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Would be useful to know why the CEO was defenestrated. The directors are now in the close period on the basis annual results are published late July, so cannot trade. They bought shed loads of stock between 83p and 90p in late March when the shares fell on the previous trading update, so you'd think 66p would be a bargain if they were allowed to buy. Sir Nigel Knowles, stepping down from Chair to CEO, has a demonstrable track record of success elsewhere and owns > 2m shares, so good alignment with shareholders. Vin Murria, who has a glittering track record of creating shareholder value elsewhere, is an NED and bought >1m shares on March at 83p. On my back of the envelope calculation the problem is costs given revenue was up 11% y-o-y, (about 6% organic), which is actually quite impressive given they lost 2 months to Covid, plus they made a big Spanish acquisition in December which will be hurting. Net debt/EBITDA ratio is uncomfortably high on the bombed out EBITDA number for 19/20 but EBITDA ought to recover quickly in 20/21 given disclosed & quantified cost savings being implemented. Legal services is a consolidating industry and DWF have a recognised niche in insurance so, for choice, a stock I would be looking to buy. Don't forget the IPO at 122p was over-subscribed only 14 months ago. With any luck, an institutional seller might appear in the coming weeks and weaken the price further. But don't bank on it.

EBIT for y/e 29 Feb 20 was £2m, so EV/EBIT is > 1,000x and they will lose money this year. 2m social distancing will restrict capacity on UK trains to 15% of “normal” and even when that is lifted, people will be reluctant to use trains again in a hurry as the whole process has become so user hostile. Train operators are reporting that despite extra trains running this week passenger numbers are broadly similar to last week. Recovery to anything like normal will be a long hard slog. I also question the sustainability of the role of a third party owned ticketing portal in a (currently) re-nationalised rail industry where the industry can now pool its resources to build and operate its own website for booking direct, like the user friendly Swiss Railway SBB App for instance, and I’m sure tried and trusted software developed elsewhere is a bigger longer term competitive threat than those buying the shares at 496p think.

Life insurers are routinely stress tested for adverse markets far worse than the impact so far of coronavirus and hedge against the obvious risks of falling asset prices, falling interest rates and widening credit spreads. The fiscal stimulus packages target a reduction in credit spreads which is one of L&G’s biggest solvency ratio sensitivities, so L&G will be a major eventual beneficiary. L&G said in their Eurobond prospectus that on Mar 18th the impact of coronavirus had been minimal, one day before the bottom of equity markets. Moody’s published their 6 monthly review on 7th May with no change to rating. If something was going badly wrong here, Moody’s would have spotted it as L&G give their analysts necessary access to information and Moody’s know what to look for. And if L&G know something is going materially wrong, they are obliged to say something. Voids (that’s dividends cancelled on companies they invest in, unpaid rents on properties or bonds they own in default) will be a challenge they have to manage. The Board is first rate in terms of experience and gravitas with a Chairman who was Second Permanent Secretary to the Treasury, not the sort of person to pay dividends the company cannot afford.

The fact is the insurance companies have seen minimal impact to their day-to-day operations and only their solvency ratios have been hit, but not that badly so far. They are in the business of managing risks and hedge against the major risks to their solvency ratios. The fact is their current solvency ratios allow them to pay the dividends they have declared but, to be prudent in case markets slump further, should defer paying them until (say) 1st October.

The Board need to say something, today., ditto M&G and Aviva. The PRA clearly has them by the balls. It is fascinating that in a prospectus published on 18th March to issue a £5 billion Eurobond, the company said the impact of coronavirus as at that date (which was close to the FTSE 100 low) had been minimal, i.e. no need to pull the dividend. Looks like in the new world, any company in receipt of government support cannot pay dividends or bonuses, and nor can banks or insurance companies not in receipt of government support. We’d have been better off under Corbyn. To L&G shareholders, this actually makes little difference. The cash retained remains part of shareholder funds and boosts the solvency ration, therefore the suspended dividend can always be paid out as a special dividend in future as and when the solvency ratio allows, which it probably will. Several other companies that have pulled an already declared dividend have seen their share prices rise on the news.

