Share tips thread

[R8Steve]

Anyone having a look at Pantheon resources? Currently down 50% in a week on a failed horizontal drill (vertical drill was no issue, simply trying to increase flow), seems very oversold to me.

I've jumped in at 89p.

[DonkeyApple]

avinalarf said:

DonkeyApple said:

If it irritated then I don't think people would reply. In my case I just have a very blunt style of writing that I am aware upsets some people on PH so I'm forever adding fking stupid smilies to try and let people know I'm not being rude or bad tempered. It often doesn't work.

Don't forget, other business only don't operate like this because they can't not because they don't want to. For example, take the local corner shop he sells cheap umbrellas for £5 but when it rains he swaps the price tag to £10. He's making a market based on likely supply v demand. Supermarkets analyse vast amounts of data and price their goods to achieve maximum profit. Petrol stations are a great example. The further away a competitor is the more they can charge above fair value, likewise if a retailer wants to take consumers from a competitor they can discount prices long enough to get the new customers used to going there instead then put prices back up.

I think the real difference with the stock market is that this is just laid bare and is more obvious but the mechanism is at the route of all commercial activity.

Edited by DonkeyApple on Thursday 8th September 14:52

Apart from petrol stations,I don't think your analogies really stand up to scrutiny ( smiley face ).
If a LCS put up the price of his brollys when it rained it wouldn't do his reputation and goodwill with his regular customers much good.
In fact continuous fecking about with prices,like Gap do,just means a lot of peeps just wait a couple of weeks for the "Special offer" or "sale price".
With supermarkets and business generally the mantras,"the right product at the right price" and "know your customer" stand good for me.
The supply and demand factor is always a factor ,and there's the herd mentality,but it doesn't really answer my underlying comment.
I'm sorry, but I don't think,or not really sure,that you've nailed it. ( very smiley face and a thumbs up ).
I really expected you to give me a " meaning of life" type explanation ,a big ask possibly. ( another smiley face that's grinning ).

And when does Gap change its pricing? they analyse every bit of data and know when to do it, by how much and what increase in turnover it will generate.

Corner shops can alter pricing because they have a large percentage of one off passing trade that needs something at that moment. Another pricing action is on fags and booze over a Budget.

Prices move regularly and it's always for a reason whether responding to immediate sell side or buy side conditions and as Walm says, you just need to dig down to find the reason.

With abf.l it's probably more pertinent to look for why it was sold of just before 2pm rather than why it has recovered?

[walm]

avinalarf said:

OK Walm.
ABF....today circa 10p swing.
Today two largeish volume sales....9097 and 6170.

On 31st August Berenberg ( who he ) cut rating to hold.
Target price 3000p.

ABF trades c.750k shares a day often >1m.
Not sure I would be worrying about any individual "big" ones.
Most people just use algos (computers to trade through the day) or blocks in the dark pools (off exchange deals done for larger volumes).

What you are talking about is more day trading / technical and is far removed from the fundamentals of your other questions.

As for the move today if you do a simple comparison with the FTSE 100 you can see they were essentially in lock-step since lunch.
It's just overall market movement driven by the Fed mostly today.

The Berenberg downgrade is too long ago now to be having an impact.

[avinalarf]

DonkeyApple said:

And when does Gap change its pricing? they analyse every bit of data and know when to do it, by how much and what increase in turnover it will generate.

Corner shops can alter pricing because they have a large percentage of one off passing trade that needs something at that moment. Another pricing action is on fags and booze over a Budget.

Prices move regularly and it's always for a reason whether responding to immediate sell side or buy side conditions and as Walm says, you just need to dig down to find the reason.

With abf.l it's probably more pertinent to look for why it was sold of just before 2pm rather than why it has recovered?

With respect ,I don't agree with your argument of product pricing,however that's a bit off topic to that which I wanted to discuss,albeit there are certain similarities.
I'm not saying that Gap don't study data,I am saying that it's product pricing is confused and not an a asset to the company,long term.
Take Uniglo,for instance,it is now competing with Gap on similar turf,no special offers or reductions every few weeks,just seasonal sales.
I could go on but I'll leave it at that.

