Alfa Financial Software Share Discussion Threads

[petes5] 19/7/2021 19:13

And back up on no volume. Have my main holding but had a spread taken out. This really annoys me but its part of investing so why am i surprised.

[petes5] 19/7/2021 14:53

Thats some drop on very few sales. Strange action, could there be orders to fill.I know its a bad day but looking at the trades its down 7% on no volume.

[marktime1231] 06/7/2021 12:44

A welcome update from ALFA to say it has indeed successfully secured its three most promising contract targets, and is still working on another seven. Forecasting a 5% beat of full-year expectations to trump the concern of those analysts who saw contracted workload starting to drop off in H2 without sales.

No idea what the re-casting of how reports are structured means, tinkering in public. It would have been more useful to hear the status of what is left of the cash pile, and what plans the company has other than to keep going with more of the same.

The share price responding well today. H1s due on 22 September.

[sphere25] 01/6/2021 13:24

Thanks Tole and Joseph,

Some interesting activity here though it looks like everyone is out enjoying the sun so as you were! :-)

120p is holding and looks like a buyer in size has mopped up 972k at 122.86p - significant for ALFA. Possible technical bounce candidate IF the sellers have been exhausted on these large trades.

Elsewhere:

Some decent chunks going through INL at the moment though still not enough to shift the dial and help it break higher, but one to watch to see if any of these blocks are a precursor to any whoppers that could change the picture.

SWG looks well bid and set to pop through £2 - learned a lesson in buy and hold there ha

SAA have come out with a good statement but it is moving abit like RCH, where you look at it and think that could go alot higher, but there are still institutional sellers in size lobbing and preventing a rapid move higher.

Very quiet beyond that.

All imo
DYOR

[tole] 30/5/2021 15:25

Hi Sphere. Am actually a small holder in quite a few of the stocks mentioned. Albeit have a larger weighting in both Capd and SWG. Am looking to hold for longer on both of these even after the strong moves up of late fwiw.https://masterinvestor.co.uk/equities/small-cap-round-up-featuring-begbies-n-brown-circassia-and-more/If of interest there's a good summary here of quite a few you cover. BWNG (I hold), HWG (I don't hold), GATC (I hold), DWF (I hold), EPWN (I took a small starter the other day as has always interested me)

[jc easy] 29/5/2021 19:06

Hi Sphere25,

Thanks for sharing your knowledge of order book. It is very helpful to everyone.

Good post with in depth analysis! Keep it up.

Kind regards

Joseph

[sphere25] 27/5/2021 23:41

The MSCI Index re-jig moves has resulted in the expected anomalous closing uncrossing's in auction. Pretty smooth (ideally don't want smooth as it presents bigger price moves) on the whole with numerous price gaps in the auctions. The FTSE review's and the run up to them in particular show bigger moves.

We can see that with the likes of TYMN and FAN today. Even though they have been added to the FTSE 250 earlier than normal (due to RSA and SIG being taken over i.e. spaces opening up in the index), the market was already bidding them up in anticipation of joining the FTSE250.

Back to the MSCI. The Small Cap changes haven't been as pronounced:

ALFA has almost inevitably flirted with the key 120p mark and then uncrossed there.
LUCE made a move in the afternoon and then gapped big in the auction
RCH stayed flat and then gapped in the auction (the demand should help clear some of the larger sellers there holding the price back as per recent RNS)
STEM was abit perky yesterday with automated buy orders and then gapped in the auction toay.

Similar theme with others.

Some of the weakness in ALFA will be this forced index selling, but the last statement was rather iffy too and I just wonder if the used car prices increasing significantly of late could have some bearing on how it feeds through. It's hard to read the ALFA statements. You can't tell if they're going to deliver or miss on earnings, visibility doesn't seem to be there.

From a technical trading perspective, it's been in a nice range bound pattern so I'd definitely keep an eye to see if those buyers at 120p keep coming in. Clearly could be a short with a tight stop if the chart does threaten breaking down but need to be careful here too because these buyers often wait for the price to breach 120p and then bid it back up to that level.

Clearly if they keep coming in at 120p and it looks well bid (orders at 120p and preferably stacks i.e. a few sizable orders at price points from 117p-119p) then the sellers could get exhausted allowing a bounce higher. That's usually the key with shares that move like ALFA - it skews the risk reward in our favour. It's hard to see if you're not familiar with the order book.

I don't think I'll be watching this all the time now but something of note there. It is very illiquid and gaps too so have to be careful if the protection in the depth of those buy orders from around 117p isn't there.

There are a few of these range bound ones about where it really does pay to just watch the book and trades:

BWNG (directors putting a floor under the price near 60p) bounces in a range as the market gets excited by the director buying but then the larger sellers in the market feeding the directors exhaust the short term optimism and bring it back down.

