Member Info for Libero

I can't say it looks undervalued but it is growing nicely and the new london office may well accelerate that growth further perhaps. May do some research here soon...

Ah I’m not in life insurance. I know I made it sound like I was in my last post but I was actually just saying that I’m in the insurance industry. If I were to be more specific though I’m in non-life, commercial, London market insurance (which includes all sorts of insurance including terrorism, kidnap & ransom, space, cyber, specie, etc) working as a broker at present. In fact, seeing as you’re a lawyer, you might well be interested to hear that my dad is a qualified solicitor and barrister yet he doesn’t practice as either since he’s now an underwriter for After the Event insurance, an unusual type of insurance you’d probably be talented at yourself. You’re right in saying that actuaries are very well paid but I’m not trying to become one. I’m numerical but I’m not at all qualified to even be considered to become an actuary. Not like I mind to be honest because I wouldn’t enjoy being an actuary and there’s more to life than money. I’m not entirely sure what my aim is but the thought of becoming an underwriter is very tempting, reinsurance looks fascinating, and working at Lloyd’s of London is the dream so I’ll try my best to go in that direction. Currently the only time I venture into Lloyd’s is for my weekly Italian lessons but give it time… Yeah I’ve helped convince you to buy into both SYQ and BMN lately, haven’t I, and you’ve made a profit in both so I think you owe me one, my friend! Joking aside it’d be lovely to meet up with you if you come to England sometime so please let me know if you visit. I had a lovely weekend thanks. I was visiting family in Manchester and we all had a lovely time. My grandfather is a fan of the casino so I went with him on Saturday to try my luck. Whilst he made a £45 profit that night, I lost £20 very fast. I was at the 50p roulette table, spent £20 in exchange for 40 chips, did all I could to improve my chance of winning something, but somehow did not win a thing. The chances of not winning anything were so incredibly slim that I realised I had no luck whatsoever. So I kept the remaining £10 firmly in my pocket and retired for the night, concluding that I’d much rather do my gambling on the stock market!! Hope you had a good weekend yourself. Kind regards, Dan

Hi Andy, I'm delighted that you're first ever post on LSE has been on this bb. If you had to sell then fair enough you had to sell but massive kudos to you for buying back in at 105p because 1) it was the right move 2) it took balls to do that considering you were originally in at the 70s I presume. I personally would have struggled to that myself so well done to you mate, and welcome aboard of course :D Kind regards, Dan

The live price has now hit 120p so the share price / valuation has doubled in just 33 days, and there's so much more to come!

emailed their subsribers at 2.16pm today and you can see the immediate effect. Quite impressive how much influence they have considering their record is rather patchy IMO

That truly is a superb write up. Think I may well make a long term investment here sometime soon...

...the SYQ ship. We've almost double bagged since 5th February. I know that most of us bought in at 77p ish (like me): our day will come and, with some patience, we'll triple bag too. And if you're not on board the ship then why not buy in now before we rise any higher? We've passed the 100p mark already, sure, but the 200p mark is still ahead of us and where we'll end up sooner or later providing the BOD keep all the Telcos sweet etc. We're in a sector that the stock market applies sky high multiples to, we operate in both the M and I of the fast growing MINT territories, and SYQ is well run & growing so fast we're currently undervalued. Climb on board :D

3rd paragraph of part 1: "That’s standard and it is possible..." should read "That's standard and that is why it is possible..."

Lastly have you checked out El1te’s most recent article on Clean Air Power? He rates it a buy and I’m surprised he has to a certain extent because usually he does oodles of research and the rating is heavily influenced by the fundamentals. Yet here he has said the fundamentals don’t look great because CAP is loss making etc but it has such potential that he rates it a buy, saying just one RNS could catapult it to a much higher valuation. As usual it is well worth a read and I’m very interested to hear your thoughts. If I don’t speak to you again today – have a good weekend! Kind regards, Dan

Re: Chesnera’s name - I wondered where it originated myself because it seems like a very odd name for a life insurer in my opinion. The use of ‘m’ instead of ‘million’ doesn’t put me off at all. It’s when companies purely use EBITDA in their results that I don’t like because it excludes so much I think they’re trying to hide something. If they use adjusted-EBITDA (something they define themselves) that’s even worse in my eyes, and never fails to put me off. I got the impression Chesnera is primarily a life insurer but, like all insurers, their income comes not just from the underwriting operation but also their investments. That’s standard and it is possible for insurers’ claims + operating expenses can exceed the premiums they charge in one particular underwriting year and yet they’ll still be in profit – it is because their investments more than make up for the underwriting loss. And, due to the gap in time between insurers receiving premium and paying claims, it makes sense for them to invest in a very conservative way (see Warren Buffett’s latest letter explaining this better than I am). Re: embedded value, I know a fair bit about insurance (because I’m in the industry myself) but I’m totally unfamiliar with the term. I’ll have to look at that too. Haha I like that saying, and yes I like the directorate to eat their own cooking too so that is a negative to be honest. CSN clearly requires further study from me too because some of their key RNSs are complicated to understand. I’ll try and study it when I can. I’m at work all day, I am revising for upcoming exams, and I’m busy this weekend visiting family in Manchester but I’ll try my best. I saw that you did but only by clicking on your name and reading through your posts (across all bbs). I actually did reply to that so if you were to do the same and click on your post to me you’ll find it. I never realised Ben Graham was born in England so thanks for that information, and I’ll happily join you in a toast to potentially the best investors of all time. SYQ is doing very well indeed with a new high today, and many more to come! You’re right to say it has an excellent niche and you’re right to hold. I’ve done the research there and it’s going to pay off spectacularly I feel :D It is funny you mention IQE because I’ve been looking at that recently. I really like the look of it and that is even before entertaining the idea of Intel buying them up! The one downside I see is that the stock seems to be stuck in sub 25p territory – there’s no momentum. ...

