Member Info for TakingMyTime

'This shares becoming a joke............driven down day after day............its above and beyond steel prices and trade wars, watching level 2 you can see it.......'
So you have two choices. Give us an explanation for why you think it is happening, and why you think it will get better. Or sell it and then you don't have to complain about it anymore.

Can't understand why people just complain about share prices without giving the least indication that they understand what is happening with them. Do they just expect stuff to automatically go up for no real reason? How do people decide which shares they are going to buy?

If those target prices are correct, it's time to buy.

My guess is that if we can get the Brexit uncertainty over we'll see a general rise. I think EVR is likely to rise more than the market as a whole, just as it has been falling more.

I also think it is time to start thinking about the US election. If Trump loses, the trade wars probably end or diminish, but you'll see lots of negative stuff for business happening, and that will hurt EVR. I suspect China is holding out in hopes Trump loses. If he wins, they'll probably do a deal, and EVR will go. So by summer, I think the US political situation is going to be a driver on this one. Right now, I think it is mainly Brexit.

I've just bought into housebuilders heavily, so I'm not topping up EVR, but I certainly wouldn't be selling. I realise this could fall further but I also think there's a very good chance it is near the bottom and will start to rise again. I look at what all those brokers said was their target price, and I think a lot of people are going to start changing sell to hold or buy if the market starts to turn at all, and when that happens we'll rocket.

I am often wrong, but that's my opinion, FWIW.

Finally, my assertion of the benefits does not mean I think they outweigh the costs of Brexit. I am sick, however, of people assuming that everyone who voted for Brexit is an idiot or a racist. I can certainly see their side of the matter.

Further:

I think much of the opposition to Brexit centres around C) in my last post. It is ideologically driven. Many remainers (certainly not all, certainly not me) WANT to be brought into line with European ideologies, they don't want the UK to be different, and they have at least doubts that a democratically controlled UK will align as completely with EU ideologies as they would like. In my view, there is a culture war going on over certain aspects of political correctness and many remainers see the EU as an ally in that battle, and don't want to lose that ally.

I think that is misguided. In culture wars, imposition of rules and regulations taking one side of the issue breeds resentment, especially if it comes from outside. Losers in these battles, for the most part, will accept the loss and see their role as seeking to change minds, if they see the defeat as being democratically inflicted. If they believe their defeat is unfairly or externally inflicted, they will resent it and perhaps turn to more unpleasant responses. In the long run, external imposition of rules in culture wars usually means nobody wins -- you have to persuade people.

And so I guess that would be an additional benefit -- fewer external impositions on cultural issues is probably going to make for a more peaceful society. It really doesn't matter if we end up with the same rules as the EU -- if people think they came from our own electorate and our own democratically elected representatives, they are more likely to accept them than if they come from Brussels.

Hi, Bamps. Not a Leaver, certainly not a no-deal Leaver - but I think we have to leave. Another Ref would be very divisive, especially after both parties campaigned on respecting the Ref. We had a Ref with a majority for Leave, and a GE with an overwhelming majority voting for those who said they'd respect the Ref. For this Parliament to fail to leave or to ask again, after they said they'd respect it, is an affront to democracy.

If they've changed their minds from their platforms, they should go back to the people with what they now believe, that the Ref should be rerun. If they can get elected on that manifesto, then rerun the thing. That's my view, FWIW. My vote lost in 2016, and again in 2017, and I think we need to move on. You have to overturn 'Respect the Ref' before you can overturn the Ref, that takes a GE with Remainers winning, and I don't see it happening. Remainers are divided, Leavers will unite, you'll get a no-deal Parliament. I'd rather we get it done with.

You said, 'I appreciate that you and half the posters want to leave, but nobody will come forward with any real benefits on leaving to you and me and I still can't see any.'

A. The EU is a very closed market, and it is extremely difficult to get trade deals with the rest of the world, because everyone has to agree. So a trade deal has to be beneficial not only to the other partner but to every single EU country. If the other partner wants to sell something into the EU that hurts Poland or Belgium or some other country, the deal is dead. Brexit would allow the UK to have win-win deals with other countries without concerns over whether it would impact Berlin or Prague. In the long run this would be very beneficial to the UK economy.
B. EU policies and trade agreements are designed to protect / benefit northern European manufacturing and southern European agriculture. The UK is more service-oriented, and receives less benefit from the trading bloc as a result. After Brexit, the UK could structure deals that put our interests first.
C. EU Regulations are based on ideological grounds (which may or may not match the UK's ideological bent) and an EU-wide cost-benefit analysis. Brexit would allow the UK to match regulations to its own ideology and make the cost-benefit analysis only on the impact on UK businesses/workers/economy. This allows the UK to get rid of or modify some regulations that are holding back UK businesses unnecessarily and add the regulations that make sense for us, rather than that make sense for Portugal or Italy.

