Member Info for Pinkers

"True value"… is Balfour Beatty doing a 'Tesco'? Balfour Beatty is now a one of the most "obvious" targets in the construction & support industry. Indeed, the whole sector is ripe for consolidation. Just look at the Times equity prices columns and one cannot help but notice the sheer length of the two listings (Construction & Property and Professional & Support Services). Combined, and the cross-overs are only too evident, this would be the longest column in the paper, easily exceeding Natural Resources. More on this subject: http://pinkerspost.com/?p=312

Sir Martin Sorrell, the proud owner of an OAP bus pass, is in great shape and has "no plans to retire". Cheers to that! How do we know? Simple: Because the company he built from scratch, too, is, according to Paul Richard of Numis, in "excellent health". In an article for Pinkers Post, Antonia Oprita, summarises: "Sure, CEOs can keep telling themselves that they are worth the huge sums they receive. Some may even believe it. But the truth is, most of them are not. And the sooner shareholders realise this, the better." One would agree. There are, however, a few exceptions: One is Mike Ashley of Sports Direct and the other is Sir Martin Sorrell of WPP. Both deserve every penny they can get their hands on: Shareholder activism is all very well… but investors would be well advised not to bite the hand that feeds them. Sir Martin, long may you reign! More on this subject: http://pinkerspost.com/?p=135

According to Carillion, the revised takeover approach for Balfour Beatty offers a 36 per cent premium. Yet this sweetener depends on the 600m new shares you would create having the same market price – 337p each – as 430m now in issue. But it looks as if services group Carillion is actually offering a premium of around 12 per cent to the price for Balfour shares before merger discussions became public. This consists of a preferential share of the merged group – increased from 56.5 to 58.3 per cent on Tuesday – and an 8.5p dividend. Baflour Beatty is right to label Carillion's approach as "opportunistic". Balfour is a late cycle business and, right now, it is at the bottom of the cycle. Still, Carillion have a brilliant management team and they are probably right on the synergies that could be achieved. A merger at this stage is unthinkable, leaving Carillion with the option to go hostile and pay for it. Whether or not the company has the financial firepower for such a sizeable acquisition, however, is highly questionable. Shareholders In BBY should sit tight and hold out for at least 350p a share. The construction & support sector is overcrowded and consolidation is overdue. Pinkers expects a wave of M&A in the next couple of years. Furthermore, as opposed to highly valued (overvalued?) consumer stocks, this sector is dirt cheap, offering healthy yields at low P/E ratios, even when measured on CAPE. So, what next? BBC1 failed. But in the age of 'channel hopping', there are more options. What about BBC2, for Balfour Beatty Costain, that is? Rather than returning money to shareholders from the impending sale of management consultancy Parsons Brinckerhoff for some £700m, Balfour could have a tilt at Costain, capitalised at a mere £270m. A nice idea… but even better: BBC3! The combined market cap of Carillion and Costain happens to equal that of Balfour Beatty: Roughly £1.6m. Now, this really would be a 'merger of equals' rather than the BBC1 reverse takeover. And the synergies would be enormous. A 'no-brainer', really. However… getting the three parties around a table would be a tall order, indeed. However, one thing is for sure: All three companies are now 'in play' and change is in the air. Investors in all three companies should hold their nerve… and sit still! Watch this space! More on this subject: Entries 25th and 31st July (please scroll down): http://pinkerspost.com/category/in_and_out/

Balfour is, indeed, the weaker party but now Carillion has really shot itself in the foot - if not amputated it! This, of course, is only the beginning of what promises to be an entertaining soap! Balfour s/p reaction reflects the increased possibility of other bidders entering the fray. The construction & support sector is overcrowded and consolidation is overdue. Pinkers expects a wave of M&A in the next couple of years. Furthermore, as opposed to highly valued (overvalued?) consumer stocks, this sector is dirt cheap, offering healthy yields at low P/E ratios, even when measured on CAPE. 'Undone!': http://pinkerspost.com/inout.php

Balfour is, indeed, the weaker party but now Carillion has really shot itself in the foot - if not amputated it! This, of course, is only the beginning of what promises to be an entertaining soap! Balfour s/p reaction reflects the increased possibility of other bidders entering the fray. The construction & support sector is overcrowded and consolidation is overdue. Pinkers expects a wave of M&A in the next couple of years. Furthermore, as opposed to highly valued (overvalued?) consumer stocks, this sector is dirt cheap, offering healthy yields at low P/E ratios, even when measured on CAPE. 'Undone!': http://pinkerspost.com/inout.php

It was an exceptionally bold and, indeed, courageous move to appoint the Creative Officer CEO. A first for a FTSE 100. Understandably, investors are nervous; they would almost certainly have preferred a 'bean counter'. However, this decision, albeit risky, could well turn out to be one of the most visionary appointments in the world of retail: Burberry, like all fashion companies, has to constantly 're-invent' itself in order to stay relevant. After all, what's IN fashion, will invariably go OUT of fashion. The jury is out but this could prove to be a very smart move, indeed.  Still, the truly exorbitant pay package is jumping the gun: Whereas Sir Martin Sorrell has proved his mettle over many years at the helm of a company he built from scratch, Mr Bailey has no track record whatsoever. Investors are right to revolt! Agitated activists: http://pinkerspost.com/post.php