is the live price and yet another new high :D And yeah this is a very quiet and polite bb and that's how I like it. It won't last by the time the herd arrive so enjoy it whilst it lasts (although the herd will drive the SP up through the roof of course so swings and roundabouts)! Good luck all, Dan

Good day Rob, Thank you. I did notice that SYQ and BMN outperformed on Monday so thank you. SYQ has gone very quiet now though which, on the one hand, is good news because the RSI was very high yet – on the other – I wonder if the share price will ease off further. I’ll have to wait and see and, either way, I won’t be selling. How you’ve expressed how poor conclusions can arrive from share evaluation incredibly well there. I love the use of the word ‘predilections’ in particular because I literally never hear it. Looking into shares is very time-consuming because there’s so many opportunities out there (number of shares), and so much you have to do to get even a basic understanding of your typical individual stock. And it is all too easy to make mistakes. My latest stock I’m very excited about is CSN (Chesnera) and I think you’ll love it because it is the sort of stock under a rock you like mate. I’ll explain briefly: Based on the 2012 FY results the fundamentals don’t look great. But then if you dig a little deeper and look at the 2013 HY and Q3 results you’ll realise the 2013 FY results will be immensely better. 2013 has been a turnaround year for CSN and I don’t think the market has cottoned on yet which is why it is trading at a bargain price right now. Admittedly I haven’t spent long looking at CSN so there might be something I’ve missed but, at present, I’ve got a conservative target of 600p for the company (which is currently trading at 350p). Re: MOS – it’s great that UBS are buying in. Although I do wonder whether they’re going to day trade it based on the fact Commerzbank were buying BMN shortly after the 10p to 3-4p drop and everyone get incredibly excited. Only to then realise the Germans then sold for a quick profit. Thanks for letting me know though. My fingers are crossed. FOX sounds interesting. I shall look into it when I get the chance because your summary has certainly piqued my interest. All the best to you. Kind regards, Dan

Jolly, I had wondered where you had got to! I thought that perhaps the French sun had got to you! Glad you had a jolly good time, pal, and welcome back :)

The PE ratio is 14.32 at the moment which again isn't that attractive considering the insurance sector's average PE ratio is about 13 BUT of course that is all based on 2012 results. It seems as though EBIT will be roughly £43.7m (and that is not including Direct Line Life's contribution). This will mean EBIT would be 121% up on before and if EPS were to rise by as big a margin (to 54p) the PE ratio would drop to just 6.45. If CSN were then to re-rate to the industry average of 13 it would mean the company would be valued at roughly 702p a share which would mean this is an absurdly undervalued stock. I feel like I must have miscalculated / missed something here so please correct me if I'm wrong but, right now, I am hugely attracted to CSN due to the huge margin of safety I currently see!

Based on the 2012 year and a market cap of £400m, the EV/EBIT ratio is roughly 11.7. This isn’t too attractive BUT 2013 was clearly a turnaround year for the company from looking at the HY and Q3 results. The Q3 results showed that in the first 9 months of the financial year profit before tax was £32.8m. Assuming things remained constant for the remaining quarter of the year we can expect FY profits to be roughly £43.7m. Assuming everything stays constant in terms of the superb Cash to Liabilities ratio and Enterprise Value, the EV/EBIT is roughly 231m / 43.7m = 5.29 which is incredibly good! This doesn’t take account the Direct Line acquisition which I haven’t properly looked into but, even if it shoved the EV/EBIT up to 7 lets say, CHES looks a very undervalued company after the turnaround year they’ve just gone through.

