The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
BUZZ-UK's Senior drops after Barclays downgrade
** British engineering firm Senior's shares down 4.5% at 163.8p; top loser on London's midcap index
** Barclays cuts price target on stock to 168p from 205p and rating to "equal-weight" from "overweight"
** Says U.S. Federal Aviation Administration's oversight for Boeing and Spirit AeroSystems' manufacturing may slow 737 MAX production rates for suppliers, leading SNR to potentially guide below 2024 EPS and free cash flow consensus
** Stock gained 41.9% in 2023
Iraq Iran Libya Syria are all about purloining the resources of another country and Russia is no different. Strikes me that WW3 is starting in the Middle East - look at what America has deployed that. But it will not be good outcome for the West and Iran will come to the aid of Hezbollah, Syria being attacked will drag in Russia, and that is enough to involve China. It is alas the West, or a particular in the West seeking these resources and these wars.
Yes I agree that in this time of capital becoming more expensive, the resilient will eat the more exposed.
And I agree that as it is difficult to know when to buy in in anticipation of a more certain long term outperformance, now is probably a good time.
At least, I hope I don't live to eat my words.
Cannot understand this lacklustre SP.
Thoughts anyone?
No explanation
My recent notes:
25/7 -
* Barclays raises target price to 305p from 300p
* HSBC raises target price to 305p from 270p
* Peel Hunt cuts to hold from add
* Peel Hunt raises target price to 290p from 260p
18/7 - everything is perfect so time to sell
18/7 - https://uk.finance.yahoo.com/news/direction-travel-good-stock-car-050000306.html?.tsrc=rss
7% SP drop not explained anywhere I've seen at this stage, but presumably the burning South has destroyed holidays which are a principal source of income on this price-comparison site.
We've waited a long time for this stock to come good, it is a real shame. Having said that, still up on the week thanks to earnings update. But going forward, this is one of those tragedies that it is not evident the world will recover from :-(
Looking on the bright side, what companies benefit from climate change and where would you move to as CC looks like it is advancing faster than imagined.
179 joking naa !!
Focus on the company, its peers, the industry, sector and market.
Focus on the fundamentals, technicals and sentiment.
You won't have any time for criticising fellow readers and you'l get some good results.
Be constructive please!
The meme-stock bubble burst caused 20% of IG’s clients to leave, mostly in the recently acquired US business, Tastytrade. Most of those who left were the inexperienced novices and IG has been able to replace them to some extent with more experienced traders who trade frequently, making larger trades.
Although revenue increased 10%, this came also from interest on unreinvested cash, where from trading would be heathier.
Alas, the 10% extra revenue didn’t reach the bottom line as operating costs increased by 25%, due mainly to higher staff costs and foreign exchange movements. That left earnings flat - which isn’t that bad given the loss of so those meme-traders.
Looking ahead, recessions can be good for active traders - IG retains its medium-term growth targets of 5-7% for its core OTC business and 25-30% for Tastytrade and Spectrum Markets.
As a dividend stock, IGG offers a 6% yield, 2.16 cover, 46% payout and has never reduced its divi instead growing it at 6.44% average annual over 5-yrs and 7.06% over 10.
Debt to equity if 15%.
IGG has just appointed Adam Wheelwright as Its New Chief Technology Officer. The CEO June Felix has been a steady buyer over the last 12 months and has £119k of stock.
It is currently trading on a PE of 7.7 (its peers 18.6 - because of lower current expected earnings growth - but there is a major marketing campaign due H2. According to my DCF, IGG is 70% undervalued at £7.34 versus £24.59 fair value; or £23.09 if I value using DDF ie on divis (my methods...take care!). The seven analysts covering IGG are not really in agreement but on average give a one-yr share price expectation of £10.77 ie a 48% uplift.
It was the St Valentimes Day massacre. In the week that followed, 2022, the SP almost halved. And it's been there more or less ever since.
It only neds to prove its ITVX, or break up into parts selling off its Studios...but as you say peachy it is paralysed and this could be the work of the beast, playing billiards with the SP.
Over the time I ve held ITV I've noticed inexplicable SP movements. You'll say 80% of movements are inexplicable, OK, but ITV I see from time to time the shadow of the beast as it wafts across the floor of the exchange, digitally speaking.
And so it was yesterday and volume showed a five-fold increase. Is that a suddent distributive awakening from the public at large? Is it an institutional buyer? Is it the beast?
I think the beast. Can anyone unmask him or her?
To continue ... the story so far ... We can now understand the macroeconomics and changing regulations at work in the insurance industry generally, but still there is opaqueness - some analysts advise the clouds will lift September-time. Six month investment strategy then...
The CEO made a special divi payout of 100m, when he should have been building his buffers post covid; and secondly, he thought lowering premiums would take market share enough to keep up his EPS. He was wrong on both counts and he's gone as a result.
