risking your house are things of the past - far easier to use other people's money. The problem is always the same, you can get somebody extremely good for 200K per year but by paying 3 or 4 guys an extra 200K will it really make a difference and does one get someone better for the job!! old old conundrum. I would far rather pay 200K and the balance in shares to properly motivate someone - that way they wont get rich other than with performance - problem by paying 400K in five years the guy has made 2mill, subject to tax of course. Go and raid Unilever or Proctor and Gamble and get a £200K per year Manager, give him shares and see what he will do - he will work his socks off and be incredibly bright and well educated. As the market cap has shrunk, management should be buying shares or better still forgoing salary in lieu of shares Interesting though, take the co over as a consortium of four investors, fire the Directors and appoint ourselves on £50K salaries, use the savings on salaries to repay the loan used to purchase the stake in the first place. I wonder how many shares one would need to own to be able to do this.....just a thought
Boardman, i am with you, its not clear what these options represent - is it the cumulative amount of already existing options (based on exercisable prices up to 50p (eg 10 million share options exercisable at 50p = 5 mill) or are these new options where the Directors can make massive gains from a lower base - with these smaller co's the Directors can usually get away with murder, only saving grace will be that teh institutions still hold 75% of the shares and they will be clued up on these matters and not allow the Directors to get away with murder, Have the Directors awarded themselves any new share options and at what price?
Lot of talk on ADVN that debtor days falling - this can be effected by two things: 1. Bad debt write downs 2. Shrinking sales Suspect its a combination of both, but other than a real reduction in the number of days sales outstanding (hence financing costs) cant really see why people want to put a positive spin on it. Possibly HH is pursuing less but quality business, rather than chasing volumes as in the past. Without being a Director who knows what is going on but in no way can the selling by Hendersons be regarded as positive as one poster suggests - institutions have an array of buy side analysts paid to analyze these co's and access to info we know nothing about - their internal analysts will have spoken to all the insurers, people involved in the accidents etc re prospects for the business and I for one find it very worrying that two institutions have seen fit to sell at very low prices. So yes, I am becoming a serious bear on this share but plan to do my own research when next in the UK and will visit some dealerships and speak to one of the insurers where I have pretty good high level contacts - not too sure they will be clued up on what is for them an undoubtedly a small part of their businesses.
Given the destruction in NAV I would not buy at current levels, expect a 50% discount minimum to NAV so I am putting this share on a strong sell given the destruction in value to date. However, I need it to go up and will buy more at 1p, otherwise holding steady. the last three weeks has been a vindication of my new strategy of not buying small caps where I have nothing but blood on my hands. What is also concerning is that the Debtors has come down markedly as the business has shrunk and has not really had any impact. On the plus, where can you invest or buy a business for £7mill that has borrowings of £100m - the slightest turn around in trading (certainly cant see this from the latest figures) could see the value shoot - however, if the trend continues one can equally see dreaded receivership looming.... Knigel, you have been promoting HH as long as I have been on here so I am really surprised you have managed to average down your holding to 1.4p or so. Unfortunately I am not in the same boat and need 4.5p to break even. NIGHTMARE
Can someone explain to me how or why 5mill plus is being quoted as the share options for the directors - that would be more than the market cap, not surprising they would not buy shares no incentive when they can "steal" them - think I must be misreading this or does it include options from when the price was 60p - so what is the 800K referring to, is this new options and the new discounted price to "reward the Directors" and make sure they benefit come what may...... Just do not understand why as shareholders one constantly weeks to reward Directors, some who have been witness to the biggest destruction of shareholder value imaginable and make it only ever a win win solution...
People who have never posted suddenly popping up out of the woodwork. Please email me rickroberts189@gmail.com or is cselley1@btinternet.com your email. Well done for attending Knigel - more interested as to why interim FD left, if so what to do, who will replace, and how many grotesque share options have been newly issued
They hardly need an RNS for this -hundreds of similar systems around and from my experience of delivery type software can end up being a bottomless pit - not sure how this sis different to anything we have been using in our vehicles for years and there are many many providers of such equipment. I must say, it is extremely worrying to me that Hendersons have now joined Schroders in selling - the company must be doing presentations to institutions and cant have done a very good job of it. Think this share price if there is no ground breaking news (which I now doubt) is headed back to 1p, at which level I am definitely going to increase my interest and sit back for a few years - think the returns will be greater than investing in my own business - caveat the co goes bust - but once capitalised at 3m the risk reward becomes very interesting and will almost be tempted to launch my own takeover!!