[avinalarf]

walm said:

ABF trades c.750k shares a day often >1m.
Not sure I would be worrying about any individual "big" ones.
Most people just use algos (computers to trade through the day) or blocks in the dark pools (off exchange deals done for larger volumes).

What you are talking about is more day trading / technical and is far removed from the fundamentals of your other questions.

As for the move today if you do a simple comparison with the FTSE 100 you can see they were essentially in lock-step since lunch.
It's just overall market movement driven by the Fed mostly today.

The Berenberg downgrade is too long ago now to be having an impact.

Thanks Walm.
I'm looking at the share closely,wondering whether to take my profit or keep it.
I bought to hold long term,however a bird in the hand.....
I can't decide if I should sell,and bank the profit, and then buy again.
I'm also thinking about the stamp duty,but maybe I should just suck that up.
What would you do ?

[Dave350]

Dave350 said:

Now at 84p.

Boohoo have a £5m option to buy 'Pretty Little Thing' which is currently run by the family of one of Boohoo's founders which expires in March 2017. PLT is currently trading at over £30m Revenue and is doing well in America as well as benefitting from exports with the current £ in USA.

I'm backing this to tip over £1 now. I will sell up most likely in March when they have hopefully used their option to buy PLT.

Now at 92p.

Option still not activated for PLT so plenty of room to go in it. £1 is inevitable.

[walm]

avinalarf said:

Thanks Walm.
I'm looking at the share closely,wondering whether to take my profit or keep it.
I bought to hold long term,however a bird in the hand.....
I can't decide if I should sell,and bank the profit, and then buy again.
I'm also thinking about the stamp duty,but maybe I should just suck that up.
What would you do ?

I am a fundamental investor.
This means I spend a LOT of time trying to get comfortable with the INTRINSIC value of a business.
What is the REAL cash generation potential for the assets and where is growth coming from and how fast for how long…
What are the risks from competition, regulation, short term trading, other macro issues etc…
After all that I compare with similar assets, look at the valuation history and try to take a longer term view on what is the RIGHT amount to pay for these assets.
That gives me a share price target which I think might be reasonable to achieve over 2-3 year time horizon.
If the upside to that target is sufficient and as long as there isn’t something more attractive already filling the portfolio I would build a position.
(Not forgetting all the other factor risks or sector focus of the existing positions in the portfolio – do we really want more UK retail, is it worth having commodity exposure, US growth preferred over EU etc….)

From that point I would be adjusting the share price obviously in real time, and checking for newsflow or ANYTHING that might change the assumptions behind my valuation.
That gives me a new target with a new upside given the share price move.
If the thesis still generates above the hurdle rate return then I keep my position or reduce/remove it if the upside is no longer enough.

So what is your target for ABF?

[avinalarf]

walm said:

I am a fundamental investor.
This means I spend a LOT of time trying to get comfortable with the INTRINSIC value of a business.
What is the REAL cash generation potential for the assets and where is growth coming from and how fast for how long…
What are the risks from competition, regulation, short term trading, other macro issues etc…
After all that I compare with similar assets, look at the valuation history and try to take a longer term view on what is the RIGHT amount to pay for these assets.
That gives me a share price target which I think might be reasonable to achieve over 2-3 year time horizon.
If the upside to that target is sufficient and as long as there isn’t something more attractive already filling the portfolio I would build a position.
(Not forgetting all the other factor risks or sector focus of the existing positions in the portfolio – do we really want more UK retail, is it worth having commodity exposure, US growth preferred over EU etc….)

From that point I would be adjusting the share price obviously in real time, and checking for newsflow or ANYTHING that might change the assumptions behind my valuation.
That gives me a new target with a new upside given the share price move.
If the thesis still generates above the hurdle rate return then I keep my position or reduce/remove it if the upside is no longer enough.

So what is your target for ABF?

