The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
The stock market is a great mechanism to transfer wealth from the impatient to the patient....
I think that the appointment of the new Chief Exec was a very shrewd choice - his track record and background are ideal for a company such as Capita that needs to re-invent itself if it is to have a future of any sort.
There's absolutely no doubt that the company has to implement a program of brutal cost cutting , significantly enhance it's service proposition with AI at it's core, and be much more selective about the contracts that it goes after , with perhaps fewer but more profitable contracts being the focus as the company align's itself with a new proposition.
As others have pointed out Adolfo Hernandez has the luxury of a clean sheet - he reported on what we already new and is the hangover from the previous leadership , so the markets may cut him some slack - for now at least.
I found this :
According to the FCA’s discussion paper DP23/4, issuers will be required to hold assets backing stablecoins in a statutory trust in favor of underlying customers.This means that the value of the stablecoins must be matched by physical assets or currency to maintain stability and trust in the value of the stablecoins.
Additionally, the FCA’s proposed approach to regulating fiat-backed stablecoins aims to ensure that backing assets are sufficient to back all issued stablecoins in circulation, with any change in stablecoin supply being matched by a corresponding adjustment in backing assets. This is part of the broader regulatory framework to ensure the safety and stability of digital currencies and their use in the financial system.
I have with reasonable success bought in the dips and sold on the rise in the last few months. I am now building up my holding again, this time with the intention of holding for the longer term, as I get a sense that positive progress is starting to be made. We will get a clearer view in a couple of months and if my gut feeling is right then I expect the price increases to sustain and then break out.
I have just been catching up on the comments that were made yesterday in response to my comment about PR.
Good PR is worth it’s weight in gold (or crypto) and the essence of good PR is having a “strong story to tell” in a compelling way that is directed at your target group and the results of which can be measured. Car companies (for example) have been creating and promoting brand awareness with their CUSTOMERS for decades.
At the core of business that GST is building, is a B2B platform. Right now the business will be heavily engaged in networking a target list of clients. Our Lord will be out there “wining and dining” them, meeting for drinks and making presentations with the sole intent of creating awareness, selling them our USP’s and briefing them on what’s in the development pipe line – all with the intent of turning them into fee paying customers. This (outside of the regulatory developments) is the single most important activity that the company can commit it’s limited resources to. From this activity revenues will grow, profits will develop – and the share price will rise. Some may not recognise this activity as Public Relations activity, but that is what it is.
On the internet you will find articles about GST news (i.e. acquisitions etc) and even a video interview with GST directors – none of which have helped to sustain the share price. The wording of the articles was almost identical so it’s safe to assume that GST circulated Press Releases – whether the recipients chose to use them is another matter. PR is not as simple as chucking content out in a scatter gun approach and hoping that some of it sticks. GST is still a small company (for now) and it has to make the very best use of what resources it has.
As ever I welcome other people’s opinions.
1. GST is building a “new” company from the ground up. This takes TIME.
2. It is run by a board of Entrepreneurs. Entrepreneurship is all about solving problems and coming up with solutions to overcome barriers. This also take time, especially if there are issues which may be / are out of their control. The BOD has thus far demonstrated how it is going about doing this (pillars / Stablecoin / FCA etc, etc) and has kept shareholders informed when they have something to say that MATTERS.
3. Ultimately the current share price tells us only what the market thinks the company is worth now if you wish to by shares in it TODAY. Your research and the resulting gut feel this gives you will help you decide whether you wish to take the risk of making an investment for the LONG TERM.
4. I can’t ever recall investors complaining about making money, but these boards are overrun by people complaining that they have lost money (on paper at least) because the share price has not kept pace with their expectations, or it is not happening quickly enough / or the BOD is incompetent etc . Investing involves a degree of patience and taking risks, which you mitigate by doing research BEFORE investing (see point 3). If you don’t have the patience, are not prepared to accept that you can and may lose money and / or don’t do your research before investing, then perhaps sticking your hard-earned cash in a fixed rate ISA paying 4.6% is better suited to you. IF INVESTING WAS EASY WE WOULD ALL BE MILLIONAIRES.
5. The BOD are only obliged to inform shareholders of something that might materially affect the share price. Ie. Placings, acquisitions, changes in shareholdings etc. The BOD has done this without fail.
6. PR for the sake of PR serves no useful purpose and as stipulated above if the BOD wants to issue some information that is materially important ( ie which affects the share price) they are bound to issue an RNS.
My long held view ( since i started investing in this share over 12 months ago) is that it will take a decent set of financials to really kick start the share price. This is something that the BOD can ( and is ) deliver.
Acquisitions are great but in the absence of financials they seem only to have only a short term positive effect on the price.
FCA approval / Stable coins will of course have a significant impact on the share price - but these are factors are outside of the BOD's control, so i prefer to discount them for the time being , especially as there is no guaranteed timescale ( yes i know what the FCA / government ministers are saying about this ).
So as it stands i have put my alarm clock onto wake me up in late July.
While we wait for news, I have been reading up on the advantages / benefits that owning a majority stake in Easy Send gives GST.