Henderson at one time was a private client stockbroker so their reduction could simply be one investor ducking - if its Henderson Global Investors that's more worrying as they make their own decisions and should know a lot more than we guys. Do not think this AGM is going to reveal anything too much I'm afraid - Directors will want to issue themselves some juicy options before revealing any good news through which they can benefit. Also do not pin too much hopes on Autofocus business - rightly or wrongly the insurance co's remain the customer and you cant start throwing your weight around with your very own clients - very difficult balancing act and a negotiation where the supplier invariably gets screwed. Hopefully insurers will recognize they have helped destroy HH and have a certain amount of integrity - not that it counts for too much these days
In the article Accident Exchange is quoted as having dropped market cap from 300m to 10m (even worse than HH) but now it does not even seem to be quoted - so what has happened to it, seems to still be trading, was it taken private, de-listed, what happened to the shareholders, etc.... seems like a mirror image of HH. It seems to have been even more highly rated than HH at the height of the boom. Right now Credit hire seems to be completely out of favour as it has had a propensity to lose money. If it makes a comeback can some of the lustre return to the sector and see a revaluation. problem seems to be that even without Autofocus, the sector has lost massive amounts of money as an industry where a price war with very little margin for differentiation exists. This has happened in many sectors, eg off shore call centres where being the market leader does not necessarily protect you (I am a long suffering shareholder in the market leader of one such co, where I have just received the last payment form the liquidator) - Came to market at 1, went upto 1.5 within 4 months of floatation to eventually fold with .14 left. Same sort of arguments were given at the height - Market leader with 1500 seats, multinational blue chip clients (Virgin, BAT, Barclaycard, etc). Fortunately I bought low enough and benefitted from currency appreciation to get out without losing my hair - but HH really is a very similar story - lots of co's doing teh same thing fighting hard bu undercutting for market share - problem is as your bigger your overheads increase. In some industries being bigger helps, eg reduced supplier costs, so in HH case I would like to think that the volume of vehicles it buys gives it the economies of scale which makes it "much" more competitive - not quite clear in my mind why car rental co's have not entered the market so guess they do not see it as quite so "attractive", or do not want their own customers to see them providing cars at a massive discount to normal rates.
Thanks for that article re Accident Exchange, interesting indeed - took an ex police officer to unmask a bunch of money grabbing carpet baggers. Must say, becoming more confident and wish I had bought more at 1p - if it keeps going down to that level I am going to buy more and sit for the next couple of years. FD salary wont be a real saving as any replacement will be offered "huge" options as well as a similar salary. Wish I could be at the AGM with you Knigel, would give the Directors a real roasting, particularly why the turnaround is taking so long. Autofocus settlement is nice, but the actual business needs to make money and avoid closure like so many competitors. Is there a real future in credit hire?? Difficult question to answer but I think as long as insurers do not offer it themselves there always will be. If someone crashes into me and they are at fault, I will happily rent a car and reclaim the costs, however, if I am at fault I will make a plan to borrow beg a car from family or friend. Problem with the industry was that the hire co's encouraged "clients" to keep the cars as long as possible - Remember a friend who worked in insurance having a courtesy Range Rover for nearly six months while awaiting to get his car repair approved (which was nothing like a Range Rover) - so of course the insurers are not going to embrace the credit hire co - on the other hand, they should have sorted out liability much quicker - and that is the crux of the industry, if the insurers organize themselves properly, those sort of rentals should never happen
I see I was mistaken and Schroders dropped below 10% in early Oct - one would think in the last week they should have been able to dispose of their full shareholding given the increased volumes - Anyone know the delay between the shares breaching a threshold and the time to make the RNS announcement -0 If they have got out at last it will only be good for the share price going forward as they have single handeldly reduced HH to a penny stock
If this company goes back to 0.8p I am going to go back in and buy a couple of hundred thousand pounds worth of shares and then look to appoint myself to be a Director and will off shore a lot of the overhead and provide a far better service for a fraction of the price. The problem I know is that I would not be able to buy this co for even the 4mill capitalization now as i would never get sufficient shares and it would never be worth the while of the institutions to get out at that price - they would want minimum 8p - so unfortunately, unless the co gets taken over i think I will be keeping my holding for quite some time. Just think about those juicy losses that could be used by a successful bidder to pay no tax for the next few years. They alone would justify the business so not sure how we can get to such a low level
Been looking at this stock for a while now, price hiked cos announcement results would be good and suddenly buying of £100K of shares and some more at start of Feb looks like - maybe a good sign or just some investors as part of their strategy out there will always buy a stock after a positive announcement