I have quite a way to go before I have put in the research that you have,but fully acknowledge that your post is spot on.
As I have said,being cautious by nature,I am only buying shares in a company whose business model I understand.
The problem ,for me,with ABF is,as a conglomerate, it has other interests apart from Primark that will affect the share price.
Frankly ,because I have not done the homework that you have,I have purchased the shares on the belief that the Primark side of the company is very sound and I see no reason why it should not remain so,subject to ,as yet,new competitors.
I visit the stores weekly and like what I see.
My target price would be 3500p but this is based on previous share performance and my knowledge of their operation and not on the technical research that you do.
The share has now reached circa 3160/70 and, based on nothing more than watching the recent share movements, I feel it may have run out of steam,for the moment and may decline to say 3130/50 for a while.
The question I would like you to consider is this.....
Would you bank the profit and then buy again,if and when I felt the time was right or just hang in and keep it,obviously subject to what's going on in general.
I am not trying to time the market,as such,just wondering if it is "good practice" to bank a reasonable profit.

Edited by avinalarf on Friday 9th September 09:42

[R8Steve]

avinalarf said:

I have quite a way to go before I have put in the research that you have,but fully acknowledge that your post is spot on.
As I have said,being cautious by nature,I am only buying shares in a company whose business model I understand.
The problem ,for me,with ABF is,as a conglomerate, it has other interests apart from Primark that will affect the share price.
Frankly ,because I have not done the homework that you have,I have purchased the shares on the belief that the Primark side of the company is very sound and I see no reason why it should not remain so,subject to ,as yet,new competitors.
I visit the stores weekly and like what I see.
My target price would be 3500p but this is based on previous share performance and my knowledge of their operation and not on the technical research that you do.
The share has now reached circa 3160 and, based on nothing more than watching the recent share movements, I feel it may have run out of steam,for the moment and may decline to say 3100,for a while.
The question I would like you to consider is this.....
Would you bank the profit and then buy again,if and when I felt the time was right or just hang in and keep it,obviously subject to what's going on in general.
I am not trying to time the market,as such,just wondering if it is "good practice" to bank a reasonable profit.

How can you judge good value just by visiting the stores and liking what you see though? That's crazy.

If you think it has ran out of steam and will decline from here of course it's good practice to take profits, why would you sit and watch your profit deteriorate?

[avinalarf]

R8Steve said:

How can you judge good value just by visiting the stores and liking what you see though? That's crazy.

If you think it has ran out of steam and will decline from here of course it's good practice to take profits, why would you sit and watch your profit deteriorate?

1) because I know a good retailing business when I see one.
2) because I bought the shares as a long term investment and I don't really want to knee jerk on short term factors.
3)please tell me how you would judge whether to buy a retailers shares ?

[R8Steve]

avinalarf said:

R8Steve said:

How can you judge good value just by visiting the stores and liking what you see though? That's crazy.

If you think it has ran out of steam and will decline from here of course it's good practice to take profits, why would you sit and watch your profit deteriorate?

1) because I know a good retailing business when I see one.
2) because I bought the shares as a long term investment and I don't really want to knee jerk on short term factors.
3)please tell me how you would judge whether to buy a retailers shares ?

From what i see though you're not even taking mCap into account?

It's all very well knowing a good retailing business when you see one but without delving into the books how can you know it's good value?

What about debt? Does it have any? Is it manageable? Is it actually making any profit?

I'm not having a dig but do you know the answers to these?

