Ramsdens Share Discussion Threads

[adamb1978] 27/6/2018 22:39

Hi Yump

Yep, noticed that as well. Profit warnings getting hit harder and in-line or beating earnings not being rewarded. Generally also finding that multiples appear more elevated than I'm comfortable investing at and as a consequence that I'm not able to convince myself that at least say >30% upside appears viable on a 12-18 month basis, which is the minimum that I usually need to see in a company, along with some downside protection. In fact, the latter is almost the bigger impediment which I'm finding...risk/reward balance just doesnt feel good at the moment given multiples have traded up.

In terms of whats causing it, who knows. I don't feel its a local/UK thing though - the S&P500 is flat YTD, US fiscal deficits are increasing, debt levels are sky high globally, yields are rising, 2yr/10yr treasury spread getting very tight...and US valuations are more elevated than the UK given we've had Brexit holding us back.

Interceptor2 - I generally also dont invest on macro or even sector trends as, despite what I've just said above, I dont think I've clever enough to do so. I try to look at fundamentals and the problem I have at the moment with an old bull market and elevated valuations is that if you look forward 8-10 years to the next market top, valuations will be as high and so your annualised gains between now and then will be slim. I feel that moving materially (50%) to cash at the moment risks losing another say 10% of market enthusiasm if things keep ticking up but downturns tend to kill 30%-50% of value, and even more in small caps which I prefer.

No idea whether I've done the right thing moving that much into cash or near-cash, but if you can't convince yourself that an investment is of attractive value, then better having that cash not invested.

[topvest] 27/6/2018 20:32

Lots of weak holders. I'm happy to hold. The directors are not loaded so its perfectly acceptable to take some money off the table.

[interceptor2] 27/6/2018 19:31

Like others here I have been selling out here, was lucky to be sitting at my desk and noticed the RNS yesterday, so half went then followed by some more this morning, only a small amount left now.

I would think that the Director sales are for genuine reasons but you can never tell and it was Jim Slater that always took note of Directors transactions in clusters.

Interesting to read Adam197827 that you are 50% cash and have found few new opportunities this year, it resonates with me, I am currently 60% cash and have only added two new companies to the portfolio since the start of March, I only add new position if there is a strong catalyst of which there haven't been many.

I try not to anticipate any macro event or my own opinions which I try to seperate from investing and just trade/invest each day from what opportunities present themselves, just need to be patient and wait new opportunities that have always presented themselves before. But it has been an unusual period.

[lammylover] 27/6/2018 19:26

I've dropped the CEO an email, expressing my concern and stating that CEO / Director sells normally come with an explanation to provide comfort to their shareholders that there is nothing to worry about. Will see what response I get. Rich

[yump] 27/6/2018 17:50

AdamB197827 Jun '18 - 11:11 - 748 of 751

"... starting to become increasingly unforgiving to any miss (larger price falls after negative news), and individual companies will have much less time to recover from any mishap (given that by the time they rebuild credibility my view is that we'd be quite likely to be into a downturn)"

For a while, some 'inline' results have been knocking 10% off already modestly rated share prices.

I'm having difficult working out whether the worry is already in the market - is it old worry about retail and Brexit, or as nothing dire has yet happened is it old but not dead yet.

sp movements in the last couple of years seem to have become quite violent - makes it difficult to look at charts and balance them with real results.

[lammylover] 27/6/2018 14:10

MMs drive price down again, trying to shake a few more out. Expect them to walk price back up over coming days...Rich

[igoe104] 27/6/2018 13:12

This is poor stuff from the company directors, not to explain why they sold out at the same time ? really naïve thing to do. I'm sure holders will be looking for heads to roll now at the upcoming AGM.

[greg the grinch] 27/6/2018 12:33

RE '(suggestions welcome!)'

TSTR? :o) not a x10 but I reckon an x3 over the next year or so.

Just done placing and smelter about to generate cash.

DYOR

[adamb1978] 27/6/2018 11:11

I also decided to sell out this morning after deliberating on it overnight. Meant that I actually sold at a small loss given that I was late to the party with this one.

Feels odd selling as the fundamentals look very good, and had we been at an earlier point in the cycle then I definitely would not have sold, but I've been meaningfully de-risking my investments this year to now being around 50% in cash or short-term investment grade bonds.

The cycle point matter to me not just from an overall asset allocation and risk perspective, but I also feel that the market is starting to become increasingly unforgiving to any miss (larger price falls after negative news), and individual companies will have much less time to recover from any mishap (given that by the time they rebuild credibility my view is that we'd be quite likely to be into a downturn).

The main company specific factor which the above comments got me to look into further was the sensitivity of EPS to the FX revenues. I actually think that the market forecasts are somewhat conservative if the FX business continues to grow, and in which case they could deliver say 19p EPS this year (so very low PE, esp ex-cash), but if the above comments on last year being an unusually bumper year are right then perhaps you could see something in the 12p-14p range (given FX is 100% gross margin). Given I'm not in a great position to ascertain the probability of this and my comments above re my risk appetite at the moment and Mr Market becoming more unforgiving, it felt like the prudent thing to do was sell out.

I've now moved from about 5% cash or near-cash to c.50% in 6 months and have only bought one new position this year! Struggling to convince myself that anything really represents great value at the moment (suggestions welcome!).

All the best for holders.

Adam

[shrout] 27/6/2018 10:45

one of those tricky situations where the chart is starting to say sell, recent results and divi prospects say hold, experienced message board posters are divided. Where the share price finishes today may give a good indication of future direction of travel, but I think jittery holders are at the very least owed an explanation of some kind from management.

[mrblueface] 27/6/2018 10:03

I dumped my holding here today at 8am and very pleased I did as yesterday RNS sale didn't sit right with me . I also looked at the company's reviews which most had 1 stars from customers which set alarm bells ringing for me .