In a recent interview, retail consultant Richard Hyman put his finger on the spot: "The market today is different in every conceivable way to that associated with the golden ages." And the only M&S manager who appears to have faced up to this harsh reality is Jan Heere, outgoing Director of International Operations, who decided to leave the sinking ship before it's too late. It is, of course, not Bolland's fault. It's nobody's fault. The food may be nice (Pinkers loves the Cauliflower Cheese!) but the truth is less palatable: The business model itself is redundant. Selling baked beans alongside ladies knickers? Let's face it…: The simple truth of the matter is nobody in their right mind would invent M&S in today's retail environment and not even a magician could turn this business around. It's almost surprising it wasn't wiped out with the last dinosaurs 66 million years ago. Buy, Sell, or Hold? Here the answer: http://pinkerspost.com/inout.php

Pinkers Post covered IMG 11 Nov 2013 (pls scroll down): http://pinkerspost.com/inout.php - after months of volatility, the s/p is back to the same level. Like any tech stock, a high degree of volatility is to be expected. Really, it's pot luck and all depends on staying ahead of the curve on RND etc… ARM has dominated the field for years but, despite being frequently dismissed by the pundits, IMG appears to be holding up quite well as a niche player. Perhaps doing better than it lets on? Pinkers likes the board's style of communication: a little on the understated side of things… 250p represents a good entry level but not a stock for widows & orphans.

Disagree. MacDonalds is an international brand and junk food may be naughty… but it's nice! Valerie prospered as a 'niche chain' up-market operator. And yes, cake, too, is naughty… but I am afraid this CAKE tastes of cardboard. In the early days, it didn't. It was the best in London, by far! The private equity owners have committed the cardinal sin by destroying its original DNA and sacrificing quality for higher profit margins: asset stripping in its purest form. Furthermore, from a purely entrepreneurial point of view: it over expanded too rapidly and this will eventually show up at the bottom line. Valerie will go on for a while, become ubiquitous and probably implode. Its only salvation will be to shrink again and rediscover its roots. In the meantime, Maison Bertaux will offer refuge to the true cake connoisseur!

Pinkers would like to add: This is HONEST guidance rather than a nasty profit warning. Bioquell is a healthy company but has been affected, like many others in the same sector, from the general downturn. Pinkers will add to its holding but want to see the s/p stabilise above 100p, first. Longer term, it's definitely a BUY and rather vulnerable to takeover… http://pinkerspost.com/index.php

WHY? Well: a profit warning!

As much as Pinkers admires Luke Johnson, a brilliant entrepreneur and true lateral thinker, what he has done to good old Val is a great shame: turned it into a 'Mini-MacDonalds'. Just DON'T have this 'CAKE' and eat it: http://pinkerspost.com/inout.php

In the light of the battle for Penguin and the proposed 'merger' with Random House, today's revelation in the Sunday Times that Mr Murdoch is gatecrashing the party with a 1bio cash offer for Penguin, Bloomsbury looks especially vulnerable. With a market cap of c.100mio a 'minnow' by comparison but certainly a nice 'bolt-on' for one of the larger publishing houses. Bloomsbury's strong balance sheet and successful diversification post Potter, makes it an ideal take-over target. Watch this space...

Simple answer: investors sitting on their bum awaiting news on possible bid. There will not be any significant movement until announcement and/or another party (bidder!) entering the fray. Just be patient! You may well have to wait until 3 October 5pm when deadline expires. Fingers crossed LVMH et al get whiff of this as it would be a tragedy having to sell at this depressed level.

Pinkers VERY MUCH in agreement: the value here is in the BRAND and it's worth a hell of a lot more than current 15p. 25-30p MINIMUM! Even at that level it would represent only small change for both the big fashion houses and private equity. The potential of the brand is enormous! One of the very few quintessentially 'Brit-Brands' still up for grabs!

Mike: a finely balanced comment. Pinkers could not agree more. Frankly, it's a bit like machine-gun fire: a few (inevitable!) hits outnumbered by many stray bullets.

Mayo... fair enough and good on you for being so fair! Have to agree: he IS a very experienced analyst and has a long history of successfully combining charts & fundamentals. However, his track record hasn't been so brilliant recently... but then there really are only very few people who have done well. Merryn Somerset Web (FT) has been consistent and right in her gloomy predictions... perhaps easy to be gloomy when things simply ARE gloomy? As for Renold, I think it's a no-brainer: BUY!!! As much as I can at this level. Do we NEED Facebook? Do we NEED industrial chains? I would say the latter is rather more relevant to keep the world moving... and the economic cycle WILL turn... it always does - it's the law: the law of nature!

... reveals that he has lost faith in Renold and sold his holding at a loss. Surely a BUY signal coming from Schwartz who is almost as bad Goldman Sachs... His last big tip was flybe at 180p... BUY when Schwartz says sell, SELL when Schwartz says buy.

Bottomed out at 23p, in line with brokers' recommendations and directors' buys. Makes complete sense. Pinkers buying.

... buy because they are right! This is a VERY good entry level and will not present itself again in a hurry!