[klmhcp]

avinalarf said:

I have quite a way to go before I have put in the research that you have,but fully acknowledge that your post is spot on.
As I have said,being cautious by nature,I am only buying shares in a company whose business model I understand.
The problem ,for me,with ABF is,as a conglomerate, it has other interests apart from Primark that will affect the share price.
Frankly ,because I have not done the homework that you have,I have purchased the shares on the belief that the Primark side of the company is very sound and I see no reason why it should not remain so,subject to ,as yet,new competitors.
I visit the stores weekly and like what I see.
My target price would be 3500p but this is based on previous share performance and my knowledge of their operation and not on the technical research that you do.
The share has now reached circa 3160/70 and, based on nothing more than watching the recent share movements, I feel it may have run out of steam,for the moment and may decline to say 3130/50 for a while.
The question I would like you to consider is this.....
Would you bank the profit and then buy again,if and when I felt the time was right or just hang in and keep it,obviously subject to what's going on in general.
I am not trying to time the market,as such,just wondering if it is "good practice" to bank a reasonable profit.

Edited by avinalarf on Friday 9th September 09:42

I'm just a retail investor but this is madness.
You're looking at stores as making assumptions (no consideration of anything at all other than a feel of how busy they are) to profitability.
You've then assumed that you're better placed, from an information POV, than the rest of the market and have somehow found an undervalued stock.
You've then calculated a future stock price based on absolutely nothing but 'get feel' and are contemplating how this might reflect against your target price, which again is based on nothing at all.

Honestly, I'm not trying to be rude at all, you really need to consider your own financial intelligence in this. You appear to know little to nothing and yet are extrapolating a huge amount from that.

If you've made some money, why not just bank it.

[avinalarf]

klmhcp said:

I'm just a retail investor but this is madness.
You're looking at stores as making assumptions (no consideration of anything at all other than a feel of how busy they are) to profitability.
You've then assumed that you're better placed, from an information POV, than the rest of the market and have somehow found an undervalued stock.
You've then calculated a future stock price based on absolutely nothing but 'get feel' and are contemplating how this might reflect against your target price, which again is based on nothing at all.

Honestly, I'm not trying to be rude at all, you really need to consider your own financial intelligence in this. You appear to know little to nothing and yet are extrapolating a huge amount from that.

If you've made some money, why not just bank it.

All good points......grateful for your input.....
You are correct,my approach is naive and based on purely my experience of running a successful retail operation.
Please explain the calculations I should be making before purchasing a retailing share ?
Where am I going wrong when I look at a company,appraise their competition,their performance and make a judgement.
What do you consider to be the target price for ABF over the next 3 years and why ?

[R8Steve]

avinalarf said:

All good points......grateful for your input.....
You are correct,my approach is naive and based on purely my experience of running a successful retail operation.
Please explain the calculations I should be making before purchasing a retailing share ?
Where am I going wrong when I look at a company,appraise their competition,their performance and make a judgement.
What do you consider to be the target price for ABF over the next 3 years and why ?

Your retail experience, which i don't doubt, in this instance is only telling you what this one store is doing on a hunch though.

How do you know they are making a profit? Even the most efficient and busy looking businesses may not necessarily be making a profit. Worse still they could be deep in debt.

You need to look further into the business to find this out. Look at price to earnings, price to book, price to sales, price to cash flow, debt and how it is structured, dividends, assets...the list goes on.

[walm]

avinalarf said:

Where am I going wrong when I look at a company,appraise their competition,their performance and make a judgement.

Good businesses don't always make good investments.

In fact more often than not, terrible businesses can make fantastic investments...
Say making electric cars from scratch with no history and yet to turn a profit? 1000% return.
What about selling lots of stuff and making absolutely no profit at all (GOOG)? 200% return in 5 yrs.

The problem you are facing is that everyone and their dog knows that Primark is a great business.
The more important question is what is that great business worth?
And perhaps even more important is "where are expectations?"
Last time I looked the sell-side was expecting something like 15% store growth for over a decade, combined with solid LFLs and probably a nice margin kicker on top.
So for a real chance of beating its all time high stock price (your target - coincidence?) they need to BEAT those expectations.

[klmhcp]

avinalarf said:

klmhcp said:

I'm just a retail investor but this is madness.
You're looking at stores as making assumptions (no consideration of anything at all other than a feel of how busy they are) to profitability.
You've then assumed that you're better placed, from an information POV, than the rest of the market and have somehow found an undervalued stock.
You've then calculated a future stock price based on absolutely nothing but 'get feel' and are contemplating how this might reflect against your target price, which again is based on nothing at all.

