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Stimulus programmes are creating a false economy and false markets given elections in USA. But how long can they continue to propel the markets artificially. My guess is that US markets are already over inflated completely ignoring the situation on the ground. I expect market correction to happen sooner or later this month.
Few things in HOC’s favour right now:
• Low interest or perceived negative interest rates
• Currencies devaluing across the world with currency printing (dollar reducing in value)
• Bond values reducing
• Volatility in the markets increasing – Don’t think the market reflects the situation on the ground – DOW going above pre-covid can’t last too long IMO
• A market crash is inevitable – it’s a question of when IMO - this will drive money towards precious metals
Have seen the H1 presentation (few points of note)
• Cash position of $162m
• Returning to full production by end of August – FY20 guidance will be released shortly IMO
• Lots of green field exploration sites in H2 20
• Net debt reduced from $351m in 2015 to $58m as at the end of June 20
Supported by market sentiment for precious metals and the growing footprint and production capacity will generate good shareholder returns in the medium to long term in my opinion. As always DYOR.
Agreed MRahman. My logic is the same to hold. Markets are currently pricing in the Armageddon scenario for Capita. Sooner or later correction is inevitable and i suspect the downside risk here is limited with upside potential being high. 40p looks a reasonable target IMO in the next 4-8 weeks.
As always, PI's will lost out. Have seen numerous times that PIs panic and sell and in few weeks share price will go much higher. The downside risk here is much less compared to most other companies. Switch off your computer and return after 3-4 months.
Excerpts from HL:
Capita warned on Thursday that first-half revenue will be around 10% lower than last year, partly due to the Covid-19 pandemic.
The outsourcer said 5% of the decline relates to the coronavirus outbreak, while a small drop in trading was expected in the first half due to contract losses reported in 2019.
The first quarter was "broadly in line with expectations", it said, with contract wins, extensions and renewals such as Irish Water, Teachers Pensions and Ministry of Justice Electronic Monitoring.
Capita said there had been a resilient performance in the majority of its operations from long-term contracts, with a stable government and blue-chip customer base.
The company has delivered cost savings of at least £45m in the first half and expects "significant" further cost savings to be delivered in the second.
It also said that the disposal of the Eclipse business and the planned disposal of the education software services division will strengthen the balance sheet.
Chief executive Jon Lewis said: "We have implemented cost and cash preservation initiatives to mitigate the financial impact of Covid-19, while liquidity remains strong, and cash generation from operations has improved significantly compared with 2019."
So expecting a 10% revenue drop compared to last year and 5% due to COVID19 ( which i think is reasonable), suspect this is already factored in the price IMO.
Surprised to see this price action...
Hopefully this will help..
https://www.pgatour.com/company/2020/08/03/betmgm-pga-tour-official-betting-operator.html
On IG, shorts have reduced from 7% last week to only 4% today. Tide is changing clearly.
https://www.ig.com/uk/shares/markets-shares/boohoocom-plc
Sentiment is clearly against this stock right now with whole media running articles on sweatshops in Leicester. Its better to stay on the sidelines and let the dust settle. I suspect other big funds are dropping the share hence we are seeing major falls.
They did report in the last update that Ecommerce has doubled each week during the period before the update. Also wholesale operations continued which is good news and they are available on next, boohoo, Zalando and Asos websites which will continue to generate revenues. Also another stat I have noticed is free float is only 30 percent I.e 24 million with the remaining 70 percent held by iI’s and founders. Just a whiff of good news I’m sure this will fly. We should also realise that all IIs brought the shares at much higher price than most of the Pis at the current price. Average PE for this sector is at 10 and we are at 3.5 so there is ample opportunity for re rating for patient holders.