At the time the news of the option to buy was first announced I thought it was a really savvy move by the board to acquire a company which although based in Great Britain is still deemed to be in the EU ( for matters related to trade and finance)
In summary the benefits are as follows:
1. SEPA Transfers: For transfers within the EU, we can use the Single European Payments Area (SEPA) network, which is designed to simplify bank transfers denominated in euro. SEPA transfers are typically free or subject to a nominal fee, which can be beneficial for both the company and its customers.
2. Brexit Considerations: Despite Brexit, financial companies in Northern Ireland, have continued to adhere to EU legislation that allows fee-free transfers over the SEPA network to euro-adopting countries.
3. Cost-Effectiveness: Transferring money internationally used to be costly, but with the advent of services like SEPA, the costs have been significantly reduced. This can make Northern Irish companies competitive in the EU market.
4. Regulatory Compliance: Companies based in Northern Ireland, are regulated by stringent security and licensing requirements, ensuring that transactions are trusted and have some protection within the EU.
Overall, the combination of low fees, regulatory compliance, and access to efficient transfer networks like SEPA can provide significant benefits to companies like ES operating within the EU. This plus most of the rest of the world adds up to goldmine (as previously pointed out by others) for us. If this strand of GST doesn’t excite you, nothing will.
I found some small change down the back of my sofa last night so i picked up a small slice this morning - every little helps, especially with the news that we believe is coming.
A few thoughts :
1. Everybody is entitled to express their opinion - even if i disagree with it.
2. It's not obligatory to respond if you disagree - in fact you can say far more by not replying.
3. Winning an argument wont make you rich.
3. If any one is crazy enough to make investments based on statements made by others on these boards, they really shouldn't be investing, so do your own research.
5. Never invest more than you can afford to and do not plan your future life based on your investments. You may be disappointed - the stock market is a games of snakes and ladders, so you need to accept that things do not always go according to plan.
6. The current state of affairs has not shaken my belief in this company, and as i keep saying that anyone actually researching this company will know that the company is well run and last time we looked financially stable. No one should under-estimate though the scale and complexity of what they are attempting to build. They are a small fish (presently) in a very large sea - they are having to be very nimble to acquire the resources to achieve their goals.
They are doing so without piling debt onto the balance sheet. The price though is the use of placings to fund infrastructure growth.
Right now we are in a void waiting for and anticipating the year end results. To break up the tedium we have the excitement of a possible/ likely acquisition. When / if this happens the price will spike... ..and then slide back. It will -in my opinion - be the year end results that bake in any increase in the value of the SP. I had been anticipating a relatively modest profit, but after the recent update I am not so conservative about them now. In the meantime just chill people, we can't change what's happening, but we can change how we handle it.
As one or two others have previously pointed out, Easysend was originally announced as an option to buy. This is / was subject to due diligence and and then negotiating terms / FCA approval. Although no time limit was indicated options normally have a time limit placed on them. The plan may have therefore been to timetable the acquisition for the new financial year and defer all related costs so that these would not "detract" from the final year results.
Warren Buffet when asked about how he responds to a dip in an investment share price said something to the effect that if the company is stable and well run, he sees it as an opportunity to buy even more shares. Things have turned out well for him.
Some people on this board are letting their emotions cloud their judgement. If they can't then as i said previously investing is not for them.
Investing is not without risk so if you are going to put your hard-earned cash into a company’s shares, you need to be able to handle moments like this. If you can’t then it’s not for you.
You should also remember that you are buying a chunk of a company not just a share price. I have steadily built up a decent holding in GST over the last 12 months. I remind myself (in the absence of news) that GST's balance sheet is healthy and has no debt and that it uses placings to fund acquisitions and not running costs. These are strong indicators of a sound, financially healthy and well-run company.
The share price will recover with the confirmation of Easysend , the announcement of further acquisitions plus year end results all to come in the near future. My confidence remains unshaken.
It's hardly surprising that the SP has retreated given the volume placed. I see his as a simple short term reaction to a necessary move by the BOD to raise funds for further acquisitions, and nothing more. Yes, perhaps the BOD should / could have managed the timing of the two RNS better / differently, but would anyone prefer that the company is saddled with debt to fund further acquisitions ?
With the results due in the next few weeks will see how this plays out very soon. I think that they already have target acquisitions in mind , and possibly already lined up. If I was to guess I would expect that they will be buying companies with established customer bases so they can escalate growth.
Today went exactly as I thought after reading the RNS. I have felt ever since I started investing in this company 12 months ago, that for the share to break out it needed to post a profit. Today reinforced that view. The RNS is extremely encouraging and my belief in the company is unshaken. The end of year results will be the moment everything changes.
Good Spot, NO FEAR. I note that the contract is not a fixed price for it's term and is subject TO RPI
Listed companies are required by law to notify without delay major new developments that may affect their business if the development may lead to a substantial share price movement. Issuers must also notify without delay information concerning a change in financial condition, performance or expectation of performance if the change would be likely to lead to a substantial share price movement.
I hope this helps some understand why and when a listed company is required to issue an RNS.
No one ever knows what the "bottom" is until afterwards when the price rallies and then sustains its increase. I have absolutely no idea what the bottom price is or whether we have reached it yet. I have managed twice in the recent past to buy in the dip and sell on the rise, and got out 24 hours before the results were published last week. I will at some point buy back in once there is evidence that the price has rebounded - but i am mindful of the comments that i made yesterday about being in the last chance saloon. I genuinely hope though that the new CEO can turn this company around - it really should be a success.