Member Info for Velo

"Velo, or anyone else.
How big of a problem is BT's debt  + ......."

- Laters; still not quite settled back in after travelling back to base late last night.

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& while I'm at it ....

" These trends contributed to a drop in revenue, which fell by 2% to £17,246m during the nine months to 31 December. Adjusted cash profits for the period, BT’s preferred measure, fell by 3% to £5,900m."

That quote attributed to a media analyst posted further below, just makes my blood boil, not because it's inaccurate - it isn't, but because of interpretation and subsequent market over reaction to what was expected anyway!

.......Again Laters. Maybe this evening, otherwise not - as my attention is towards the expectant of first viewing of the initial Q4 forecast tomorrow and that's key to the year end and maybe either further accelerating declines in the SP or the opposite, an end to the 'current' decline in the SP (temporary or otherwise).

Yes, I took it that you were referring to the Jansen post, Aus.

My fault if any confusion by anyone speed reading as I posted on 2 separate topics under the same post heading.

The impression I have of Jansen is that he has not stamped his authority on the company yet. DuPlessy has his shirt tails in a tight grip. Jansen is Pro divi cut man. DuPlessy and therefore the board are not. It's reached the media so not idle speculation. No smoke without fire and all that. I think he's a hard worker as he's shifted and sold loads of surplus enterprises as he can to reduce debt, but not given credit for it. He's up to something political though, by highlighting interim are under expectations and in the same sentence saying but it'll all come good at the year end! 3 months!?! If he's not Superman then they're up to something as you can't turn BT round to expectations in 3 months flat!

PS. Unless there's a worldwide stockmarket crash waiting just around the corner. Then pick any number you like.

Anyone sincerely believing 68p is a remote possibility is invited to kiss my Rrrrsss! And only after I've had an industrial strength vindaloo curry and a windful of Heinz beans.

Extending the long term trend lines as if May 2018 onwards never happened, means that the current SP (as bad as it is) is way, way, above where the long term trend lines would be right now, if that breakout from mid 2018 onwards never occurred. And they themselves, long term trend lines would today, be way, above 68p.

The shape of the decline has changed after that summer/autumn breakout of 2018. From summer last year to now looks like a double head and shoulders. But head and shoulders only function if they appear at the top of an uptrend not at the bottom of a down trend. Not a head and shoulders man so what do I know anyway. But if they came at the top of an uptrend then it would be bad news. It's not. It's a down trend. Whatever it is, the shape of the decline from that mid 2018 to date, is not at the same rate of decline as the years preceeding it back to 2016. I think that is very noticeable. But is it meaningful?

In fact extending them to reach 68p would take years and years. So it would be more of a question of do you mean this decade or the one after? A p!ss take joke. Nothing wrong in joking but it must be funny to be a joke.

Toff -

" As a rule profit warnings follow profit warnings "

Actually referencing the work of academic researchers shows that is an historically untrue statement.

It may have been your personal experience over the past year or two, so is really a personal opinion 'snapshot' that you are offerring as a fact, but over thousands of company case studies, teams of financial academic researchers have published papers to show your statement not to be the historic norm.

Personally, over the past few years it has been my experience to have witnessed multiple warnings from companies, but I accept the findings that is not true of all profit warnings. I have the exact % findings back home, but won't be home until next Wed or so.

" As a rule profit warnings follow profit warnings

Case in point being Debenhams- 4 profit warnings in 6 months. Okay that’s excessive but the chances of a profit warning following a profit warning are extremely high..."
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Is it possible that you're anchored to personal experience on a selective basis, rather than an unbiased market wide research on ALL profit warnings issued over a pre-determined set time period?

For instance have you profit warning data on companies that you have no interest in? Or is your knowledge based only on companies you have a passing interest in?

Poker - I do keep records, but not on probabilities, only one line entries of dates the warnings were issued over A4 lengths but I have slacked off in recent years. Intend being more active on this issue but desperately seeking a website that provides this info free daily all in one place as I'm rarely available at 7am every day on a regular basis. Would be if it was provided for me. Have missed loads and only found out when too late to act upon.

It's impossible to forecast if a company is likely to issue more than one warning. You might be surprised to learn that the world average is that each company involved only ever issues the one warning. So not a case of buses comes in threes as you will often see posted.

Have the actual data back home. (I'm posting long distance) but it's something along the lines of the overwhelming majority only issue the one warning. And of those 30% go on to issue a second with 15% or so issuing a third and a tiny 4% issuing a fourth. Here's something that I know will definitely raise a Roger Moore eyebrow in disbelief. The number of companies going on to declare insolvency/bankruptcy is so infetisimaly small that no significant figures are worthy of including in the results as they are several decimal noughts to the left of a decimal point to as to make no difference to the data.

So one to scotch is that profit warning companies often go on to go bust is a non-starter - they don't. The art is in distinguishing companies that have lost their 'moat' to overpowering strong competition and those who are just going through a cyclical downturn. As I look to go long in them after 12 month-ish. Stats show in the 2nd year they outperform whatever FTSE is showing. Made some money over the past 2 or 3 years but on an amatuer hit and miss discipline level as the fancy takes me. Want to up my game on profit warning shares from this year on. But discipline is the key - yet again.
Need a website that specialises in collating all profit warnings every morning.

