The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
You just have to look at Sirius minerals. Anglo American got the wordsmith mine very cheap because Sirius was desperate for cash. An interesting question would be how receptive shareholders would be to further fundraising?
I don't think it will be too long before we find out. They have got two million. They have been burning cash at £1m a month. If it's things as normal they will need to raise cash in the next six month. Let's hope it isn't the case.
I bought some when COVID was rampant. The story was we have this scanner all ready to go we just need cash to put it into production. They got the cash but I'm not seeing these scanners. Again they are coming out with bullish stories immediately followed by a cash raise. Who is making this loan?
All I see is rapid cash burn, ever increasing intangible assets and high stock levels. They also make an announcement for orders received that should be normal every day business.
I sold my shares for a small loss. Not good but on reflection it was a great decision.
There is an article in the Investors Chronicle on Kromek. The front page headline on the same issue reads "Spotting the warning signs - How Investors can avoid the next big accounting scandal". Having read both articles I would be worried.
A lot of expenditure is also being capitalised. From memory there is something like £30 m on the balance sheet as intangible assets. The true value is very subjective. Too risky with more downside than upside.
Covid isn't such a big issue as it was. They need a better business plan focusing on what is going to provide long term profits.
They've done a share buy back, set up a Toyota dealership in Scotland and bought the freehold of premises previously rented by the Coop. All of this should have a positive impact on future EPS. I understand trading conditions will worsen but they seem in as good a shape as any car dealer to deal with it. You would think they are undervalued.
I have read the Pendragon results and compared the valuation with Vertu. By any sort of reasonable measure you would think Vertu was undervalued. Neither are the market conditions slowing down. They are saying the first two months of 2022 are better than 2021. There is no reason to think anything is different for Vertu.
The market cap is £233m and the forecast profit is not less as than £70m which is a PE of a little over 3. That does seem low. What the PE is when the market returns to normal is the big question. You would think the present fall is just a blip caused by profit taking at 75p followed closely by a general market fall. Is anyone aware of any other reason for the fall?
I don't follow your logic on this. Kingspan made the product and NHBC approved it but you reckon Persimmon are responsible because they make a profit.
They have offered to correct defects in buildings they constructed but I don't agree with Grove's approach of asking responsible householders to pay for those who can't or won't pay.
This doesn't make sense. The decision to keep the furlough money was known some while ago. Why would it have such a large effect at a much later point? It's not something that is affecting other motor retailers. I hope someone doesn't know something and is doing some insider trading.