Professor Glen Arnold

Connect Group – a dangerous-looking balance sheet, but good cash flow

27 Mar 2020 @ 12:39
Connect Group (LSE:CNCT) has not had an attractive-looking balance sheet for many years. It had/has very high levels of intangible assets, especially goodwill, due to paying excessive prices for acquisitions. Even after including those doubtful “assets” in its balance sheet it could barely report a positive net current asset value.  On top of that, it […]
 

Connect Group – the Tuffnells business

26 Mar 2020 @ 12:52
In 2014 the big idea at Connect Group (LSE:CNCT) was to diversify into parcel delivery and at the same time gain synergy with the early morning News Distribution business by buying Tuffnells for £121m. Here are the performance numbers for Tuffnells under Connect’s ownership – not pretty reading for shareholders who forked out £121m. £m   […]
 

Connect Group – The Smiths News business

25 Mar 2020 @ 12:56
Connect Group’s (LSE:CNCT) Smiths News produces profits and lots of cash flow year after year because it is a duopolist (alongside Menzies) delivering newspapers and magazines to shops.  The duopolists tend to stick to their own territories when allocating their vans – it is pointless having two rivals vans passing each other in rural Norfolk […]
 

Connect Group – a history of earnings

24 Mar 2020 @ 12:51
Connect Group (LSE:CNCT) has one business generating an operating profit north of £34m.  For a £37m market capitalisation company that is a substantial amount. And this operating profit, from the Smith News newspaper and magazine distribution business, has been consistently high (2014: £40.8m, 2015: £23.2m, 2016: £34.1m, 2017: £36.1m, 2018: £25m, 2019: £36.3m, expectation for […]
 

Connect Group – I’ve doubled my holding

23 Mar 2020 @ 15:56
Connect shares (LSE:CNCT) have fallen more than most. While it was falling I examined three factors, looking for reassurance that it will be able to ride out the storm: Will its banks support it if covenants are breached due to a slowdown in revenue and cash flow? The measures put in place by the Bank […]
 

Warren Buffett, Ben Graham and Peter Lynch on stock market fluctuations

20 Mar 2020 @ 12:34
As far as I’m concerned the stock market does not exist. It is there only as a reference to see if anyone is doing anything foolish Warren Buffett It is optimism that is the enemy of the rational buyer. Warren Buffett  (B.H. 1990) If we can buy small pieces with satisfactory underlying economics at a […]
 

Views of investor who survived past market crashes

19 Mar 2020 @ 12:45
Benjamin Graham ran a fund with assets under management of £2.5m in 1929. The crash wiped out most of that.  In the Depression he pondered the meaning of “investing” as opposed to “speculation” and wrote the very influential Security Analysis book. Warren Buffett became his student in 1950. After regaining his investors’ money, between 1936 […]
 

Some calming thoughts from great investors

18 Mar 2020 @ 12:51
While value investors wait for the dust to settle we might want to ponder the thoughts of some experienced investors on market ups and downs. By dust to settle I mean understanding the new economic/business environment we are in.  There are new rules on government help, disturbed demand patterns, interrupted supply chains, psychological trauma. No […]
 

Some words of wisdom for febrile times

17 Mar 2020 @ 15:50
Great investors have seen many bad markets. And they learned from them: In certain years you’ll make your 30 percent, but there will be other years when you’ll only make 2 percent, or perhaps you’ll lose 20  That’s part of the scheme of things, and you have to accept it….If you expect to make 30 […]
 

Crashes and recoveries

13 Mar 2020 @ 15:51
I thought it might be useful to put the current downward moves in the market in some perspective, so I’ve looked up what happened to Berkshire Hathaway when its shares fell significantly and then rose again: How far did it fall and how long did it take to recover? I’ve also obtained data on the FTSE […]
 
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