Alexon Share Discussion Threads

[edmundshaw] 10/6/2008 08:04

She-ra, an interesting post.

But a key difference to the Great Depression of the 1920's and 1930's is that share prices are nowhere near so overvalued as they were then. I don't think we are heading that path; as for inflation being low, I cannot think of anyone who actually believes the CPI represents inflation. By my calcs we have realistically already had 2 quarters of contraction. The question for me is: how much worse will this recession get, and how long will it last. If it weren't for mortgage and consumer debt levels I'd say not long. As it is, I really cannot get a feel for it.

[cockneyrebel] 10/6/2008 07:41

You obviously don't want to understand or can't she-ra imo. The market has been told for months we are in a recession when we ain't, yet. But share prices already factor a recession in with AXN - imo. What you fail to grasp is the stock market looks 6-9 months ahead so it's now pricing in what it expects the dire Jan trading statements to be. I say the market is fatoring in too much gloom.

Infact more worryingly you could argue that the current situation has a parallel with the Great Depression of the 1920's and 1930's.Out of control credit,foreclosures beyond belief in America on homes,the very weak dollar and rising inflation.I would argue that these interest rates cant stay around this level forever.

LoL - stop reading the Daily Mail and go and get some happy pills - sorry I can't stop - I'm off to go begging then have my dinner down at the soup kitchen.

CR

[gorse] 10/6/2008 00:34

She-ra - If Gordon Brown was investing in shares he'd be catastrophically down on his monster shorts on gold 1999-2002. Unfortunately, he passes all his losses onto to taxpayer. He's about as clueless as the average ex-senior lecturer in political economy (a very lefty title which never includes any real economics) at the Paisley College of Technology (John Major why did you ever make these places "universities"?).

[cockneyrebel] 09/6/2008 21:42

No aliases, and I've been here since 1999.

Is that what you do when you lose an argument? Try to accuse me of having and alias or more? Get in touch with ADVFN and ask them to check my IP address if you like. You'll see my name is in blue too - so I'm varified whereas you aren't.

CR

[slaine777] 09/6/2008 20:03

Only macro concerns blown up by the media keeping this down.

[slaine777] 09/6/2008 19:53

I bought 200k lol.

[ydderf] 09/6/2008 17:59

i bought another 25/- @ 67.75.....amazing value!

[cockneyrebel] 09/6/2008 17:26

200K dump at 64p at the close - mm's won't have taken 200K so they have a buyer for that lot imo.

Might be the overhang gone and the forced seller that has been beating these up for weeks.

CR

[gorse] 09/6/2008 11:14

Warm and sunny in Birmingham today and forecast to remain so all this week. Also seems to apply for all/most of country. This is the weather and this is the time of year. What a contrast with last year. No wonder I've just topped up. Similar weather improvements (and weak £) will also help MARS.

[timanglin] 09/6/2008 08:48

Hi CR - thanks for your link about the new CEO, one of my non fundies criteria for share purchase is the management particularly CEO. The new CEO has everything going for her, however she still has to prove herself with a 'new' team - I accept though(to use an analogy) that a good footballer is a good footballer in wahtever team. At the moment am showing interest in AXN, however just watching and waiting, and certainly i can see where you are coming from. The small oilies are more interesting for me at the moment...

[sheik yerbouti] 08/6/2008 16:36

Tough times but there is a lot of bad news already priced in. To be trading in line is a great result when you read the article below:




Sales shock triggers alarm bells at M&S
Neil Craven. Mail on Sunday
8 June 2008, 10:23am
Marks & Spencer is losing market share to its rivals amid a downturn that retail experts describe as the worst to hit High Street clothes stores for five years.

The decline, particularly in the critical womenswear market, comes with the retailer under fire from shareholders for its executive pay packages.
Controversially, the new scheme lowered the bar on the profits targets needed for directors and chief executive Sir Stuart Rose to receive payouts of up to four times their salary.

According to secret figures from market research firm Taylor Nelson Sofres, retail sales across the High Street were down five per cent in April, compared to 12 months before, the worst drop since 2003.

M&S was worst hit in the same period, mainly because of a fall in its share of spending on womenswear, down 0.4% to 13.2%. Its share has been falling since before Christmas.

Head of womenswear Kate Bostock became an executive director in March and is among those who could benefit from the lower targets outlined in last week's annual report.

Directors last year stood to pocket bonuses only if earnings rose by 12%. This year the target has been lowered to 8%.

Shareholder group, the Association of British Insurers, stopped short of saying it opposed the scheme, but said it was not 'fully supportive'.

M&S blamed its falling market share on lower-priced products.

A spokeswoman said: 'We have been sharpening our prices to offer great value to our customers and inevitably there has been a drop in our market share in value terms. However, we are growing volume market share ahead of all our competition.'

As well as the easier bonus targets, shareholders were concerned at a £280,000 retention bonus for Bostock and a £500,000 'golden hello' for food boss Steve Esom who joined from Waitrose last year.

M&S is not the only clothing retailer suffering, according to the figures, with rival Next also struggling. Several clothing retailers have hit trouble this year, with discount chains MK One, Ethel Austin and Select all entering administration and subsequently being bought out.

Market share gainers include Asda's George range and Debenhams, which in recent months has attempted to provide more fashionable lines.

An executive at one retailer said: 'It is tough out there. The main aim at the moment is to get through the next few months and make sure you hit your targets.'

[cockneyrebel] 08/6/2008 15:43

hhhm, from what I've seen of you you can find a negative point about any stock you want to buy - it was highlighted further up by someone else.

I could say if you don't like this share and don't hold it then why spend so much time here? If I see a stock I don't like I might mention it once or twice but then I'm gone, I have never understood why someone wants to spend so much of their precious time trying to save me (who seems to be the only one holding here bar one or two anyway) from my own foolish ways.

