Hirco Share Discussion Threads

[alchemy30] 10/11/2011 11:06

Massive writedown

[jaws6] 10/11/2011 11:05

news today tells why they were selling

[nilip] 08/11/2011 16:18

Hmmm ...

Few sellers starting to appear again now ...

[nilip] 02/11/2011 16:37

L2 showing great strength in last few minutes before close.

Nice to see this one starting to tick up steadily on the quiet.


(edit - Kenny - thanks for the reply)

[hugepants] 30/10/2011 20:35

Now Weiss have a seat on the Board they presumably cannot buy shares now since in a closed period leading up to the final results?

[tilusha] 24/10/2011 15:39

Seems to be ticking back up again guys ...

Quite a bit of buying interest today - buys appearing on plus also.

[praipus] 21/10/2011 09:42

Hi Kenny,

DGRE story fascinating who were the major shareholders there?

You may be interested in the "Tracking the Arbitrageurs" thread your input on systematic deep value investing would be welcome.

[kenny] 20/10/2011 21:31

nilip - I do think HRCO will still exist in 2021 albeit it may have been taken over and have new owners. As Weiss have paid up to 67p per share and I trust their judgement - because they are value investors following Ben Graham's principles - I am content to be patient and await events. That is not to say I have not carried out extensive research myself, because I have.

As for delisting, one of my very best investments I held and continue to hold is shares in a company that delisted in July 2009; called Delek Global Real Estate (DGRE). Since delisting the shareholders have had 8 dividends – totalling 50% of the price at delisting – and 3 share buybacks totalling 75% of my purchase price. Even after the buybacks, I retain a substantial investment likely to pay me 17% per annum in dividends (or 100% return on the basis I have, to date, received all my original capital plus 21% - excluding the value of my remaining holding).

Therefore, if the circumstances are right a delisting should hold no fear for an investor – as Warren Buffet said; invest as if the stock market will be closed for 5 years after you invest. He also said; in the short term the stock market is a voting machine but in the long term it is a weighing machine.

The DGRE story might sound a great outcome but it was scary too at times and it took a long time to come good. To see shares I had bought at 82p go to 19p within 18 months; to subsequently reject an attempt by the main shareholder to apply pressure to acheive a buyout on the cheap at 50p under threat of a) delisting and b) never paying another dividend post delisting, and hold on through all that is not easy on the nerves.

Also, I really should not have invested as much as I did or kept buying as the share price went down. However, like HRCO, Delek is a property company so I knew the assets were there it was just a question of when the shareholders would benefit from those assets, importantly, the question was never would they benefit from those assets.

So weigh everything up and stay invested if HRCO meets your personal investment criteria but sell your shares if it does not. If you sell, learn from it, in particular re-examine the factors that lead you to buy in the first place in order to tease out the error in that buy assessment. In my early days of investing I too was swayed by short term price movements and emotional sentiment.

I cannot tell you when a shareholder in HRCO will benefit partially or wholly from the NAV of 550p. I can assure you they will eventually because that value is there and, unlike a trading company, the value of the property may go up and down but it is unlikely to depreciate to nil. That "eventually" seems to be 2021 at the latest and it seems to me that at the 62p average I paid for my holding, I have a sufficient margin of safety.

You will note that my average price of 62p looks silly compared to today's buy price of about 55p. I freely confess I am hopeless at market timing (for which also look at the DGRE story above). Market timing, short term investing, shorting, derivatives etc is not my area of expertise and neither do I wish to get involved in gambling rather than investing. I am also not a great believer in charting. The things I look for are high yield shares or, as with HRCO, being able to buy a £1 for a lot less than a £1 when it is combined with a near certainty of realisation of value at some future date (even if that exit is post a delisting).

[nilip] 20/10/2011 15:21

darlost,

The ONLY reason I still hold a few is because Weiss hold - not sure if that's a good enough reason as I think Burnage may well be right in his post above.

I get the feeling Weiss may well be expressing the same sentiments towards HRCO as Laxey's - Laxey's have already tried to exercise a shareholder revolt against HRCO, to no avail it seems.

[darlocst] 20/10/2011 13:13

nilip, I very much doubt there is a "high" chance of delisting. You'd be better off paying attention to the last two director appointments, the Weiss holding, the forthcoming valuation report and legal action that HRCO will bring against the Hiranandani Family.

[kenny] 20/10/2011 11:58

nilip - but if a "full realisation" transaction, of whatever type, gives rise to 550p per share, what then is the annualised return over that period?

[nilip] 20/10/2011 11:21

"The Hiranandani Family are on record as saying it may not be until 2021 before any distribution is made"

[kenny] 20/10/2011 10:37

We investors in HRCO need a lot of patience and then a bit more patience. The Hiranandani Family are on record as saying it may not be until 2021 before any distribution is made. That is one extreme and it is hard to know what the other extreme might be e.g. 6 months, 1 year, 2 years. Whatever the time scale the potential payout will likely match the level of patience required!

Everyone wishes to make a profit within a few weeks or months; what happened to investing for the long term?