Honestly, I'm not trying to be rude at all, you really need to consider your own financial intelligence in this. You appear to know little to nothing and yet are extrapolating a huge amount from that.

If you've made some money, why not just bank it.

All good points......grateful for your input.....
You are correct,my approach is naive and based on purely my experience of running a successful retail operation.
Please explain the calculations I should be making before purchasing a retailing share ?
Where am I going wrong when I look at a company,appraise their competition,their performance and make a judgement.
What do you consider to be the target price for ABF over the next 3 years and why ?

I'm not jumping through your hoops, I think individual stock picking (for price gains rather than divis etc) for amateurs like us is a total blind gamble - I'm just saying that you appear to think you know something the market doesn't.

If you're buying stock because you think the price is lower than it should be, you are saying that you know more than every other investor out there. I put it to you that you don't and that you are guessing.

[avinalarf]

walm said:

Good businesses don't always make good investments.

In fact more often than not, terrible businesses can make fantastic investments...
Say making electric cars from scratch with no history and yet to turn a profit? 1000% return.
What about selling lots of stuff and making absolutely no profit at all (GOOG)? 200% return in 5 yrs.

The problem you are facing is that everyone and their dog knows that Primark is a great business.
The more important question is what is that great business worth?
And perhaps even more important is "where are expectations?"
Last time I looked the sell-side was expecting something like 15% store growth for over a decade, combined with solid LFLs and probably a nice margin kicker on top.
So for a real chance of beating its all time high stock price (your target - coincidence?) they need to BEAT those expectations.

1) what is GOOG ?
2) your e car analogy.....well,buying those shares......a company with no proven track record...wouldn't that be based on a hunch and quite a few guesses at other factors e.g.government intervention,fuel price etc.
3) Primark,you agree,is a "great business", and based on my knowledge of retailing why should I not buy it ?
4) What is it worth ? .....well surely the markets and profits and performance will decide that..
5) BTW it's all time high was over 3600p but I'd agree my target was not based on much else.

I'm really getting beaten up on here ,but that's ok because I understand why and welcome the comments.

The way I figure it is....if a business has a proven business model.....is run by a competent board ......is returning profits.....is investing in long term growth......what's not to like ?
Obviously st happens....new competition.......loss of focus.....global influences etc.
As an example I bought into Sports Direct but sold ,at a profit, because I didn't have faith in the character of MA ( no disrespect ) and his motivation, long term.
Long term, if he was prepared to be less hands on I believe the company would be better off.

[walm]

avinalarf said:

1) what is GOOG ?
2) your e car analogy.....well,buying those shares......a company with no proven track record...wouldn't that be based on a hunch and quite a few guesses at other factors e.g.government intervention,fuel price etc.
3) Primark,you agree,is a "great business", and based on my knowledge of retailing why should I not buy it ?
4) What is it worth ? .....well surely the markets and profits and performance will decide that..
5) BTW it's all time high was over 3600p but I'd agree my target was not based on much else.

I'm really getting beaten up on here ,but that's ok because I understand why and welcome the comments.

The way I figure it is....if a business has a proven business model.....is run by a competent board ......is returning profits.....is investing in long term growth......what's not to like ?
Obviously st happens....new competition.......loss of focus.....global influences etc.
As an example I bought into Sports Direct but sold ,at a profit, because I didn't have faith in the character of MA ( no disrespect ) and his motivation, long term.
Long term, if he was prepared to be less hands on I believe the company would be better off.

Ooops - meant Amazon - not Google!

[klmhcp]

avinalarf said:

The way I figure it is....if a business has a proven business model.....is run by a competent board ......is returning profits.....is investing in long term growth......what's not to like ?

It's a marketplace - the price you pay per share isn't directly related to the profits they make but on the market's interpretation.

[DonkeyApple]

avinalarf said:

1) what is GOOG ?

Just do a quick search on Google.