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The share price fell because of Pendragon reporting cash flow incorrectly in the year end results. Apparently it was circa £33m overstated. As far as i am aware this has now been rectified but obviously it is not good to build trust with shareholders on mistakes in the accounts.
Interesting that Pendragon seemed unaffected by the poor growth and unemployment figures in conjunction with the Eurozone crisis. The share price is fluctuating slightly but a drop off in response to the overall economic crisis hasn't been seen. However I would expect to see Pendragon drifting lower for the next couple of months unless there is any positive news released.
Hard to justify this spread with the complete lack of volume, shouldn't be asking more than 13.75p.
I agree that a strong no opinion is probably the best opinion at the moment because I don't think anybody has got a clue as to what will happen and what best to do about it. I think the reason the price has held up well is because it is a fair price and a lot of long term shareholders will stay in to see what the dividend brings. I need to repay my mortgage so that is just another reason to get out with my profit. My sell opinion just comes from the fact that too many people have been badly bitten by staying in the market too long after a strong rise. The world economy is controlled by politicians, who are mainly lawyers and not accountants, who get input from economists, each of which has a different opinion. I think that the risk is growing rather than receding and until we get some specific plan to promote growth and rescue the basket case countries my appetite for risk is very low. ( The only exception is a speculative high risk using a portion of profits I have earned and not my original capital. )
Just in case somebody puts last year's slump down to the rights issue in fact the rights issue was a positive factor in reducing the level of debt and the 24p SP plus the rights 10p indicated a share price of circa 17p, not the 7p it went down to.
I have thought it was a strong buy for a long time since I think it will end up in the 20's but with all the negative news in the Eurozone, the fact that it fell away badly this time last year and Money week saying they are still worried about the level of debt compared with Lookers I just felt it was sensible to sell and take my 90% profit. Every year I have lost out by staying in the market rather than cashing out so this year I got out while the going was good. My only remaining holdings are Man, for income, and FOGL and RMP for a gamble on striking oil.
Only buys today have been at 13.75 so why are LSE showing ask of 14.25?
There have been no trades in PDG for 2 hours but still the market makers keep the purchase price at 14p. If there is no demand shouldn't the market adjust down?
With the Eurozone problems still weighing on the market and the UK economy in stagnation shares are likely to dip.
Latest broker recommendation from Jefferies is to buy Pendragon with a price target of 20p
I see shareholders voted down the bid to increase bonuses to 150%, hopefully this means a bigger dividend.
Latest on Jaguar F Type - all the petrol heads in the UK will want one of these and with all the investors in the LSE chat rooms who are making good money maybe a lot of us will be able to afford one too before too long. http://www.telegraph.co.uk/finance/newsbysector/transport/9241937/Jaguar-Land-Rover-to-invest-200m-in-F-Type-factory-at-Castle-Bromwich.html
Stratstone have service contracts you can take out which anchor purchasers to the dealership and they also do warranty contracts. All these are paid by direct debit so they have a steady income stream for after sales. They also have competitive tyre sales. Last year and this they are concentrating on increasing second hand car sales so any increase in new car sales will be brilliant. I am hoping they will also be improving their on-line spare parts business. We will also see a reduction in debt interest following the rights issue.
The CEO's 17m shares used to be worth £18.7m, he now has c. 34m shares after investing £1.7m in the rights issue, and at 15p his shareholding is worth c.£5.3m. This means that he has all the incentive in the world to increase shareholder value. I was in the Mayfair showroom today and ordering a Land Rover Evoque today will get you a December delivery and people are still ordering them. The Jaguar F Type out next January has got a healthy order book already so these shares are definitely on the way up with the possibility of a 30p share price within 2 years. It will be interesting to see how much the interim dividend will be.
Within 5 months Pendragon shares have gone up around 100% which makes them one of the best investments in 2012.
I think 20p maybe a bit high but ! was hoping for 18p. All depends on first half figures and dividend unless the EU kills all the UK share prices again.
US analysts have been saying that the best way to invest in the car market is by investing in dealership groups rather than the manufacturers since they can give you coverage of all the manufacturers. Also the average age cars is now well above the norm so they feel that higher demand for cars is inevitable especially with the growing population.
From what I have seen recently the first quarter sales have been pretty good with a lot of second hand car interest and after sales are on target. They are also feeding off the success of Jaguar Land Rover with the new Evoque being very popular and the upcoming F-Type Jaguar likely to beat all kinds of records. Also you have the promise of dividends so maybe we need to get in now before it takes off
Thanks for the input.
The spread betting spread is 0.318 at IG Index but this site is showing a spread of 0.5. Having checked with Barclays Stockbrokers the sale price is 13.55p and the purchase price 13.7p, this is a spread of 0.15. So what is the point of LSE running this site with such inaccurate information?