[shauney2] 27/6/2018 09:06

Agree Dan.
But if anybody attending the AGM next month notices 2 or 3 Porches in the car park could the post it as soon as possible.

Yump, i think its worth looking at the growth in online for RFX.From memory jewelery sales were up 200% and click and collect forex was also well up.

[spob] 27/6/2018 09:03

re post 738


get the "vox markets" app on your phone

add/follow all your stocks in the app

you will then get a message every time there is an rns for one of your stocks

[yump] 27/6/2018 09:03

fwiw regarding retail, footfall etc.

I had a silly dabble in MTC, but apart from that don't think there's much future in larger retailers, or 'me-too' retailers (foot asylum for instance). There's an old saying that large businesses can only get smaller or something to that effect and I think that's probably the case resulting from the movement to online and its effect on the high steet.

Having said that, like everything there are going to be resilient retailers and that depends on the business models.

Apart from RFX, I have some QUIZ and PETS. Quiz because its small and growing with a business model that seems to be working, despite the 'death of the high street' headlines and PETS because its got a few USP's that other retailers don't have - I guess the next year or so will see if those really are USP's or not. Whether its a resilient market like chocolate or whether its got the retail 'bug'.

With RFX imo, their footfall is not the footfall that shops at many of the larger retailers and as Unavailable says above, I'm sure the effects of recent retail problems would have been felt or reported by RFX by now. Although of course, some of the larger retailers seemed like they were recovering, only to dive, but that I think was to do with their size and legacy.

At the moment I trust RFX to know their target markets and to know how to expand to exploit those.

[danpollard] 27/6/2018 08:57

I never take any notice of director sells or buys. I remember recently the directors of Conviviality buying bucket loads of shares a couple of days before the shares were suspended, showing they had absolutely no idea the dangerous position the company was in.

I guess time will tell whether these sells are a precursor to a fall in earnings or just directors paying tax bills, buying houses for their kids or new Porsches. I personally think it’s the latter and have added on the 4% drop first thing this morning.

I also note a poster stating the modest broker estimate for EPS this year. I personally want low and modest earnings estimates which are then easy to beat. The brokers have been too modest for the whole listed life of the company so I can see an earnings beat again. However, it’s my opinion and differing opinions make a market.

[shauney2] 27/6/2018 08:56

Just added at 166.94.

Less than 3 weeks since the last results, PBT up 60% to £6.5m,dividend up from 1.3p to 6.6p net cash up to £12.7m from £9.5m.The growth in the net cash alone would say this is not a value trap.

The directors are just doing what we all do,locking in a profit.As for it being strange they all sold together,they can hardly click a button and sell 1m shares.They have to be organised and placed.

[lammylover] 27/6/2018 08:56

Nothings changed financially, just a bit of profit taking by BOD and partners and some other shareholders, and who can blame them!

Buying Opportunity at low price for PIs imo (if you can actually get a firm price not best buy at indicated price)

good luck all holders Rich

[shanklin] 27/6/2018 08:50

Michael

Setting alerts is straightforward with investegate.

[michaeljames1] 27/6/2018 08:37

Does anyone know how to set alerts so that when news is released on Advfn on certain shares you can receive an app notification or email?

[manrobert] 27/6/2018 08:36

well the way its falling they will get their chance.never catch a falling knive!!

[michaeljames1] 27/6/2018 08:34

Yeah but that would probably be the smart thing to do, the news coming out in the middle of the day was bound to have a knock on effect this morning. The point about salaries made a lot of sense to me, when you have got 20x your salary in shares I don't blame the CEO for selling part of his holding. But it is going to make the next few days bumpy.

[unnavailable] 27/6/2018 00:01

Wouldn't we have already begun to see any effects from low footfall along with most of the retailers?. I'd imagine that would be already playing out by now.In terms of their rates, I'm not aware of any changes. They have never been the best out there but it's not been a problem before.I do agree, though that growth from FX might be an issue. They mention in the annual report that FY18 benefited from 2 pre Easter holiday periods while FY19 will have none.For some perspective, though. As it stands now, it has an EV of 40m with after tax profit last year of 5m. Current assets of 38m and total liabilities of only 10m. Net cash at 13m. And with ROCE around 20%ish, there is already value there, imo. I get the feeling from people I've seen mention that sold are watching with the intent to buy back lower.

[glasshalfull] 26/6/2018 21:46

Evening pireric,

I don’t subscribe that this may be a value trap. The company has been performing strongly and have diverse revenue streams, are cash generative, have a strong strong balance sheet & will ramp up the dividend with a decent 4.5% yield forecast in 2019.

However, I do agree with your recent commentary on the FX side of the business. They estimate they have a 12% market share in the towns where they’ve a presence & have taken market share from competitors. I feel they’ll require continued strong footfall to maintain this growth....that’s where the jury is currently out for me.

Like you I’ve also compared the exchange rates they offer as various points through the year. While many customers won’t necessarily shop for the best rates, many others will. I’ve observed that they are still towards the top of the “best value” tables for suppliers with a High Street presence, although now dropping behind on-line competitors.

As an example I’ve checked their rate tonight on the basis of exchanging £750 to Euro’s.



Ramsdens = €835.43

Best Rate

WeSwap = €842.03

Other High St

Debenhams = €837.90
Tesco = €834.15
Sainsbury’s = €833.93

So, without regurgitating my earlier post - like yourself pireric - I also question whether they can grow FX in the current environment & was concerned as this was 40% of GP in 2017. Jewellery Retial was also 15% of GP & again I’m unsure if they can grow this side substantially in the coming year if there is a consumer slowdown.

Enough musings from me.

Kind regards,
GHF