Best write to the company if you think they are lying in their trading statement an the FD needs to be told he's crazy for buying shares too - you obviously know the business much better than he does, the other directors and all the analysts do.

CR

[cockneyrebel] 08/6/2008 11:31

Well the co has just announced they are trading inline and the house broker is quoting 22p. Even if AXN missed that by 50% they are cheap.

The dates of those broker forecasts are March, March, Feb, May, March, Sep, Feb - so the lowest forecast of 12.7p is from way back in Sept from Seymour P who look like they have ceased coverage. If you wipe them out the concensus is even higher.

Now are you trying to say brokers were unaware of the current retail climate or the outlook in March to May?

"we are about to enter a serious recession. Who says? Inflation is running at 3%, interest rates are running at 4-5%, unemployment is low. We last had a serious recession when interest rates were double digit, like inflation and unemployment. Perhaps you like everyone else thinks we are in for a serious recession and therefore that's priced into the shares of many retailers. If we all 'know' the next 6 months will be 'disaterous' we have already factored that into the shareprices. Perhaps that's why AXN are trading on a PE of 3, paying a 13.5% yield and have no debt. And if the world is in for a majr recession why's oil still rising? A world recession would decimate the use of oil and the market would have seen oil prices plummet imo.

Meantime the high street property owners are having to slash rents and leases and key money to attract retailers into taking new stores. I'm sure AXN and other retailers are busy going back to the owners where they have leases that are about to expire soon and telling them they want a reduction or they will be moving when the lease runs out - there are plenty of rent cutting opportunities:

From the year end results:

"We continued to take advantage of the softening in the retail property market
and the thirteen shops opened on favourable rental terms during the year have
good profit potential for the future."

It's an ill wind that blows nobody any good.

As with all market falls many shares get grossly oversold because we get conditioned to believing everything is so bad. Does the Daily Mail ever cover a good news story?

Halfords last week, results were better than the market was expecting.

French Connection a fortnight ago:

LONDON (Thomson Financial) - French Connection Group Plc, the fashion
retailer and wholesaler, said Wednesday it 'performed well' in its
first quarter in difficult markets on both sides of the Atlantic but maintained
its 'cautious outlook' for the balance of the year.
The group said that for the 15 weeks to May 17 UK/Europe retail sales were
'broadly flat', both in total and on a like-for-like basis. Achieved
margin was at a 'similar level' to last year.

That isn't a disasterous trading statement, I can remember retailers saying sales were down 7-14% on average, interst rates, unemployment and inflation soaring and the ratings they were on were not as low as AXN is today.

If every investor feels that pessimistic there must be some cracking bargains out there.

CR

[cockneyrebel] 07/6/2008 16:16

Agree (tho it would be nice if there's lots or women wandering about naked). I'm convinced women cannot stop shopping for more than a season. I get 'this stuff is all out of date' - she's never worn it and throws nothing out! 80% of the wardrobe is the wife's.

GMTV and This Morning constantly have the latest fashions every day.

Yep, I'm sure retailing is tough at the moment but the reason some of these co's have been going so long is experience and dealing with tough times. What's currently happening is a number of small endebted independent retailers are failing which leaves more cash to head towards the survivors. The survivors have been cutting costs to the bone - sales might have been down for AXN but margins are up, they aren't selling for selling sake just to keep excess staff busy. The further we go through this the easier the comparisons start to become compared to the previous year. Then whe sales do pick up they are on better margins and it takes far less sales growth to achieve a big return on the bottom line.

The sale of the Menswear division got rid of 5 million odd of annual losses last year - that sale never happened till year end.

CR

[doubleorquits] 07/6/2008 15:27

Exactly. EPS 22.08 from the House Broker who should really know, although I accept in some cases they can also be a little more optimistic than others. That equates to a PE of 3 as you say and if you take the best at 24.6p we are on a PE of about 2.7!

The present forecasts are pricing in a rather long recession IMO in which a lot of people are not going to be buying new clothes - and probably some walking around naked. Panmure are the most recent I have and they are forecasting 20%+ growth from 2008 to 2009 and the following year as well. They have an increase of dividend to 11p which means in their view AXN will remain a nice income stock for a number of years from here (5.5% even at £2!) irrespective of capital growth.

Go back to the end of the Technology bubble and look at the income available on stocks such as Rolls Royce. The share price fell to 64.25p on March 12th 2003 yet they paid a final dividend on 7th July, only four months later, of 5p. That is a yield of 7.5% on the final dividend alone. There were loads of others too - RMC, LGEN, EMI, DSG, SCTN, FP. UU. where quite a few like Rolls Royce were having meltdown priced in. Only need to look at Rolls Royce price today with a price of 390p or so off highs of 570p. What an investment that would have been just five years ago. Great capital growth with fantastic yield secured even though it is only 3.3% for the whole year at today's price.

Patient money needed with a patient temperament. Think about it.

[cockneyrebel] 07/6/2008 13:21

2008 Forecasrs

Dresner K: £15m pbt, 22.08p eps (House Broker)
ABN Amro: £13.7m pbt, 21.06p epe
M.Lynch: £14.96m pbt, 22.68p eps
Panmure: £12.6m pbt, 16.21p eps
Numis: £8.4m pbt, 12.70p eps
Seymour P - - - 19.14p eps
Kaup/S &F: £16m pbt, 24.60p eps

"Despite a difficult economic environment of weakened consumer demand and unhelpful weather, trade during the first 18 weeks of the half has continued to be in line with expectations for both Alexon Brands and Bay Trading. We are continuing to maintain margins and control costs."

On the very worst forecasts the PE is 5.3. On House Broker forecasts the PE is 3.

Yield 13.2%

CR