RCH bounces in a range whilst at least a couple of the major shareholders sell down in significant ways. Those sellers could get exhausted soon allowing a bigger breakout though.

IBST - in a narrow range and clearly needs a big clearout to allow a sustained move higher.


Just some insight there.

Posts are long enough, maybe bore myself to finally get some decent sleep - tried! :-)

All imo
DYOR

[sphere25] 27/5/2021 23:41

Thank you Tole.

A late one today with battling some ear issues and Tinnitus. It's giving me a good kicking so somewhat fatigued, on different timelines and behind of late so just do a bigger roundup here and then have a look at ALFA and some of the index moves.

Fortunately current issues haven't fed through to trading with some of the very recent share posts (GATC, BWNG, DWF and a couple of trades in RCH) moving well and providing some opportunities for folk.

It is also nice to see some of the more testing laggards like CAPD, SWG, SREI, HWG and RST actually significantly outperforming of late. SWG was the main balls up at one stage and now wondering whether to lob some or go for gold!

Still, they're not all working. The likes of INL, IBST and EPWN continue to be stubborn and just don't want to re-rate. INL and IBST are significantly off pre-covid levels too so it's more disappointing.

Just comment on XLM, because it is divisive. I can see XLM has come out with an iffy statement today. That is a veiled warning and why I only quickly nip in and out of that one outside of news (see previous posts there). Granted if their tone changes, it could be a different proposition but that's what they do.

There is a history there of that kind of statement, which disappoints investors, and then makes you wonder if they are going to come out with another such iffy statement or a full on warning. It becomes hard to back them fully when they keep doing it year after year. Hopefully for longer term investors there, there is a significant change in tone and longer term reward.

Overall though, nice markets and folk must be happy with how things have gone. As per previous posts, clearly have one eye on the US before making further moves and it looks like sideways there at the moment with the indices having tested support levels and bounced.

As also previously stated, their markets bend but don't break (market is siding with the FED that inflation and therefore rates won't become an issue for stock markets as well as the crypto and nutty valued shares sell off's not feeding through via any negative forced leveraged effect to the main indices), which will keep us in the UK stable.

It gets harder if there is bigger selling further down the line in the US because it will feed through here and that's when folk will have to make their minds up on how they're going to approach their portfolios.

I usually have stops or raise stops, and if it hits, it hits and then it'll be all quicker trading if the market is less forgiving than this one. At the moment, you have so much leeway. Folk have been able to buy and almost not have to worry about the buy prices because it has been one way, with dips getting bought and so much share price strength.

From a trading perspective, this has fed through to allowing folk to almost not use stops because it has almost been a given that the downside won't last long and prices will bounce back. It's a dangerous mentality to have once the market does get more challenging because the downside will be bigger and last longer, which has huge implications for not just normal share trades but the use of leverage in particular. It becomes so important to tighten things up and be very disciplined.

I know there are alot of seasoned pro's in this market, but this is the new world with an army of newcomers. We can see from the likes of AJB today, the average of new investors being younger and alot less experienced so hopefully we can all share some experience with them.

I'll have to split this post and move onto ALFA and the index moves.

All imo
DYOR

[tole] 27/5/2021 15:45

Good analysis Sphere. I enjoy reading your take on a lot of the stocks you follow. Appreciate your input greatly.Actually own a fair few small holdings on a number of stocks on that list fwiw. Regarding Alfa - still watching for a potential gap fill on the chart back at 110p from sept last year came close the other day at 1124/114

[sphere25] 24/5/2021 14:19

Certainly looks like some of the move is explained by the demotion from the MSCI Small Cap Index to the Micro Cap Index Tole. The changes will take place at the close this Thursday so there will be some anomalous closing auction's.

On the whole, I can't recall there being large moves when this particular type of demotion happens, but seen as ALFA is highly illiquid, it doesn't take much selling to move the price so the illiquid one's (subject to no large buy order being worked in the market) are more prone to moves.

120p is where the larger buyers came in here on previous occasions so worth keeping an eye on that to see if it holds, but I'd still wait till after the auction in case the price gaps alot in the Thursday close. If that price keeps holding and the book is well bid there, then there is a potential trading opportunity on the long side.

As for potential movers on the long side on being added to the Small Cap index:

AUCTION TECH GRP
CHEMRING GROUP
CLS HOLDINGS
DOTDIGITAL GROUP
DR MARTENS
GAMMA COMMUNICATIONS
HARBOUR ENERGY
JOHNSON SERVICE GROUP
KAPE TECHNOLOGIES
LUCECO
MOONPIG GROUP
NAKED WINES
POLAR CAPITAL HOLDINGS
RANK GROUP
REACH
RENALYTIX AI
SAGA
SECURE INCOME REIT
SIG
STHREE
SUMO GROUP
TREMOR INTERNATIONAL
VOLEX
YOUNG & CO'S BREWERY A

Of the one's I am watching, I can see some larger blocks being exchanged in Reach (RCH) recently but still not enough to cause a more substantial move in clearing the larger holders selling down. CLS (CLI) is illiquid and could move. Luceco (LUCE) , Volex (VLX) and SThree (STEM) can move on nothing volume too so worth keeping an eye on for a possible quick nimble trade.

