Member Info for LennyMac

I do agree with your observation that factors that have negative impacts on the FTSE have seemed to affect RBS in a much more pronounced way but this has been an issue for RBS for the whole period of state ownership. RBS hasn't just started dropping significantly when the FTSE falls in the last little while; it has been doing so for the whole period you have described as 'old news'. When the market has fallen since 2008, RBS has fallen faster and by greater amounts than almost everything on the index. Your observation for the year to date has been duplicated in every year to date since 2008.

I take the point about the situation being a longstanding one. However, look at the respective situations of the banks you have listed and the external conditions which currently prevail: The FTSE is down by more than 6% due at least to the factors you've set out because masses of cash have been withdrawn from equities globally. As a result, both BARC and LLOY are down by more or less the same amount. The bigger drop in BARC could possibly be explained by its ongoing implication in a number of international rate rigging scandals. However, both BARC and LLOY have paid dividends this year and as far as I understand, BARC owes nothing to the government and LLOY is now around 20% state- provisioned. This explains why these banks have tracked the FTSE much more closely: their falls are characteristic of market- wide drops in FTSE companies. RBS is an entirely different proposition: no div, close to 80% state ownership, and regardless of whether the circumstance of state ownership is old news, it is still very pertinent to the value of RBS shares. It is not that anything has changed in the last 8 months, but on the contrary, for RBS, practically nothing has changed. Its dire situation relative to the other banks means that when cash is withdrawn from equities generally, it really hemorrhages from RBS.

Although the amount of assistance provided to LLOY was substantial, it was dwarfed by that provided to RBS. Additionally, the size and structure of RBS that has needed to be unwound is also much greater and more expensive than LLOY, the acquisition of HBOS notwithstanding. In short, although they are both banks, their relative circumstances are significantly different and we should neither expect that the sp will behave in the same way, nor that the remedies to correct their respective situations should be the same. If LLOY had been 80- odd percent owned by the state then perhaps the observations that you have made about RBS would have applied equally to LLOY.

Are you really suggesting that the reason that the RBS sp has dropped is because of the narrative coming out of RBS HQ and that a reversal is possible if only the management would say something positive? You'll obviously know that of all the banks bailed out by the UK government, that RBS required the greatest amount of material assistance; that it is the worst performing of the banks should really be no surprise to you. Yet both your recent posts imply disgusted surprise.

That's ok. I learned to laugh about it a long time ago. I am still in RBS for a few reasons: I refuse to sell at a loss, I have faith in the eventual restoration of a div and of an sp upon which I can exit at break- even or better (currently 525p) and I really like coming on to this board for discussion. Unfortunately I lack the courage to put more cash in, in order to bring my average down, so it looks like I am stuck here for a while yet.

The last few months!? Ho ho ho! In 2008 I bought my first tranche of RBS, envigoured by youth and the idea that at 65p, the share price was only going upwards!

How many satellites have they launched? Are they in the same part of the market as Inmarsat? What is it about the startup that is dynamic?

Have a look at my post on Dec 12

I think this share tends to spike suddenly and then falls back gradually over time to a long- run position around 700p. I am not convinced the the sp will hold up for very long. Divs are in May and they pay well, but it is a long way off.

I think you are right about the share buy- back. Fundamentally, buy- backs are a good thing for the holders of shares because reducing the number of shares should drive up the price. I think what we need to know though is why the buy- back occurred. If a company has excess cash, it can do a few things: it can invest in itself through expansion projects etc; it could pay a special dividend or increase the existing dividends and pay the cash to shareholders, or it can buy back shares, increasing the value for existing shareholders. However, a buy- back will also affect other measures of company value such as Earnings per share. In this way, a buy- back could artificially inflate the measurement figures to cover up underlying failings. I don't have any reason to think that this has occurred with ISAT but these thinks deserve some thought.

Jange, are you in ISAT (I assume you are)? Why does this company appeal to you? I have been slowly accumulating ISAT since 2009 because of the divs. I am not trader, just an accumulator, but I'd imagine that these would be ok to trade because of the occasional, substantial flucuations.

I am unsure of the dates for ISAT's div. You have to be holding the shares on the ex div date, whic in my experience tends to be a week or so after the results. Perhaps other posters might actually know the ex div date. I think if you sold today, you would not get the Oct div.

It doesn't look to me like people are selling. This share is clearly bucking the market trend. However, over the longer term ISAT has generally been priced lower than its fundamentals tend to suggest. Look at the profit history over the last three or four years- always quite a handy increase. That being said, there has been a gradual decline in SP over that period, except for periodic spurts like this current one. My question has always been 'Why would people sell this share at all?'

As I understand things, ISAT had an agreement with Lightsquared to provide services for which Lightsquared would make periodic payments in phases. Ltsqd were unable to make the first payment of about $50 mil and were in danger of not making the second. ISAT renegotiated their deal and Ltsqd, having had their credit extended, were able to make that first payment, with the second delayed until 2014. As such, the arrangement is still a viable concern for ISAT albeit over a longer time scale. However, I believe that there are still concerns about the nature of the work that Ltsqd is doing because of some kind of technical issue concerning interference with existing (military?) systems in the US. I don't know whether this has been resolved.

I'd say that this issuing of senior notes is the same as borrowing money. However, profit for the company always looks healthy and despite its undulating sp, the outlook only ever seems to look good. However, I note that the dividend growth forecast for 2013 is much less than it has been over the last few years- perhaps there is some poor news on the horizon? I am going to buy some more of this just before the ex div date.

Inmarsat Plc announced an offering of debt securities through Inmarsat Finance plc, a wholly-owned subsidiary company. Inmarsat is offering approximately USD200 million of 7.375% Senior Notes due 2017. If completed, these new notes will be treated as one class of securities, having the same terms and rights, as Inmarsat's existing 7.375% Senior Notes due 2017 in all respects. The Company intends to use the net proceeds (after fees and expenses) for general corporate purposes. A further announcement will be made to confirm the outcome of the offering.

Mulled Wine, you seem to be fairly clued up on ISAT and I assume you are still in this share. What do you think the reasons for the current share price are? It seems that the company is fairly strong in the fundamentals and the only negative is that anticipated demand for services in the future may be lower. Do you think it could be the case that ISAT has been overvalued for a while and the current sp of around 600p is about right?

This might explain part of the fall: http://www.guardian.co.uk/business/marketforceslive/2011/mar/07/inmarsat-growth-slows Good chance to pick up some more.

Possible shorting. It could be that unilever is one of those companies that money goes into when the volatile stocks like banks are being hammered and money goes out when there are more certain profits to be made in more volatile stocks.

I believe that 1st quarter results are due for Inmarsat today- they had a fantastic last year and have just won another contract for services in Europe. Why would this share price be dropping?