The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
I don’t doubt this one is heading for 350 to 400 within 6 months. The question for me though is will it go to 200 to 250 first. It’s surprising that it hasn’t lost too much ground following the 210 issue.
Why do investors chronicle rate FGP as a HOLD, but the other bussers as SELL. I would of thought SGC and NEX would be the most attractive stocks in the sector due to, amongst other things, staycations. I quite like GOG as well, but don’t like the German rail contract.
Is that good or bad? I am hoping this stock would trade upwards as we approach results day. Mainly due to how well this company has done lately, I think people will be expecting a strong set of results.
Bought in here recently because it looks undervalued when considering net asset value. Also repeatedly recommended as BUY by investors chronicle.
What impact is today’s budget likely to have for JUST? I understand that this stock is partly dependant on UK property prices.
Can’t see it personally. It’s had a very good run and I suspect today was largely driven by Rishi’s reopening cash giveaway. To be fair, I’ve said that a few times over the past week though and it keeps surprising me and going up further.
As usual where government grants are concerned, the headline is misleading and the devil is in the detail. Still a bit of free money is not to be sniffed at though.
Which is one of the reasons why I think the company might seriously consider raising money through a rights issue.
It isn’t just about the fact they’re currently in breach of banking covenants, it’s about the ability of the new CEO to implement a future strategy for growth.
It’s obvious they need to focus more on digital going forward. In my opinion they should be looking at doing expensive prime time TV and radio advertising. This should significantly increase awareness of their online offering and that will then start to eat into the market share of rivals such as moonpig. Combine this with paying down long term debt and closing unprofitable stores and you’re onto a winner.
“The banks have provided further waivers in respect of anticipated covenant breaches through until 31 March 2021, taking account of the Company's cash flow projections, subject to certain conditions. We are engaged on a plan to refinance the Company, and will provide a further update in due course.”
“subject to certain conditions” and “we are engaged on a plan to refinance the company”. I will be surprised if there isn’t a RI here.
Putting the banking covenants aside, there are other good reasons why the new CEO might want to raise money through equity. This company potentially has a very bright future, but the new gaffer needs time and some money to implement his new strategy.
Unlike a lot of other companies, they haven’t yet been down the equity route and they can pitch it to shareholders as something along the lines of 50% dilution now for a 5 or 10 bag in a couple of years time.
I missed the boat on this one unfortunately, so it sounds like a case of sour grapes. However, I still think there is the possibility of a RI here. Especially now the market cap has increased. They still haven’t confirmed what the situation is with regards to the banking covenants. Must be an announcement on this imminent surely.
With the 2019 final dividend being reinstated back in July, and the 2020 final payout increasing by 4 per cent to 14.3p per share, BAE has now grown its annual dividend since 2003, and analysts believe that the payout will continue to grow over the next few years.
Jefferies analyst Sandy Morris believes fears over US defence spending have been overdone and “[t]he market just needs to stop looking for trouble, in our view.” Further clarity will come when the US defence budget for 2022 is unveiled later this year, although at present, BAE’s US book-to-bill ratio is above one. With the shares offering a dividend yield of almost 5 per cent, they’re worth holding onto as an income play. Hold.
BAE Systems set to march forward in 2021
Investors Chronicle, 25th February 2021
With the impact of the Covid-19 pandemic weighted towards the first half of the year, BAE Systems (BA.) managed to keep its underlying operating profit steady in 2020, at £2.1bn. The aerospace and defence company saw disruption to supply chains and ship repair activities in its US platforms and services (P&S) business, but this was offset by strong performances in its air and maritime divisions.
Looking to 2021, BAE is guiding that its underlying operating profit will rise by more than a tenth at constant currencies amid a recovery in P&S, and a full year contribution from the Airborne Tactical Radios and Military Global Positioning System businesses acquired from Raytheon (US:RTX) last year. The group is anticipating that its revenue will grow by between 5 to 7 per cent, with a £45bn order backlog providing visibility over 80 per cent of expected sales.