It isn't an exact science, but these index moves do tend to provide quick trading opportunities (particularly in the afternoons before the index changes take place), just have to be careful of not being on the wrong side in the closing auctions so best to trade outside of those.

All imo
DYOR

[tole] 18/5/2021 11:05

Perhaps sell off due in part to the changes in Alfa leaving the MSCI global small cap index later this month.

[marktime1231] 10/5/2021 11:37

An AGM outlook statement this morning has intrigued me. Not the bit about not losing any prospects from its late-stage sales pipeline, but that revenues are progressive even without major new contracts being signed. And reading between the lines there are three promising prospects which Alfa are investing in trying to convert in to contracts.

In recent times Alfa has had a knack of understating outlook so as to manage expectations. This AGM statement has all the hallmarks of having good news to report soon, against a backdrop where contracted baseload will start to fall off otherwise.

So that's a binary bet. Punters like a binary bet. Which way?

[sphere25] 23/3/2021 13:38

Noted this had a go at testing the breakout but sellers came in and took out the buy orders above 140p so it continues to be range bound.

News today doesn't appear to be changing the status quo rangebound movement as yet. As per previous comments here, the forward comments from ALFA are so wishy-washy. They provide conflicting comments, which on one hand, suggests some cause for optimism, and then they'll put in some comment about profitability being affected or being cautious.

Things like this:

"The nature of our current business model is that whilst we have good visibility for the next six months, contractual cover reduces thereafter and so, whilst positive about our prospects, in the current environment we remain cautious in setting expectations"


Nonethless, it continues to look one for the range bound traders at present.

All imo
DYOR

[sphere25] 04/3/2021 18:03

Hello Doctorbird,

Which way will it break?

That is always the question, and if we always knew, I'm sure we would all be sat on a tropical island somewhere relaxing rather than posting messages at this time :-)

I guess that is the challenge of markets but these imbalances are interesting because we're all looking for a large imbalance that favours our position, which is nearly always on the long side.

There have been many examples recently where the search has been specifically for those imbalances where there has often been a single seller holding a share price back or some form of other imbalance involving a rather large buying mop to clear out more than one seller to then allow a price move higher.

ALFA statements aren't always the most straightforward to decipher and the price movements are difficult with price gaps during daily trading, gaps in closing auctions, gaps in opening auctions and it can move on nothing. Ultimately it makes ALFA a much harder share to trade.

The market is clearly very happy to sit in a price range awaiting a trading update.

All imo
DYOR

[doctorbird] 24/2/2021 15:34

Yes, it is the range bound price that has brought me here. The weekly chart has the Bollinger bandwidth at 8.6, as low as it has been in the short history of this company. So the problem as ever is which way will price move when it breaks out of the range. What you say Sphere 25 on recent buying is interesting. I shall keep this on my monitor for now.

[sphere25] 22/2/2021 13:33

Should have hung on longer here. It's not always easy to decipher ALFA's trading statements. You can never be sure if they're going to come out with a profit upgrade or a profit warning!

Price is rangebound and awaiting further news, but some notable activity on Friday with some big chunks of 2.18m, 1.25m and 1.3m mopped up at 121.9p so clearly buyers in size near the bottom of the range preventing any breakdown of the support levels.

All imo
DYOR

[bathcoup] 24/11/2020 21:28

Not a holder (it's been on my watch list for a while). Initially the high p/e put me off. Now my question is why the revenue is in decline since 2017.

[plasybryn] 29/10/2020 09:20

What a great RNS. Well done Alfa

[plasybryn] 15/10/2020 08:25

Well done Alfa to issue positive news on ex dividend day.

[plasybryn] 14/10/2020 10:27

So ex dividend on 15th October with pay-out on 6th November of 15p (c. 11% yield)

[hatfullofsky] 25/8/2020 09:06

Very negative undertones to the RNS but then say FY will be exceeded with a drop through to EBIT. Looks like management are uber cautious hence the large cash pile.I opened a small position to which I will add on strength

[thomasearnshaw] 25/8/2020 08:46

VC buyout coming?

[scepticalinvestor] 25/8/2020 08:42

good summaryhave held off buying for now as i can see these falling lower

[thomasearnshaw] 25/8/2020 08:34

Wont be surprised if they take this private. Management are a bit sneaky imho. Was expecting to see these at 100p today