Poker:

1) Sell On The day IMMEDIATELY you see the profit warning.

2) Optional - Short your own stock if you have a spread betting account and only if experienced in spread betting.
As said, optional.

3) If an investor still has total belief that it's only a transitory profit warning ie., ( every company will cycle through a poor sales patch) then the research reveals that a long term holder can use this period to top-up stock on the cheap in the lows. But think ultra long term. Usually this swings and ladders roundabout will only last 12 months approx.

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- After 12 months the profit warning hit stock is deemed only "safer" to buy. Not a guarantee. During the 12 months the stock will constantly alternate between delight (false rallies) and dissapoint.

PS.
The SP shown at the day's end before the following morning's profit warning will never be seen again for at least 12 months on average.

" « For instance Royal Mail is in panic selling mode right now too, and I expect a similar mini rally in the coming werks/month. »

Royal Mail is another share everyone should avoid. They’ve fallen because they’ve issued a profil warning, highlighting the probability of making a full year loss. "

Toff, there is a difference. Don't mistake trading for investing. I'm talking trading in the short term.

Going long in a perennial long term down-trender never a good idea :) So yes, dangerous. Best to be In and out.

Every. Single. Oversold. In BT. Has 100% for many a year, resulted in a temporary mini rally. From 5% to 20% rises. You never know which. But they always come out of oversold conditions in BT positively. So far, they never last hence - in and out. Not all stocks react quite the same as BT has done.
"Profit warning" hit shares I study too. Have tons and tons of data from researchers. Even pros can mess this one up. Only ever safe to buy after a full year from the date of the warning. Data is all with profit warning shares. Very few are delinquent to the average behaviour. It's quite remarkable how they all behave much the same.

Quiz:

If you're up early enough on the day a profit warning is issued in a stock you hold, what's the very FIRST thing you should do THAT day, WITHOUT QUESTION REASON OR WHY? The first day! Too late if you leave this single act longer than a day.

What's the 2nd thing you should 'consider' doing? The same day!

And overall if nothing shakes you, what might a long term Buffett-type holder do, in which they have only the following 12 months allowed, in which do do it in?

No emotions involved. All actions based on research results from the US, Europe and the UK. They all react exactly the same no matter which continent.

Fleccy, I've seen your posts on BT for some years now, and I can only agree 100% - you neither become despondent nor punching the air in euphoria. Nor urge others to buy or to sell. You follow your own course and sometimes post on your own situation to add veracity to your viewpoints.

Poker - 'Ted' a nice textbook example of a an SP setting off on a mini rally after neatly (very neatly) coming out of a clear oversold condition.

BT's on this current, ongoing occasion, is one of the messiest I've seen, messier than last autumn's. Almost commented on the double whammy mislead on BT appearing to lift out of oversold - falsely - twice- only to revert back down into oversold condition. Ambushed on both attempts to rise out by the bears!

But tied up elsewhere. My main preoccupation is awaiting the first market consensus for Q4 which should come out sometime this month. Some brokers analysts are shooting their bolt and grabbing the headlines ahead of the pack, so concern is that will become the forerunner of the herd consensus. We'll soon see. Online media reviews will tumble out from the day after and onwards tha initial report no doubt.

"... once this hits bottom...I "reckon" there will be a fairly quick 15-20% recovery before a pause for thought
now ..what is that bottom? "

I concur. My view entirely. I specialise in oversolds if that's not too grand a word to use. Maybe a better word would be study - I study them.

For instance Royal Mail is in panic selling mode right now too, and I expect a similar mini rally in the coming werks/month.
- Yet it's longer term trend lines are resolutely downward looking too, just as BT's are. Late summer of 2018 saw BT's longer trend lines turn to the upside. But it ended on Dec 1st that year, or rather the signs were there on that date, and they too took a month or two to turn south once more.

Not forecasting 15 - 20% as stated by Poker above, but it will rise in the short term - at least once the panic selling is over.
I'm as sure as sure is, that this oversold condition will end soon and that's when a mini rally will take place. Many who are despondent this week will change their emotion to euphoria that BT is at last on it's way, but unless the longer term trend lines change to the upside which will take a month or two at bare minimum, I'm only prepared to say yet another mini rally once the oversold condition is terminated which I am more than sure it will. And soon. Judging by the 10 to 20 years of average length of previous over sold conditions in BT. They always induce emotional despondency in holders and euphoria when on a mini rally but the long term trend lines are the voice of reason and they ain't singing hallelujah just yet.

The SP is still in Oversold "panic" selling mode. When it ends as they always do, the SP will gravitate away from continual falling. Might return to falling, weeks or a month or so later, who's to say, but when the SP rises out of oversold it's feeding time for seaside gulls and bulls.

Just hoping the first Q4 consensus forecasts are published whilst the SP is still in oversold condition. Maybe they'll be out by the 14th.

