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The headline growth is extremely impressive but the "pro forma" adjustments reduce the growth figures considerable, albeit they are still good. The only apparent negative point seems to be the reduction in margin. That said, I, for one, do not really understand what the pro forma adjustments are and particularly why they have such a large impact on the figures. Without a clearer exlanation of what this all means, I suspect the shares will remain in the doldrums during these uncertain times. Can anyone shed any light on the pro forma adjustments?
Let us see how long he is chancellor for. With the way things are going, who knows who will be in which post by the end of the day.
From IC 16 June 22.
FUNDS
The tech stocks I'm buying amid the downturn
Polar Capital's Ben Rogoff tells Mary McDougall why he's dipping back into rapid growth companies despite recession risk
Mary McDougall
Polar Capital Technology Trust has reduced exposure to ecommerce and consumer businesses
It has added to software companies
The trust has been underperforming its benchmark because it has a lower relative rating to large US tech stocks
Tech investors' luck had to run out at some point. After sensational gains in 2020 and throughout most of 2021, the first half of this year is proving a very different story. Few people have been monitoring the sell-off as closely as Ben Rogoff, manager of Polar Capital Technology Trust (PCT), which has suffered a share price fall of a third since the start of the year, albeit it still had assets of £2.9bn as of 13 June.
Rogoff, who has been investing in technology for 26 years, has seen his share of bear markets, from the bursting of the dotcom bubble at the turn of the century to the financial crisis in 2008. “When the tech sector drops it can be quite painful,” says Rogoff, adding that each one he has endured has been very different. “This one is really about inflation and the loss of the 'Fed put'”. He describes Federal Reserve policy as such because it has, in effect, behaved like a put option contract by supporting markets with interest rate cuts and quantitative easing in recent decades.
The key question on investors minds is how much further the tech sell-off has to go. Rogoff recently noted to Investors' Chronicle that over half of companies' in the Nasdaq index have fallen by 50 per cent from their peaks, and said valuations of many companies are now materially much more attractive than they were last November.
“Calling bottoms and trying to work out if this is the time to buy is really just part of that conversation about risk and reward,” he says. “Last year we were worried about certain facets of the market – things like special purpose acquisition companies, ultra long duration investing and the fashion towards concentration in portfolios”.
Since then, there has been a sizeable derating of some of these assets and Rogoff says that he is just starting to dip his toes back into the water.
On a scale of one to 10, where one is the most bearish he could imagine being and 10 the most bullish, he says that he’s now at “around seven or eight”. And companies are a sort of “coincident indicator” because when things turn down in the economy companies don’t see it in advance but rather as it happens. He adds that the overwhelming sense from his colleagues attending company conferences is that “things are still OK”.
It is not just the SMT that has dropped. Look at all the European markets today. Until the interest rate peak has been reached, or passed, I think we will see many more dips along a very bumpy road.
Good point, nbe22
The drop in asset value since the end of 2021 has been sobering but the unit price drop has been even greater owing, presumably, to investors losing faith in the fund managers. When the asset value per unit starts to rise, as surely it must at some time, hopefully the discount to asset value will reduce and the rate of unit price rise will accelerate. Will this result in a virtuous circle? It should do and we can but hope.
The results are certainly promising but there is still a loss of 0.4c per share, albeit this is much less than last year. One may expect a significant rerating once (when?) the loss becomes a profit. Until then, the 8% share price rise at the time of writing seems to me to be a good reaction.
The Hyland news article states that revenue might drop by 15% next year. The RNS states that modelling of a 15% drop has been undertaken to verify that borrowing facilities are adequate. The two things are very different. Perhaps the drop in share price today reflects the news article rather than the RNS.
I have sympathy with your view, ShearClass, but I do not necessarily think that the two methods are mutually exclusive. Chartists are, as I understand it, essentially looking for momentum while you and I are looking for value. We all know that stockmarkets can be erratic, to the benefit of momentum traders, but eventually value will be recognised. One just pays one's money and takes one's choice in how to trade. For me, I will stick to value and risk losing the short term rewards (and thumping losses if one gets it wrong) that chartist trading may bring.
With the planned end of free lateral flow tests in the UK in April, the need for a Kromek style test system to detect any new variants of Covid must surely be enhanced considerably. Hopefully Kromek will mobilise all available resources to bring this message rapidly and loudly to Government and the media.
A bit more on Falk and Wilbert. https://www.google.com/amp/s/insideclimatenews.org/news/07112021/lithium-mining-thacker-pass-nevada-electric-vehicles-climate/%3famp
It predates Mosquito Squadron’s article but you may find it worth a read.
Wikipedia, https://en.m.wikipedia.org/wiki/Thacker_Pass_Lithium_Mine contains a lot of information about whether or not Thacker Pass will be granted permission to proceed. It seems to me that the jury is still out.
Perkaps BATM themselves will comment on the short attack, or get their lawyers to do it for them? That should steady the market, one hopes.
The factors you have identified are certainly relevant, Pernix. Here is some background reading, if you are interested. https://www.ft.com/content/d307ab6e-57b3-4007-9188-ec9717c60023
Another potential risk is China invading Taiwan at the same time that Russia invades Ukraine. Potential wars on two fronts at the same time, with or without intervention by the USA, will probably destabilise the markets still further. As if Covid was not enough of a problem. We live in interesting times!
Perhaps it would have been better if the Board had quantified the financial loss, rather than said it was not material. An exact figure is probably not needed but "less that A$ X would have been useful. Investors could then judge for themselves how material the sum is.
My view of the detectors was that they would be used in the walk through scanners that are similar to the usual metal/explosive detectors (a glass box with siding doors where one adopts a specified pose) that are in common use at airports. If the detector sniffs what it thinks is a virus, the person is taken to one side for a proper test. If it does not detect anything the person is free to proceed. Quick simple screening. Not fool proof but much better than nothing and suitable for fairly quick mass screening.