Aa Share Discussion Threads

[anony mous] 05/10/2017 08:46

X div today for 3.6p

[luckymouse] 02/10/2017 02:49

Well it has more debt than a small african country lol
But there might well be a bounce trade there upon stabilization/derisk news - plus looks like some fundies will have a few for the yld

free stock charts from uk.advfn.com

[scemer] 28/9/2017 12:47

Gosh these people with old news what's their motive!

[hpcg] 27/9/2017 16:03

It seem nowadays whenever there is a spike on the downward chart of a questionable company it's Woodford buying. Even the reduced interest payments substantially eat into shareholder returns. A lot of supply on the book taking the opportunity to offload into the temporary rise.

[minerve] 27/9/2017 15:29

Santori

"I agree Minerve, value opportunities can be found occasionally in boring or declining markets, but you need a variant perception in order to buy-I cant see one."

Sometimes you don't need one; here is just a case of being patient and waiting for the company to get back on its feet.

[srpactive] 27/9/2017 09:27

Another interesting one, dyor.

[anony mous] 26/9/2017 11:03

Nicely dropped to fill that 1 million buy order.Back up it goes!

[anony mous] 26/9/2017 09:42

Nothing nasty there.Numbers are good and looking to head towards the £2.00 level.

[minerve] 26/9/2017 09:15

Happy to hold/increase holding. Free cash flow will work for the company quicker than the debt will be hindered further by a rise in interest rates IMO.

[mj19] 26/9/2017 08:22

A Limited announced 1H results: "Group Trading Revenue was £471M, up 1% on last year (H1 17: £467M) reflecting a strong performance in Insurance Services and the Underwriter while Roadside Assistance and Driving Services were flat. (...) Profit before tax rose significantly to £80M (H1 17: £48M), mainly as a result of the one off pension benefit (...) adjusted basic and diluted earnings per share were 10.2p (H1 17: 10.3p). (...) The Board has declared that the interim dividend will be maintained at 3.6p per share."

[ayl30] 26/9/2017 07:23

Results seem encouraging in that all appears stable with future expenditure funded out of free cash flow and div maintained.Given problems earlier this year good to see some calm descending!

[bookbroker] 12/9/2017 07:54

Same position as Yell was, drowned in debt eventually through heavily diluting fund-raising!

[essentialinvestor] 22/8/2017 15:20

santori, very good summation.

[utsushi] 20/8/2017 12:33

I agree Minerve, value opportunities can be found occasionally in boring or declining markets, but you need a variant perception in order to buy-I cant see one.

I think the key question is how a late stage company, AA, with flat operational revenue/profit, in a strong economy, make just £42m of net cash flow, and then repay in under 3 years, £578m of debt (1st tranche), bearing in mind that the UK economy will probably enter a recession in late 2018, or early 2019?

I think AA's Insurance Services are vulnerable, and in a downturn customers turn to lower cost smaller Roadside Assistance providers, or just go without.

EV/EBITDA of 9.5x is not cheap, and at some point there could be a perceived or real solvency risk if the economy enters negative growth.

The dividend cover is low and I think the stock is best avoided for now, and perhaps look to buy if there is some form of capitulation.

The other scenario which could happen is that the company grows out of its debt burden, or simply stagnates, and muddles it's way through-unlikely but possible.

Over the last 2/3 years the company has repeated a pattern of a sharp fall followed by a stabilization, then a modest rise, followed by a sharp fall again, it will be interesting to see if that pattern holds.

Volume has picked up and it looks like a floor of some kind might have been reached.

[minerve] 16/8/2017 10:16

santori

I am not implying what the trend maybe. All I am saying is because electric cars are deemed to be more reliable doesn't mean that the opportunities and markets for AA become less attractive. Lots of things are at play including strength of those already in the market, rate of decline etc..

Some times opportunity is best found in 'boring' and declining markets. Many investors always look at the growth markets and it is these that generally attract too many players who have to invest a disproportionate amount of capital in order to remain competitive.

[utsushi] 16/8/2017 09:47

Minerve,

Yes, you maybe right about smaller "on the margin" operators being forced out of business, nobody knows for sure but I would not want to bet against the trend-you maybe exhibiting a little bit of "narrative fallacy framing bias" here !

Large cap stocks that go ex-growth rarely recover, unless they can discover a "new line on the same pitch", Rentokil for example went global with its pest control business, pre its operations were stagnant or in decline, AA is encumbered with significant debt, flat cash flow, negative long term trends.

AA's great strength is its brand recognition which is high.

[minerve] 15/8/2017 11:47

The wonderful affects of good old asset stripping, erm sorry, private equity.

[essentialinvestor] 15/8/2017 11:41

Net debt/EBITDA @ 6.77 on 2018 estimates.

[minerve] 15/8/2017 11:33

Yes Essential, I agree. What is the multiple to EBITDA atm?

[essentialinvestor] 15/8/2017 11:12

You can't get away from the debt imv, it overshadoweds everything else.

[minerve] 15/8/2017 10:50

Many a mature/dying market have great money making businesses. Just look at tobacco. Also, I am not convinced the switch over to electric is going to be fast. It will probably be fast in developed countries - they have mature electric distribution networks with inherent redundancy. Not so in developing countries. The oil majors and those invested in oil are not going to roll over and see their businesses dwindle. They will pump more and more oil making it a serious economic competitor to electric. At the end of the day it will be down to regulation and government interference but if oil majors are large net contributors to government revenues then in some countries oil and combustion engines will be around for a very long time.