Follow-up on HSBA and CPR

Having being 100% right on my last post, I now find myself being 100% wrong. I am reminded of the joke about the scientist: “Our new drug showed an efficacious effect on one third of our chicken test subjects, little or no improvement on another third of our chickens, and I’m afraid the last chicken ran away.”

Six months ago, I was bearish on both HSBA (HSBC) and CPR (Carpetright), and promised to write up about their subsequent performance.

On HSBA, I wrote:

The reaction to the trading statement suggested that it was likely to be a busted trade.

An alert was triggered earlier today, indicating that the price fell below that, so I sold. I managed to achieve a little over 645p, dealing costs included. So I lost 2.1% on the trade. Disappointing, but of course less disappointing if the shares decline more.

So, to sum up, I had concluded momentum was lost, and I expect further declines in the share price thereafter.

The shares now trade at 742p, so I lost out on a considerable potential gain.

On CPR, I wrote:

What attracted me was the likelihood of momentum reversal. It’s momentum score is 14. A mere glance at the chart shows you that momentum is bad in any event. Its value score is 87. So here we have an interesting situation. The shares are cheap, the momentum has been bad in the past, but it is now trading above its 50dMA in what appears to be a reversal of trend. What’s more, on 31 Jan 2017, it issued its Q3 trading update, which raised the share price 8.8%.

CPR reminds me of DTG (Dart): terrible momentum, cheap, but with a trading update that caused a re-assessment of the company.

So I am going to stick my neck out and say that I expect the share price of CPR to be higher in 6 months time than it is now.

Alas, it was not to be. The shares traded at 208p at the time, and now trade on 194p. The shares have languished over the last 6 months. Its value score has been reduced to Stockopedia 76. Paul Scott had this to say at the end of June:

this share looks quite good superficially. However, it’s the type of share where, the more you dig into the numbers, the less impressive it looks.

There have been no divis paid since 2011 either, which isn’t good. Although a small divi is forecast for the new year.

Look how brokers have been steadily revising down forecast EPS in the last year, which hardly seems to be a business in rude health, does it?

So, not much to be excited about, especially since its overall StockRank score is an indifferent 50.

Stay safe out there.

About mcturra2000

Computer programmer living in Scotland.
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