All of these are substantially better for business and the economy. We'd have more trade and more fit-for-purpose regs.
That will not, in the short run, outweigh the negative impacts of Brexit disruption, in my opinion, but I have no doubt they will be better in the long run. I voted against the disruption, but that doesn't mean I can't see the substantial benefits.

I'm not sure there's a lot to say that hasn't already been said. This share is going to be erratic for a variety of reasons, discussed below. There are going to be ups and downs. If you think the risks are overblown, and are willing to ride it for a while and ignore the bouncing share price, the dividends are likely to be very nice, and you'll probably get a chance at some point to sell out and take a really nice profit, when the price goes up. But, that may be several years off.

In the meantime, if the company stays profitable, the dividends will keep coming in -- this is not a company that is going to retain a huge wad of cash. Will the company stay profitable? Mostly depends on the steel price, which in part depends on whether we're headed into a world-wide recession.

In my view, that's pretty much this share in a nutshell. I wouldn't put money here that I couldn't afford to lose. My EVR investment is relatively high-risk/high-reward. If the company keeps making money anywhere near the level it has been, I'll do phenomenally well out of it on dividends alone, and eventually the share price will go up, too.

So I suppose that's part of why the board is quiet, I'm not sure anyone has anything really new to say. This company isn't in the news as often as, say, BP. And you don't have former employees who have shares and commenting here, because most former employees are in Russia. You don't get someone saying they drove past an EVR facility and such and such was happening. And the company doesn't put out news releases every day.

Hello, Gentlemen. As of today, I'm a shareholder in TW, BDEV, and BWY.

I'm now 30% in builders, 20% of which is PSN, the rest evenly split among TW, BDEV, and BWY. I still think PSN is the best value of them all.

I'll be in these for the long haul, unless PE ratios return to something more normal. I don't really expect that until we A) get through Brexit, one way or another and B) get through the next general election without a Corbyn government, or the imminent threat of one.

In my view the only real risk to my investment in builders is Corbyn, but then, he'll destroy just about anything I could invest in.

Hi, Nige. I've still got a chunk of cash. Planning to invest it in one of these sometime in the next two weeks. Right now leaning towards BDEV, but before or after XDivDt? Not sure....

Hi, Nige. Interesting thoughts.

Am not too concerned if Brexit impacts earnings growth as you suggest could happen. It will be a short term blip, because as you've often said, demand for housing isn't going away.

I also think that there's a downside to Remain. If Brexit is cancelled there will be a lot of people who feel very strongly about Brexit, who feel like they won democratically, and it has been taken from them, and a lot of them may take to the streets. Some few of those will be idiots who will engage in violence and civil disorder, and we could have a very bad and costly mess on our hands.

So I'm not so sure cancelling Brexit is a win. I think it's an awful mess whatever happens and that David Cameron was a fool. In the short run I don't know that any outcome will be good. But in all of these scenarios I expect PSN in the long run to continue profitable and that their cash reserve and land bank means they are in a position to withstand a lot of problems. Once it is resolved one way or another, and any initial turmoil gets sorted out, foreign money will start to come back into the UK, and share prices will rise before long.

My guess, wilfie, is that they will pay a second dividend. Depending on Brexit and other factors it may not be as high as it has been. I hope they keep a significant cash reserve, but I think dividends are still likely.

Bearishness on steel price due to macro-economic considerations (recession fears, trade wars). Gearing high enough that the market is perceiving EVR as risky. Concerns about the possibility of trade wars causing problems with sanctions. Concerns about exchange rate vulnerability. Added to all that, concerns about the possibility of the price being capped by principals divesting big blocks of shares if it goes high enough again.

Plenty of reasons to see this as high risk and to hold the share price down in times of market turmoil and uncertainty. In my view, that also means a buying opportunity if you think the company is going to remain profitable, the concerns are overblown, and the dividends are likely to keep coming, even if at a marginally lower level. That's what I think, and although I see it as a somewhat risky investment, at these prices I also think it is high reward.

I don't care what the price is doing right now because I want to keep collecting dividends. At some point in the next 5-10 years it will be high enough that I will be tempted to sell and book a nice profit.

Sounds like Jefferies is saying pretty much what we've been saying here. I, however, am of the view they still have the target price too low, and that it is also too low on TW and BDEV, and that they too should be buy. The only reason to have a target price anywhere below 3000 is Brexit pessimism, and I don't even think no-deal Brexit would undercut that -- at worst, it will just slow/delay the rise.

Once the uncertainty is gone, one way or another, and the next report comes out showing the company is still making money, this share price will go up.

Wonder what they suggest for the share price now? 800? 1000? LOL.

A share like this is going to bounce around like crazy. Fundamentals won't stop the bounces but they, not sentiment or momentum, will determine the long-term trajectory.

Hi, Gavster. In 2018 SLX averaged around $40 for the year.

Combined steel segments (including US steel) was approx 11.5 billion revenue, EBITDA of 2.7 billion, CAPEX 0.4 billion.