DLG has a new advanced-pricing model. Not sure how it works but it is being trialed in car insurance then rolled out to other product segments.
There is a threat to the traditionally-run insurance industry, weighed down with heavy admin costs that come out of the premiums. That threat is a new business model, P2P, from insurance brokerage firms like Bought By Many, Friendsurance, Guevara, InsPeer and PeerCover. These new online Brorkers underwrite their own policies rather going to the Carriers.
The problem is that until now, there has been a fundamental conflict of interests between the insurers, with their massive reserves sufficient to cover the worst of rainy days, and the insured, protected by heavy regulation but always interested in bending their claims.
But what if you could accurately segment the customers by risk profile - I imagine this part of the new advanced-pricing software - but also by social affiliation (friends, family, colleagues, clubs...), then pool the premiums in a transparent way and offer discounts to pool memebers, giving them an incentive to good behaviour? This is what we call a network effect.
Further, investors in the business, who provide the capital reserve, could now invest in any of the groups, and an organisation such as Uvamo would cover any claims that exceeded the total amount in the pool.
This would mean the insurers and the insured are one and the same group. The whole business to be managed on line by AI algos. Still a dream? See how a new outfit, 'Lemonade' (finding sweet solutions to sour problems) is a new organisation challenging the way that insurance companies work "with a peer-to-peer business model fueled by self-serve technology."
DLG interim results August seem too early to bring good news.
But a new CEO can bring clarity over the summer on the regulatory front (releasing insurance funds for equity investment?) and recalibrate DLG's new pricing model to support P2P insurance.
If this happens, we can expect sector-performance for next March's results and probably a great deal more.
With a poor view on the Fundamentals, I cling to a Technical trading analysis that suggests buy mid 140s, sell mid-180s, over next six months, for a SP reward of 25%.
Good luck everyone !
Thoughts?
Obvious to most that financiql stocks are in trouble becuse their quality balance sheets are getting a clawing from angry interest rate tigers. It is a bit facile to say liabilities don't match assets, yet it is true that long-dated guilts may have to be sold at below par to meet demands from depositors. Would you call this a liquidity issue? Or is it LDI? - Liability-Driven Investment strategy misfired?
I pity the Fed - hugely qualified, high IQs the highest, know their history and have their own massive experience, but cannot manage a multi-factorial world, so many moving parts, always get it wrong.
What did they do? For these regional banks, they will take on these good-quality bonds at par, so at zero cost theses banks can honour withdrawals, no more bank runs.
And yet ...
Obvious to most that financiql stocks are in trouble becuse their quality balance sheets are getting a clawing from angry interest rate tigers. It is a bit facile to say liabilities don't match assets, yet it is true that long-dated guilts may have to be sold at below par to meet demands from depositors. Would you call this a liquidity issue? Or is it LDI? - Liability-Driven Investment strategy misfired?
I pity the Fed - hugely qualified, high IQs the highest, know their history and have their own massive experience, but cannot manage a multi-factorial world, so many moving parts, always get it wrong.
What did they do? For these regional banks, they will take on these good-quality bonds at par, so at zero cost theses banks can honour withdrawals, no more bank runs.
And yet ...
===
Anyway, about DLG...
We can now understand the macroeconomics and changing regulations at work in the insurance industry generally, but still there is opaqueness, from this obscurity some analysts are advising the clouds will only lift September-time. So this is a reasonable investsment time-frame. Six months.
Somut fishy goin' on here. Hmmmm.
Any corporate financialist with corporate bonds on his books had better take a second look because int rate hikes are back as inflation is not reponding.
Why did SC Bank go under? Not all the partying and LGBTQ+++ avocay - it was because 90% of its account customers were startups and they were having increasing touble meeting loan repayments and had to draw from their account. CAme a time the bank was facing a potential run on its reserves. It's reserves were largely safely invested in long-dated govt bonds ... which of course they'd havae to sell a a haircut since int rate rises.
LDI was the same story.
Any company - any bank - with exposure to corporate bonds must face repricing of risk. MArk-to-market every three months may not apply, but if customers want their money, they will be forced to sell.
Look at these wipeouts of the giants. LGEN down to 240 GBp !!!
What did they do for SV Bank yesterday? The Fed (the BFTP) has placed a guarantee on the value of regional banks' govt bonds AT PAR. Meaning, no haircuts and so no bank runs.
Will they have to extend this to corporate bonds? Do bears **** in woods? Is the pope a catholic?
Is this a bailout? Well it is pretty extraordinary govt action!
Willthe BoE adopt this policy? Do they want to avoid similar bank runs?
Now take another look at the LGEN share price - shafted by exposure to corporate bonds where risk has been repriced...and what happens if the gov.tguarantees the value of those bonds?
What is your opinion - I have a lot of LGEN and would be interested to hear your advice : buy more, hold, or fold?