Despite the stability afforded by long-term government contracts, investors have been wary of buying into defence stocks over the past year amid concerns that defence budgets will be squeezed post-pandemic. But with countries still facing the same long-term geopolitical threats and tensions in some regions – such as the Asia Pacific – ramping up, there are reasons to believe that military spending will remain robust. Indeed, in response to an increasingly emboldened China, Australia has increased its 10-year investment in its defence capabilities from AUD$195bn (£108bn) to AUD$270bn – something that bodes well for BAE as Australia’s leading defence contractor.
Closer to home, the UK unveiled a surprise £16.5bn boost to its defence budget in November, although there is still uncertainty over the outcome of the integrated review of the UK’s security, defence, development and foreign policy. We are likely to see a shift from traditional to more modern fighting capabilities such as space and cyber, which could leave BAE exposed with its focus on expensive platforms such as combat vehicles. Still, the group has sizeable businesses relating to electronic and cyber warfare, and Boris Johnson has promised a “renaissance of British shipbuilding”, reiterating plans to add 8 Type 26 frigates and 5 general purpose Type 31 frigates to the UK’s naval fleet. The government had already contracted BAE to build the first three Type 26 ships back in 2017, and the group is also providing gun systems for the Type 31.
The biggest threat is perhaps across the Atlantic, where there are worries that Joe Biden could curtail US defence spending. BAE relies on the US for around 45 per cent of its sales but says that its portfolio is “well aligned” with US military priorities and growth areas and doesn’t expect this to change under a new administration. Indeed, earlier this month, the group won a $247m contract to design and manufacture advanced GPS receivers for the US Space Force.
What a great opportunity to buy into a high quality stock at a discounted price. Did the market forget to set its alarm clock this morning? Either that or everyone is busy trying to find travel stocks to buy.
Keep an eye on it, there might be some profit taking and a retrace before long. Every day there is a new opportunity in the stock trading world at the moment. As long as you preserve your capital, you're still in the game.
Could someone paste that article please. Can’t get on because I don’t have a subscription. Cheers.
I seem to recall they outlined plans to close some of the struggling neighbouring stores during the earnings call last year. Makes sense. Great potential, but need to focus much more on digital going forward.
The dear leader aka jeanette krankie. Given that overseas summer holidays are currently looking quite unlikely, it’s surprising how well travel stocks have done so far this week. There is still a possibility that this summer could be a complete write off for airlines and tour operators.
HSBC, Standard Chartered among top bank share gainers in Asia on reflation bets
“HSBC and Standard Chartered's Hong Kong shares are among top gainers of bank stocks across the region on optimism that faster economic growth and higher interest rates will stoke profits.”
“HSBC shares jumped as much as 6.9 per cent, while Standard Chartered gained 6.3 per cent on Tuesday after a two-day market close. The MSCI AC Asia Pacific Financials Index rose nearly one per cent, to its highest level since June 2018 and on course for an eighth straight day of gains.”
https://www.businesstimes.com.sg/companies-markets/hsbc-standard-chartered-among-top-bank-share-gainers-in-asia-on-reflation-bets
Good first time post. Great research to track that trade down.
I think I’m going to have start following your tips Roxbury. It sounds like you’ve totally crushed it this past year. I’m currently up about £30K on the £90K I started trading with in April last year. I feel like I’ve missed out on so many opportunities though through my lack of experience and knowledge.
If I was sat on the kind of profit you are, I think I’d be looking at paying maybe £1K or so to get a professional accountant to sort everything out for me to make sure my tax return was 100% correct.
I’m not too big on technical analysis, but yes it does look like a cup and handle pattern. However, the problem is the news is now full of stories about virus variants and the possibility of holidays this summer being unlikely.
I think this will likely retrace back to 230 again. We’ve been stuck in a 200 to 300 trading range for the past 3 months. It will probably take the arrival of some better news for it to break out of the range.