All other things being equal (and they never are), a 25% reduction in price (thus, average $30) should mean a 25% reduction in revenue, which would wipe out EBITDA from the steel division. Coal would remain profitable, presumably. But that would suggest that the critical SLX price for EVR to remain profitable is probably somewhere in the $25-30 range. We probably want to see an average around $35 or higher to keep generating nice dividends and (hopefully) keep the gearing ticking down a little.

I'm curious. In your years of watching this company, have you noticed any correlation between employment levels and Primark performance in LFL sales?

US market is huge.

I view this as an unusual opportunity to hold a defensive share that should do reasonably well in a downturn (food is still food, after all, and cheap clothes look more attractive when you don't have money), but that also has a significant potential upside in the US expansion.

Sounds like you just see downside for the company. Care to comment on the flaws in my logic?

Hi, johnson. Certainly could be no-deal on 31st October.

Possibilities:
1. BoJo finds legal loophole around it. Not too likely but will challenge it if they can and any weak spot in it will constitute a basis for a legal challenge that can be dragged out, appealed, etc.
2. One of 27 Euro countries vetoes the extension because they are fed up.
3. BoJo finds a way to sabotage it, perhaps by threatening to use UK veto of EU business at every opportunity, perhaps by threatening Farage coalition and the hardest of hard Brexits in January, perhaps some other way, thus convincing the EU to deny the extension.
4. Boris refuses to obey the Benn bill, which does not specifically have any penalties attached to it, and finds a way to run out the clock. The Benn bill put a deadline of the 19th, Boris is not in violation of it until midnight on the 19th, which means he only needs to tie things up in court challenges for 12 days. He could even choose to go to prison for 30 days. Parliament could do a vote of no confidence but there is nothing in law that says he has to resign if they do -- he has 14 days to try to regain the confidence of the house.

I'd say no-deal is very much still on the table. They've been very, very clear that they are out to destroy him, and he's not likely to go quietly into the night.

Nige -- I think you are right that no-deal is pretty well priced in.

LFL sales being down isn't news, we knew about that already. Primark has never really been about being cool, but being cheap. It's been the place to go when you are trying to keep costs down because money is tight. In that regard, ABF is a good defensive share in a recession -- when people lose their jobs, or think they might, they don't want to spend £30 for jeans when they can get them for £5.

IMO the reason LFL sales are down is because unemployment is low and has been low for long enough that a lot of people are more secure in their jobs and less concerned about saving every pound. I don't think it is that Primark has lost the market, certainly not permanently. And it certainly does make sense to keep opening new stores, even if LFL is down marginally, as long as they are profitable, which they are.

Not sure why the drop in share price. Seems like the bad news (like-for-like sales at Primark down) is hardly surprising, we knew it already. Everything else seems reasonably good.

Nothing here that would change my overall view.

Thanks, Nige. Wouldn't say I'm worried. I don't think Brexit will be a disaster, don't even think no-deal would be.

EU trading policies with the rest of the world are configured to help German manufacturing and southern Europe agriculture, with British financial services a lower priority. Eventually, UK might be better off with own trading policy. But the benefits in the short and medium term probably wouldn't negate the costs of breaking out of the EU, especially if no-deal. And whether we'd see those benefits in my lifetime is hard to say, almost retired now and might take a couple decades before it really paid off.

So I'm fairly relaxed about Brexit because I can see the arguments both ways. I have my preference.

I AM worried about how both sides have inflamed tensions and engaged in horrible rhetoric, and what's going to happen as a result. Out of 17 million who voted for Brexit, there's more than a few who will turn to violence if it is cancelled, I'm afraid, just as out of 17 million who voted against it, there's more than a few who will turn violent if no-deal happens.

Referendums are dangerous, especially if a 50.1% majority is going to yank the 49.9% out of something they want to be part of.

Hi, Nige. I'm afraid there's a significant risk you are misreading the situation. https://www.politicshome.com/news/uk/political-parties/conservative-party/boris-johnson/news/106366/tories-open-14-point-poll.

Outside London, and across the north, they like what BoJo is doing. His position may be untenable, but since Corbyn dominates Labour and is intolerable to everyone else (and a lot of his MPs), there is no way to force him out of power except with an election -- and there's a serious risk the election strengthens him, not hurts him.

He may be out of step with his MPs, but he's not out of step with his supporters, and they'll back him and send him a Parliament that will follow him.

There's a serious risk that all this results in a hard Brexit Parliament, with Boris beholden to Farage and not to any Remainers at all. I don't know what will happen but I'll not discount that risk at all. I don't think it matters to house builders in the long run, but it does for some of my other investments.

@johnson, I'm not really expecting good things for share prices until some measure of sanity returns, which probably will not happen until after either Brexit or Article 50 is revoked. My other concern is that sanity won't return until all the protests and violence are over, and yes, I think so much hatred has been stirred up over this that there will probably be violence.