The director buying yesterday at 96p is very shrewd. At that price, given shareholder net cash of c45p/share, the company’s EV was about 1.2x its 2019 EBIT, which was crazily low even though 2020’s EBIT will obviously fall. However the worry is all about its dividend policy being too generous for its solvency ratio, or not. Slide 48 of its recent results presentation, available online, quantifies the exogenous sensitivities to its solvency ratio. The big significant recent move this week is the jump in the 10yr gilt yield from 0.25% to 0.7% this week as the world expects a tsunami of gilt issue on the back of bailing out the economy and I expect gilt yields to rise further given sterling’s prospects. This helps M&G’s solvency ratio hugely. Also, resumption of QE globally should narrow credit spreads significantly, another big help to its solvency ratio. With the other big sensitivity of equity markets beginning to stabilise, for now, M&G will be a cheap acquisition target in a consolidating sector if its shares hang around these levels.

L&G yesterday published a 234 page prospectus to launch a £5bn Euronote. This is publicly available on line. It included a specific update on COVID-19, section 1.13 on p21. “As of 19th March, concerns regarding COVID-19 have had a minimal effect on the Group’s business...... “. L&G’s share price has recently halved and, at 165p, yields 7.2% on its declared final dividend which goes ex on 23 April. It’s credit ratings yesterday were confirmed in the prospectus as A2 (Moody’s), A (S&P), and A+ (Fitch). Insanely oversold.

Company had net cash of 42p/share at December 31. Assume AUM have fallen 40% since then, which is more than the market decline, EV/AUM is incredibly low at 90p, given it’s cum an 11p final dividend already declared, and this is a consolidating industry. If there is something going horribly wrong here the CEO doesn’t know of it, having bought 150,000 shares yesterday at 111p, and there is zero shorting of the stock.

If IAG is substantially grounded for the next 3 months that’s circa £5bn of revenue lost with a relatively small offset for lower variable costs, principally fuel. BA claims to have £7bn of cash reserves which could see it through the next 3-4 months but the problem is after that. Business travel will take a big long term hit as companies have recently learned to do without it and with UK insurers no longer offering travel insurance, nobody’s going to travel without it. It’s obvious to all Heathrow is not going to get a third runway leaving BA slot constrained at its hub. EU subsidy rules and the green lobby will prevent any government support. BA is not in a good place. The EU nanny state will extend lockdowns for months.

If IAG is substantially grounded for the next 3 months that’s circa £5bn of revenue disappeared with a relatively small offset for lower variable costs, principally fuel. BA claims to have £7bn of cash reserves which could see it through the next 3-4 months but the problem is after that. Business travel will take a big long term hit as companies have recently learned to do without it and with UK insurers no longer offering travel insurance, nobody’s going to travel without it. It’s obvious to all Heathrow is not going to get a third runway leaving BA slot constrained at its hub. EU subsidy rules and the green lobby will prevent any government support. BA is not in a good place. The EU nanny state will extend lockdowns for months.

M&G operates in a consolidating industry. A dividend cut and it will be taken over.

Coronavirus will teach many companies that there is no need to send executives on expensive business class flights and demand will take a big hit. Also, IAG is cutting back capacity by cancelling flights which is the surest way to alienate passengers booked on those flights. It is now obvious Heathrow’s third runway will never be built. The business model is crazily geared operationally, losing money at 60% load factor, very profitable at 70%. The only silver lining is the lower fuel price. There remains a real risk that governments will put public health ahead of the economy and ban all cross-border travel, grounding most flights. That is not priced in.

AGM with trading update due on Wednesday - critical to share price. Extra debt with new cruise ships means consensus forecast net debt/EBITDA is now 3.5x for y/e Jan 2020 and 4.5x for y/e Jan 2021, which is very high relative to most other companies. Any downgrade to EBITDA will raise fears of a rights issue. The shares are not being shorted, at least not yet. Share price weakness is existing holders exiting, with not enough buyers. A bid for the company obviously gets more likely as the share price falls but an insurance company won’t want the ships and a cruise company won’t want the insurance business, ergo the conglomerate structure of the group is a poison pill. Today’s Sunday Telegraph Article reads to me like the major institutional holders hoisting a For Sale sign over the group at 36p - like they’ve had enough.