For those who haven't yet seen it... http://www.shareprophets.advfn.com/views/3344/2014-tip-of-the-year-number-3-lombard-risk-management-at-a-135p-offer

No I don’t know Dibs61 and, in all honesty, I’ve never had any interest in the gold sector. Having said that the recent trouble re: Ukraine, bodes well for the sector as a whole so don’t listen to me. I just avoid sectors that are too risky in my eyes with the one exception you know about (BMN). Re: MLC – it looks like I need to do more research because analysts rate it as a hold, which makes me wonder whether the really good results weren’t the result of more to come but actually a one-off occurrence. Yeah I know what you mean – it’s a big part the reason why I’ve never bothered with shares on the main market myself. But, at the same time, my risk aversion has made me start looking at small to mid cap companies (that are a bit above your usual AIM share). Re: ACD – thank you for looking into this so thoroughly (more thoroughly than me) and sharing your views. The idea of paying two layers of management fees really puts me off, and you’re right about it trading close to its NAV. There’s certainly better opportunities out there, I just think I fell for the allure of an under the radar stock in the process of a share buy back but nevermind. Hope you had a great weekend. Kind regards, Dan

As you can see from the red,we spoke too soon. This also proves to me that the RSI is still a very useful tool for when a share enters overbought territory (above 70) because, even when we broke 100p - a level I thought was perhaps too significant - we couldn't defy what the RSI reading was telling me (like I briefly thought earlier). Lesson learnt.

Old Mutual (LON:OML) On Friday, Old Mutual reported preliminary results for FY2013 ended 31st December 2013. Total revenue declined 1.4% to £19.8bn, while pre-tax profits improved 10.6% to £1.53bn owing to lower expenses. Adjusted operating profit rose 15% to £1.6bn and return on equity improved 60 basis points to 13.6% (constant currency basis). Adjusted operating earnings per share climbed 21% to 18.4p (constant currency). Funds under management (FUM) rose 19% to £294bn with positive market movements contributing £34.3bn. Old Mutual announced acquisition of Intrinsic Financial Services Limited in the UK, having a network of 3,000 advisers, to boost distribution for its Old Mutual Wealth business. The company plans to go public with its US Asset Management arm this year. In 2013, Old Mutual added 280,000 customers to the Mass Foundation segment and further 529,000 to the retail banking unit of majority owned bank, Nedbank. Old Mutual also progressed towards the integration of its recently purchased Provident Life Assurance, Ghana into the group. Full year dividend of 8.1p was 16% higher from last year. The stock closed up 5.9%. Our view: Barring the impact of a weakening rand, Old Mutual delivered a resilient full year performance on the strength of its emerging market business . The announced initial public offering (IPO) for Old Mutual’s asset management business in the US would bolster the unit’s expansion significantly. A majority stake in Nedbank has given Old Mutual an access to the Mozambique market through the former’s 36.4% stake in Banco Unico. However, a significant devaluation in the currency of South Africa, from where the company derives majority of its business, severely hit its financials. Moreover, the recent introduction of stringent regulatory norms for the UK insurance sector added to the woes. However, with upcoming synergy and cross-selling opportunities from a close integration of Old Mutual, Nedbank and Mutual & Federal, prospective gains from strategic acquisitions and a rapidly expanding customer base, Old Mutual is well poised for further growth. We upgrade the stock rating to a Buy.

On Friday, William Hill released its full year results for the 52 weeks ended 31st December 2013. Revenue increased 18% on a 52-week basis to £1.5bn after adjustment for the introduction of Machine Games Duty, with retail revenues up 10% to £907m and online net revenues rising 12% to £446.3m. However, profit before tax lowered 6% to £257m owing to higher finance and acquisition costs. Adjusted basic EPS was up 7% to 28.8p. Sportsbook continued to perform strongly, with net revenues up 29%, benefitting from a massive 33% growth in amounts wagered and a slight improvement in gross margins to 8.1%. Gaming net revenue remained flat at £233.4m. Amount wagered in Online Sportsbook climbed 33% on 52 week basis, with 99% surge in Mobile Sportsbook amounts wagered. Mobile Sportsbook turnover jumped 175% over the year. Retail net revenue benefitted from solid performance from gaming machines (revenues up 20%). In April 2013, the group successfully acquired remaining 29% stake in William Hill Online from Playtech. During the year, William Hill successfully launched williamhill.it in Italy and williamhill.es in Spain. With the completion of acquisition of Sportingbet and tomwaterhouse.com, the group consolidated its position in Australia. For the current trading in the seven weeks to 18th February 2014, net revenues were up 5%, with flat online net revenues and 4% drop in retail revenues. The Board approved a final dividend of 7.9p per share, taking the full year dividend to 11.6p, an increase of 12% y-o-y. William Hill plans to cut costs by £15-20m in 2015 to counter the impact of UK consumption tax starting from December 2014. The stock gained 6.1% in Friday’s trade. Our view: William Hill continues to draw strength from its online gambling business, with its mobile segment gaining further traction. Even the retail business registered decent revenue numbers for the year. William Hill’s performance has been encouraging and ahead of its close competitors like Ladbrokes. A weak trading performance in 2014 owing to a poor show during football results, with high number of odds-on favourites winning, seems to be a one-off event. Over the last few years, William Hill has established a stronger foothold in the overseas and online markets. The imminent consumption tax, to be introduced by the year end, and other regulations would have its impact spread evenly across the entire gambling industry. From company-specific perspective, with upside opportunities from the upcoming football matches and the 2014 World Cup, the overall prospects still look strong. We upgrade stock rating to a Buy.