Crikey. Just looking through some Stockopedia stats, and I notice that IMB (Imperial Brands) is on a P/FCF of less than 10. I’m not surprised that it’s in Woodford’s portfolio.

Debt is more than can be recommended for a “low price, low debt” portfolio, but still, less than 10.

I have this dog in my portfolio. It’s down 29%.


Posted in Uncategorized | Leave a comment

MOSB – Moss Bros – Trading Update

Mens tailors MOSB (Moss Bros) issued a trading update today, sending the shares down 28% to 43.5p as of writing. The RNS contained the fateful words:

the Board now anticipates that the Group will deliver profit at a level materially lower than current market expectations.

They cite stocking problems, difficult hire sales, and lower footfall.

The full year dividend will be lowered to 4p, from 5.89p. Stockopedia shows that MOSB has a dividend yield of 9.6%, which is an emphatic sign that the dividend was vulnerable.

Stockopedia gives MOSB a Quality Score of 90, a Value of 94, and a Momentum of 5. I think these scores are based on yesterday’s figures.

I think it’s worth pointing out that, although momentum is a contentious issue among investors, a score of 5 should have been taken as a stern warning that the market was seeing something seriously wrong.

During 2018 this market is doing my head in! Companies large and small are being eviscerated for any misstep. The broader market is not too bad, but individually, there are nightmares. Companies like MCRO (Micro Focus) AA, CPI (Capita), IRV (Interserve), and on and on, all being ripped to shreds.

I am actually wondering if all this is actually the early stages of a bear market, and that we’ll begin to see less “breadth” in the market, shunning the poor performers, and concentrating on the winners.

Dunno. But things aren’t pretty. It’s like treading through a minefield.

Stay safe out there.


Posted in Uncategorized | Leave a comment

BMY – a little note

Book publisher BMY (Bloomsbury) announced an after-hours RNS yesterday, stating:

> revenues are slightly ahead of expectations, profits will be well > ahead of the Board’s expectations. … net cash balance is now > expected to be around £25m, significantly ahead of expectations. The shares are up 8.5% (as you might expect!) to 181.7p.

Stockopedia reports that Its P/FCF (price to free cashflow) is 9.1, it has net cash, and its dividend yield is 4.3% and its Stock Rank is 99.

I had tweeted yesterday that I thought an easy way of making money would to be to buy stocks of a P/FCF, PBT < net debt/3. A high dividend yield (say above 3%) is also a bonus.

BMY meets such criteria. It’s nice to see a welcoming market reaction from news, too.

I hold this (at 190p), and this looks a pretty solid buy.

Let’s follow this up in a year’s time, see how we’re doing.


Posted in Uncategorized | Leave a comment

DLAR (De La Rue) in the doghouse

Money print DLAR (De La Rue) drops 18% today to 489p. The RNS announces the resignation of one of the directors, and

is currently expecting the result to be around the lower end of the current consensus range.

So, the market is preempting a disaster on this one.

I dabbled in DLAR years ago. I can’t remember the prices involved, but I think I lost money on them. The prices seemed to be higher at the time.

The markets are BRUTAL at the moment. Any sign of weakness, and a company is torn to shreds. Market cap has been no protection. The 52 week hight of the Footsie is 7793, now down to 7061. That barely qualifies as a correction. I’m not sure where all this is heading. It might be a good sign, of course, because all this brutality means that the markets are at least thinking about risk, rather than getting carried away with pie-in-the-sky projections.

Apparently it’s International Day Of Happiness. So, may you all be happy!

Stay safe out there, and have a good one.

Posted in Uncategorized | Leave a comment

Mr Market is in an unforgiving mood lately

The market seems to be ruthless the last few weeks, and quick to deliver a smackdown where things have gone wrong.

I was shocked to find that MCRO (Micro Focus Int’l) was down 53% to 881p today. It has a niche is in COBOL. I had mostly considered it to be a high-quality company. However, Stockopedia gives it a quality score of 70, which is not especially high. The ROCE for the last three years has been about 7%, so it seems that my ongoing perceptions were off the mark. Net debt in relation to pre-tax profits also seems to be high; although Stockopedia does put the bankruptcy risk in the “safe” zone.

I think, as investors, we need to be very careful about the debt levels of the companies we invest in. The market is being being unkind to those that look somewhat over-leveraged.