Following 2018 full year results on Feb 28th, Investors Chronicle queried on 1st March this year how DGOC could have an operating profit greater than its top-line. The annual report for calendar 2018 was posted online on 18th March, confirming EBIT > revenue. On 27 March, the company raised £176m of new equity in an accelerated book build placing at 117p, the shares trading 8p higher the day after. I accept that Investors Chronicle is not universally read, but it was onto this aggressive accounting several weeks before oarfishresearch, whoever they are. To investors who participated in the placing, for whom the accounting now comes as a surprise, caveat emptor.

The issue here is the appropriateness of the accounting policies, which the Board determine. The accounting policies are clear enough in the Annual Report - investors cannot say they were not forewarned, nor can they now blame the auditor.

I read the oarfishresearch reports (there are 4) with incredulity and my initial conclusion was that any major auditor would have spotted this aggressive accounting. Having then read the company's 2018 Annual Report, what oarfish say is largely corroborated. The company's auditor is Crowe UK - I'd never previously heard of them. This rings alarm bells: remember the acquisitive Queens Moat Hotels where the shares became worthless in 1993, auditor little known firm Bird Luckin ? Clearly the DGOC acquisition spree with shares issued at a premium is over (the last issue was at 117p), profits have been over-stated by uber-aggressive accounting policies with inevitably low cash conversion of profit and the generous dividend policy is not as affordable as we previously thought. I assume the dividend due for payment on June 28th will be paid. The share buyback will inflame investors - issuing shares at 117p and buying them back a few months later much lower obviously makes sense to the company balance sheet but is being funded by investors' losses. The shares are not going up but nor is the company going bust and the recently appointed NED to Chair the audit committee needs to think about issuing a press release to counter the oarfish claims. Who are oarfish by the way ?

Token buying by directors - negligible amounts compared to their directors’ fees. Don’t be fooled. This is actually quite bearish because it is now obvious the directors know nothing about imminent Board change, otherwise the rules would prevent them from buying. So it looks like Lance Batchelor has security of tenure - for now.

Activists will look at this for sure, but no guarantee they’ll adopt it as a project. Activists target good businesses run badly. Saga has bad businesses which are also run badly. Insurance is competitive and they are a sub-scale operator in cruising, taking on a lot of debt. No bidder will be interested in the group because an insurance company won’t want the cruise ships and a cruise operator won’t want the insurance. The Board feels dysfunctional with the CEO being allowed to pursue a strategy that clearly isn’t delivering and a lot of capital being mis-allocated. It is no longer a category killer brand name for the wealthier 50+ and a lot of those in their 50s and 60s are tech savvy enough to look elsewhere. The recent shambles over the discontinuation of their successful Platinum credit card with AIB with users still not offered an alternative provider by Saga 14 days after the AIB switch-off is testament to how the company is being mis-managed. There is a price for every share at which you can make money, eventually: 40p ?

This is mainly automotive related via GKN - hard Brexit, Trump tariff threat and shocking UK new car sales in September which Pendragon, last Friday, said has continued into October (and Pendragon would know). But it’s not just that. Acquisitive industrial conglomerates that are stock market darlings eventually run out of road - Hanson and BTR for instance along with MRO forerunner Wassall - as investor doubts set in after a huge acquisition. Hanson and BTR shares were de-rated to yield 5% as investors lost faith: a similar yield for MRO shares would imply an eventual share price of 100p. On 11 January, the day before the GKN approach, MRO was capitalised at £4.2bn and GKN at £5.7bn. MRO offered an eventual £8bn+ for GKN. Market cap of the combined MRO/GKN group today at 160p is £7.7bn, which is huge shareholder value destruction, and IMHO difficult to reverse.

The 3x over-subscription statement was unaudited. If that was true, the shares should have been placed at a higher price.