Babcock Share Discussion Threads

[billzj] 07/7/2020 21:11

At risk of repetition you need to understand the difference between between pension liabilities and a pension deficit.......and that's just the start of the problems with your post....

[1spotter] 07/7/2020 19:49

In my view the value of the business, hype aside, is fundamentally in the forward free cash flow generated by the Devonport business, with a high forward discount rate to get a realistic NPV. Difficult to assess, given the financial structural change to put the submarine revenues through the nuclear division. Say, £500 mpa revenue at 6% margin, discounted forward at 17% due to political programme risks? You can do those sums. The Faslane revenues also feature in that valuation, but they don't own those physical assets so they can be removed as the managing contractor. This is a company that put circa £900m of shareholder equity into buying a helicopter business that crashed. What sort of due diligence was carried out and how much common sense was applied in that acquisition? As a result the company would have had to borrow cash this year to maintain its dividend. It also appears to have pension fund liabilities that are double the size of its current shareholder funds. I agree with andrew97 completely. I am an amateur financial analyst in the defence sector.

[ptonks] 07/7/2020 18:51

Ezimabs, a very draining and tiresome company for sure. Should have been put out of its misery 6 years ago, along with its die hard supporters.

[ezimabs] 07/7/2020 18:22

Sold at 305. Not interested in this anymore. Onto other opportunities

[andrew97] 07/7/2020 15:53

Well my prediction for the next couple of years now we have new staff at the top and in no particular order, a company restructure which ought to help see where profit and loss comes from, a big kitchen sink job on the accounts, a substantial share issue, reduced or no dividend followed by a sale.

[minerve 2] 07/7/2020 15:43

Bought @ 296

[ptonks] 07/7/2020 14:47

Well Well Well......

[fitton] 07/7/2020 14:43

Lowest price since August 2006, closly followed by March 2020

[woland1] 07/7/2020 12:40

I've bought in again today. A record order book with good underlying operating profit, when you look at the share price. Serviceable debt, which is coming down. Should be all good in medium term. Though what do I know, before this purchase I was averaging 601p.

[suetballs] 07/7/2020 12:36

Well I can remember when the share price was £14!
Can it go lower - of course it can - but it will hopefully be higher before I die.
How's that for optimism?
Suet

[ezimabs] 07/7/2020 12:28

What worries me is that a new CEO was announced and yet the share price is still way down. Air division is down, govt spending cuts. Where does BAB make money?

[fitton] 07/7/2020 12:17

In 2014 the share price was £14, it's been going down hill ever since.Surely now at £3 takeover talk must resurface.

[minerve 2] 07/7/2020 12:15

If you were prepared to buy at £3.57 then it is even a better deal at today's price, so if there has been no change in business prospects, you should be a buyer not a seller.

Most of this is just the market makers playing on fear, greed and the stop-loss automatic trades that the traders place.

[minerve 2] 07/7/2020 12:12

Absolutely not.

[ezimabs] 07/7/2020 11:44

I bought at £3.57 thinking it was a bargain. Do I just take my loss now

[suetballs] 07/7/2020 11:33

Sub £3 here we come.
What a disaster.
Suet

[minerve 2] 07/7/2020 11:05

I'll be buying some later on.

I think there is a general concern of government spend getting out of hand.

The chancellor comes across as very naive.

[minerve 2] 07/7/2020 11:04

It's great for shareholders.

Long term investors are accumulators so the cheaper the better.

[minerve 2] 25/6/2020 12:49

Listen guys this fall is pretty much all to do with the concern on UK government finances going forward. It is anyone's guess what they are likely to be so I wouldn't make a purchase or sale decision based on the current behaviour of the share price

[ezimabs] 24/6/2020 11:25

It has plummeted today! What is going on?

[billzj] 24/6/2020 10:47

I think that you might want to familiarise yourself with the difference between pension liabilities and a pension deficit.... before moving on to looking at Bab businesses that don't fall under the heading of RN Support business

[1spotter] 23/6/2020 22:47

Bab will only become a sensible non- agreed takeover target when it reports its financial results with clarity and transparency. It deliberately obfuscates sector performance via a complex reporting structure. Until that time I would value it on the basis of projected free cash generation out of its RN support business, with a forward discount rate of 15% per year. Then also factor in governmental/political risk. Also bear in mind its pension fund liabilities that are double shareholder funds.This approach geneates a value of way less than 300p per share. With a take out premium, 200p will be right price.

[dave whitby] 23/6/2020 18:42

Can't understand why BAB don't publicly announce they intend to start buying shares back at these silly prices?
Surely that would mark a current low for the share price and drive the price up forcing shorters to close their position and further increase the share price?

What is wrong with this argument?