[hugepants] 20/10/2011 10:23

I think you should stop thinking. This dog isn't going anywhere.

[nilip] 20/10/2011 10:05

Close to the 50p support.

[horndean eagle] 13/10/2011 12:49

Management have been pretty incompetent at HRCO. Weiss coming on board might try and seek a settlement with the Hiranandani's by possibly selling their stake to them. Would probably accept 150p. The scum won't likely be interested though. They want to try and screw us out of everything. Not sure they will succeed now that we have enough cash to last us for a while.

[burnage] 13/10/2011 12:32

Sounds like desperate measures to me ?

I think we can safely conclude that Weiss don't have any faith in HRCO's management.

[praipus] 12/10/2011 18:08

Weiss man on the board !!!



( )

[nilip] 05/10/2011 17:27

Praipus,

Apologies no intention to mislead or misinform.

I was of the understanding that given the under handed behaviour (seemingly so) of HSBC and the recent sudden resignations of 2 board members in July and unexplainable involvement of the 'family' in the company's goings on and ... not forgetting the company's very visible dispute with their shareholder LHV and the following EGM ... I honestly thought there was some form of litigation (legal disputes) going on in the background between certain parties and mgmt ??

[praipus] 05/10/2011 13:10

Nilip (or anyone else who knows) what is the legal situation here that Nilip refers to?

[tilusha] 05/10/2011 12:27

Investors ignore India's corruption at their peril

by Chris Marshall on Sep 23, 2011 at 10:22


The stories posted on ipaidabribe.com, the Indian anti-bribery website, arrive at an astonishing rate. Whether it is a bribe paid to a customs officer, a policeman or for a birth certificate, India's day-to-day corruption problem is writ clearly.

No country is immune from corruption, least of all India's BRIC peers China and Russia. But for the world's largest democracy, rectifying corruption – big and small – has become its 'defining challenge', one that could even prevent it becoming an economic superpower: it is fuelling inequality, damaging the country's ability to improve its failing infrastructure, deterring investment and distorting the property market.

Though it may be harder to measure than economic and market fundamentals, for foreign companies and investors seeking to profit from India – let alone the people for whom it's a daily blight – it can be crippling.

Yet investors' minds have been elsewhere. India's rampant inflation of near 10% – one of the highest rates in the world – has meant many investors have kept their distance, waiting for solutions from the central bank.

But veteran Asia investor Hugh Young reckons the corruption is the greater concern. 'I think that in terms of trends, speaking as a cynic, interest rates go up and interest rates go down, but the most important thing for a country is to have proper governance in the broadest sense of the word,' said Young, managing director of Aberdeen Asset Management Asia.

Chris Dixon, of risk analysis outfit Maplecroft, agrees: 'Corruption is probably the most critical issue that India has to address at the moment'.

In fact, corruption and inflation feed off each other. The link is clear: the price that is paid for goods, to start an investment project for example, is jacked up. Conversely unscrupulous officials see inflation as providing opportunities for deception.

A volatile inflation reading in particular can make over-charging easier, academics have shown. Campaigner Anna Hazare, whose anti-corruption campaign has garnered rising support and forcing the crisis-struck government into action, also points to this link.

Bribe taking and other methods tend to get worse in an economic downturn, when times are tougher. But it works the other way as well: India's rapid economic growth in recent years has given rise to deep income inequalities.

Even before the downturn commentators point to a steady worsening of corruption in India, particularly since the liberalisation of its economy of the 1990s, fuelled by a predatory political elite.

'We need transparent measures and a proper judicial system, for example, and that is really what is important and that is not what we are really getting,' Young said. 'The government has obviously been quite helpless and that is one of the biggest disappointments,'

Democratic systems have long proven themselves capable of sheltering crooked politicians – you need look no further than Britain to find evidence of this. As a result, the latest fad among academics gives good governance primacy over the principle of democracy.

India's growing urban middle class are becoming alert to the inadequacies of their much hailed political system. A recent survey by CSDS, a Delhi-based think-tank, found 66% of urban India – which is where the economic growth is coming from – believed the federal government is corrupt. In fact, the whole world has become more aware of it with, as Dixon says, 'high profile corruption cases popping up every day'.

Now the question is whether the 74-year old Hazare's efforts represent a turning point in the fight against corruption or not. Critics say deeper reforms are needed.

One thing is certain though, the popularity of Prime Minister Manmohan Singh's government has fallen sharply as the opposition wields its inability to tackle corruption as a political weapon.

As Dixon observes, the economic potential of India still far outweighs the risk of corruption – for now. But investors ignore the impact of corruption in India at their peril.

[envirovision] 05/10/2011 12:04

Indians huh !

[muffster] 03/10/2011 18:13

Just bought in too, expecting upwards movement once results released. Always carry a stop loss, because if it goes wrong, then your whole investment portfolio may not breakeven for years!

[nilip] 03/10/2011 16:50

kenny,

Lots of dodgy goings on behind the scenes so it could fall much lower but ... sod it ! ... long term play ?

I think HSBC have fiddled this one big time.