The classic view:
".. trading in options doesn't affect stock prices directly simply because the options are traded. It really doesn't matter how many different option strategies you employ. Trading in options is truly a side play and has no affect on supply and demand for shares, among either buyers or sellers.

One exception to this: There is a tendency for stock prices to gravitate to the closest strike near expiration, known as "pinning to the strike." But even this is only a temporary effect caused by trading with options strikes in mind. Once expired, the options do not affect stock prices any more.

Even the volatility aspect of options is far removed from stock price behavior..."

I asked this question the other day because I'm not sure if the aquisition trading results are included or not. The debt of financing the Liberty acquisition certainly is!

Anyway the question was: Are you expecting a net profit or yet another net loss at the Q3 stage?

I have VOD as most probably coming in with a net loss, a little bit worse than the H1 results @ circa £2.150B loss. Or maybe not at all, if the trading aquisition results are to be added in separetly? Even if it is a loss what matters tomorrow is - Is the loss bigger or less than the market consensus forecasts? And those as I do not have.

So even if a loss but less than forecast, it would still be a 'win' for VOD.

Typing this sat in a motorway service station table so hoping it doesn't auto correct after I click post :)

Did any of you sport a wry smile today, with last week's official pronouncements of 'Oh we're slightly under expectations' and brokers downgrading their forecasts in response (three in the Brokers Ratings window link above since the results released!)

But you'd never guess by the SP performance today, apart from the final closing minute.

It moved so rapidly that for 99% of the day the SP had lifted out of oversold (but only barely). I was musing over a first tranche buy (to trade only, as I'd be buying into a longer downtrend, catching falling knives and all that) but I delayed until the end of day, for confirmation to see for sure - and sadly got the wrong confirmation as the SP fell back and into oversold again.

What I'm most concerned about, is that when the initial Q4 consensus forecasts are released from perhaps the 7th Feb onwards ( maybe even the 14th) that if they all carry out that threat to downgrade, it will initiate the bearish media reports and then as always, the SP would turn bearish once again.

Still, being up more than 2% for most of today, somebody's gone rogue and not following the script of: Oh but we're produced less to come in slightly under expectations :)

P.S
Of course there are many examples of companies well undervalued, but not many where expectations of outperformance are so high, as they are for Reach.

But as said, RCH is not alone in being under valued, and in those other stocks years have passed by and still no re-rating by the market.

Sorry (fat finger syndrome). Start over . . .

" Will post findings on why I think it will almost triple from here tonight if time. "
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The historic P/E ratio is minus P/E -3.512 that's because last year was a net loss not a net profit. But forecasts for the current year showing a net profit mean that at the current SP the forward ratio is P/E3.58

- And therein lies the potential.

If Reach is to enjoy a re-rating then you'd be forgiven for thinking by how much higher than the average to its industry?
Well no one knows that of course.

But what you should at least hope for is that Reach AT LEAST gets re-rated in comparison to the bog standard average, and no worse than the average. Which the forward P/E ratio still is - worse than the industry average!

Consider:
The Industry average median that Reach inhabits is a not very demanding P/E10.2

Yet, with RCH's fwd P/E of 3.6 you can see the SP would have to increase to circa 408p just to be considered avarege. Hence my earlier shorthand of nearly 3 times increase; from where it is now.

If anyone believes they have evidence for even further growth then I'm all ears, but right now, if RCH is to live up to it's forecast reveune and net profit - then to fit in with the average for the industry the SP has room to increase to nearly treble what it is tonight - if you believe the market will re-rate RCH.

A general presentation by RCH is scheduled to belaunched to analysts and investors towards the end of this month. If succesful then after that presentation, and if the market likes what it sees, then there is room INMO for the SP to head towards the 400p+ and still only be adjuged to be an average participant in it's industry sector.

However if you believe it deserves to be re-rated higher than it's peers, well that's another estimation entirely, but 400's is the first stop if it truly is to enjoy a re-rating.

" Will post findings on why I think it will almost triple from here tonight if time. "

The historic P/E ratio is minus P/E -3.512 that's because last year was a net loss not a net profit. But forecasts for the current year showing a net profit mean that at the current SP the forward ratio is P/E3.58
- And therein lies the potential.

If Reach is to enjoy a re-rating then you'd be forgiven for thinking by how much higher than the average for its industry? Well no one knows that of course. But what you should at least hope for is that Reach AT LEAST gets re-rated in comparison to the bog standard average, and no worse than the average. Which the forward P/E ratio still is.

Consider:
T

Seen this 2 years or so back, and failed to act. Could have gotten in earlier this morning at 140-ish but was going to wait until afternoon but lowered my budgeted buy so I can buy multiple times should there be a retrace. So in with my first tranche at 146p.

Should almost triple in coming month or two, if all the hype transpires - if not a healthy dividend to enjoy.

Will post findings on why I think it will almost triple from here tonight if time. Only when it's near tripled can you look to the jam tomorrow forecasts.

See if you can guess why I say the SP can nearly triple, before I post why I think that, later on. The clue is in the P/E ratios that should be set alight after the big meeting later towards the end of this month.