Here’s what’s in the trading update:

Since the interim results on 8 January 2018, the rate of year-on-year revenue decline has been greater than anticipated


The recent revenue performance is primarily due to lower than expected licence income and is a result of a number of factors, which management believe to be largely one-off transitional effects of the combination with HPE software, rather than underlying issues with the end market or the product portfolios.

Stockopedia currently shows that MCRO has a PE of 11. So it must have stood at about 22 as of yesterday. So it is perhaps understandable that the share price was vulnerable to any setbacks. I find the 53% drop surprising, though. It is not a minnow of a share: it has a market cap of £8.2b.
I see that MCRO reported its interims on 8 Jan. It showed an 80% increase in revenue, but with basic EPS down 9.5%. As if by magic, though, the “adjusted” EPS is up 16%. Debt has ballooned from $1.6b to $4.2b.

It seems that ROCE is deteriorating and debt is declining. Maybe MCRO are paying over-the-odds for acquisitions.

The shares took a caning on the issuance of the Jan RNS, and was basically everyone’s cue to get out.

There’s no real insights on the boards, as far as I can see, although I did spot mentions of the debt levels a few times.

I would have thought that there’s an opportunity to catch a bounce in the shares. I don’t see any immediate danger to the company.

I won’t be considering this share for my portfolio, though, as I don’t like the debt levels.

Let’s see, what else …

CPR (Carpetright) is down 11% to 49.2p. There doesn’t seem to be any news out. I see from the boards that there’s talk of PCR going into CVA (Company Voluntary Arrangement). Stockopedia gives it a Quality score of 30, a value score of 92, and a momentum of 2, and classifies it as a value trap. This one looks like it could credibly go kaput.

MTC (Mothercare) is down 10% to 15.28p. This thing seems to be getting sicker and sicker. No RNS seems to be out today. The All-Share is down 1% today, so perhaps the markets are in no mood to tolerate weakness. I should have thought that MTC’s days are numbered, although it has managed to crawl its way along for a surprisingly long time.

MCLS (McColls Retail Group) is another company in the doghouse, being down 9% to 236.5p. No RNS, either. It’s another company that has far more debt that I am currently willing to invest in.

Interest rates are benign at the moment. I dread to think what happen if they were raised substantially. I think we could see a massive clear-out of companies, with a much greater focus on balance sheets.

What a day! I’m down 0.7% so far; more than the midcaps, less than the Footsie. Drats! Oh well, at least I’m not having the snot kicked out of me.

Stay safe out there.

Posted in Uncategorized | Leave a comment

PZC – top faller so far

PZC (PZ Cussons) issued a trading update today, causing the market to fall 20.2% to 222.2p as of writing.

The killer statement was:

At the time of our interim results announcement in January, we reported that performance in the first half of the year had been constrained by trading conditions in the UK and Nigeria, and that delivery of the full year result would be dependent on trading conditions in those markets for the balance of year.

It is now apparent that profit for the full year will fall short of expectations and the board anticipates that profit before tax will be in the range of £80 million – £85 million.

This is a share where I did not dodge a bullet! I bought the share in Dec 2015 at 319p. I figured it for a long term buy and hold, and thought that its quality justified its fairly lofty valuation. However, subsequent trading performance fell below what the valuation would support.

The announcement in Jan was basically your tip-off to bail out. Unfortunately, I ignored the warning, figuring it was “for the long term”.

I have decided to follow my rule of bailing out of a share that drops 10% in a day on a poor trading statement, and sold at 230p.

A painful experience.

Stay safe out there.


Posted in Uncategorized | Leave a comment

ALU dives today

Crikey. What a day.

ALU (Alumasc) dives 18.7% today to 137p after issuing a trading statement:

> Alumasc has so far experienced a slower than expected third quarter > performance, both in terms of revenue and order intake…. In view of > all the above, the Board’s latest forecasts are that group revenues > for the year ending 30 June 2018 will be 4-5% below previous > expectations, with a consequential reduction in previously expected > underlying profit before tax of around 15%.

I actually bailed out of these in Feb at 157p after it issued some poor results. I seemed to have timed it expertly to sell at the bottom. I kicked myself as the shares recovered quickly thereafter. In retrospect, I needn’t have been so hard on myself.

It turned out that the market’s ugly reaction to the results issued in February was a sign of things to come. In general, I don’t like it when the market doesn’t like the results, and I think it’s generally a good idea to follow the market lead. it’s not foolproof – there are plenty of exceptions – but I think that, on balance, it’s a good rule to follow.

I originally bought them at the beginning of 2016 at 192p.


Posted in Uncategorized | Leave a comment