Begbies Traynor Share Discussion Threads

[aleman] 26/11/2019 11:18

The website shows a tick up of one to 76 offices - up near enough 3/4 since Feb 2017.

[aleman] 26/11/2019 11:16

I'm no permabear, though some accuse me of that because I've been bearish for a long time now - pushing 4 years. But I was a bull from Nov 2008 until the end of 2015. I'll be bullish again in time but I don't see that being anytime soon.

[topvest] 26/11/2019 10:52

Thanks Aleman - A great summary, as ever. I'm inclined to agree. A black swan event could well be what upsets markets. I'm certainly not a 'permabear', but a recession of some kind is well overdue. No doubt its when politicians start saying that we have tamed the "boom-bust" cycle that we should be most on guard. Just shows you how difficult being patient and prudent is!

[aleman] 26/11/2019 10:13

I lean to the sceptical side. It's an unusual downturn in that it is so extended which makes the outlook a bit less obvious. There is an argument that a weak upswing will be followed by a weak downswing and it was not much of a boom, was it, so why expect much of a bust? However, in the fiat money era, economic cycles tend to follow credit cycles and much of the other commentary is distraction. Defaults are still generally rising and banks are still generally increasing rates and reducing unsecured credit supply as a result (most obvious in credit cards)- but not dramatically so. Mortgage rates are still flat to falling and availability flat to improving. This should help but the market uptake is flat to weak. This highlights the pyschological element. Brexit and Trump have tended to make people cautious but I think they get weary eventually and start to ignore and spend as normal. People only defer for a year or two due to uncertainty then decide to get on with their lives. On the other hand job losses are coming through a bit quicker now - a more important cycle driver.

On the corporate side, cost of credit for prime is flattish. For subprime/junk, spreads are rising. Earnings forecasts continue to deteriorate and dividend growth is slowing. (Dividends have started falling in Australia.) Refinancing is getting more expensive for a minority of companies so they will have to cut back on spending. Zombie companies, which will be growing in number in the sluggish economy, will struggle to get refinancing. (We are seeing more small oil/fracking companies going bust in the US, for example.) I don't see any positives to offset the struggles of subprime corporates at the moment when the consumer is still tending to keep purses closed and surveys show no optimism about personal financial situations. Yield curves don't look enticing enough to encourage banks to lend more and their bad debts seem to be slowly increasing so they will be concentrating on keeping balance sheets healthy. Shadow banking/alternative lenders, which have taken over the lending growth reins for a few years, are starting to see problems with deteriorating quality and regulators.

Overall, I'm going to stick with the credit cycle and say further slow deterioration. This raises the danger that something will crack suddenly under the weight of debt and/or derivatives - a black swan if you like. My thoughts are that we should proceed with caution as a further downswing is more likely than recovery.

[topvest] 25/11/2019 20:32

Be interested in your views Aleman, but there appears to be a lot of comment around that a global recession has been avoided by the recent actions of central banks etc. Do you agree or is this just complacency at work?
I hit 25% cash in my portfolio and now I'm targeting 30% but this seems a fairly contrarian view. I think complacency is taking hold myself and something is going to hit from right field, maybe a black swan type event. What it is who knows, but I think we are well overdue a fairly major correction. Whenever it starts, it will be from China or the US.

[aleman] 12/11/2019 10:06

Claimant Count +33.0k. +263.8k over 12 months. That's 459.5k since Feb 2016. It's steadily accelerating.

[aleman] 30/10/2019 09:43

Business insolvencies up slightly again. Personal insolvencies up strongly.


Q3/2019 corporate insolvencies in England and Wales up 1.6% on a year ago. (Scotland +8.6%, NI -21.5%)



Q3/2019 individual insolvencies in England and Wales up 22.7% on a year ago. (Scotland +12.7%, NI +34.0%)

[topvest] 28/10/2019 10:07

Yes, scope for further upgrades as well given the expected tailwind from recessionary conditions aided by acquisitions. Bodes well. I can see £1.25 within the next 6 months, if all goes to plan.

[aleman] 28/10/2019 09:34

Canaccord price target 105p. Forecast for next year moves up to £10.5m and 6.5p EPS but dividend still at 3.0p. That's pretty much a doubling of EPS in 4 years.

[lefrene] 25/10/2019 12:26

New highs are usually a good sign, makes one wonder what that sharp drop into the low 70's was really all about? Thank you Aleman, I much appreciate your informed contributions.

[aleman] 25/10/2019 12:11

BEG get some kind of mention on stockopedia, too.

[aleman] 25/10/2019 12:06

A good run of buying this morning. On looking around, I see there's a tip update in the IC where they agree the acquisition is earnings enhancing. It indicates they remain buyers at 87.7p.

[aleman] 25/10/2019 08:04

They've still got £1m or so left from the fundraising plus whatever cash generated in half a year of trading so maybe one more small acquisition for £2-3m. They look to be earnings enhancing. EPS forecasts for next year should move up to 6.5p+ and we should see a restrained increase in the dividend forecasts, as I assume they will push cash into acquisitions if they are going to be earnings enhancing. Dividends 2.85p and 3.1p for this year and next then?

[aleman] 25/10/2019 07:37

Another acquisition.



I'm now guessing adjusted PTP of maybe £9.6m this year and £11.0m next year.

[aleman] 23/10/2019 16:05

From last week - some organic expansion in Leicester.

[aleman] 23/10/2019 14:28

Lots of weak corporate news from US/international companies today - ABB, Heineken, Snap, Texas Instruments, Skechers, Caterpillar. Q3 earnings season is off to a weak start. Things look to be deteriorating.

[topvest] 22/10/2019 21:08

There are not many companies that are benefiting from all the doom and gloom at the moment, but Begbies are one of them! Everyone else's downgrade is a Begbies upgrade, so should continue to do well in the next few months.

[aleman] 22/10/2019 15:44

A run of AT trades - buys this time. Tipped again somewhere?

[topvest] 21/10/2019 21:22

Yes, looks a reasonable deal again.

[aleman] 21/10/2019 08:25

This acquisition should take adjusted PTP to maybe £9.2m, with a half-year contribution, and probably £10m or more next year. More acquisitions are likely, though.

[aleman] 17/10/2019 10:05

Banks continue to reduce unsecured credit availability to households - down 11 consecutive quarters and expected to be down a 12th. Corporate credit availability is down two consecutive quarters and expected to be down a third. Secured lending is a little erratic but generally flat. Unsecured credit defaults continue their rising trend since the end of 2015 and expected to rise again next quarter.



I can only see the economy getting worse - and BEG getting busier - if banks continue to reduce unsecured and corporate lending as defaults rise and housing stays stuck in the doldrums.

[aleman] 12/10/2019 20:23

It's not very high for such a cash generative company that has little demand on the cash it generates so it just keeps making small acquisitions and paying a growing dividend.


The answer to your question is yes, the share price is up with events if there isn't a recession coming, but no it's still cheap if there is. (I think it's already here. Checkout Claimant Count - already up by half the total increase of the last recession, yet the B of E does not even look like cutting interest rates yet. Until they cut, I think BEG will keep getting busier.)



But don't forget they're expanding quite quickly now from the cash they're generating. 44 offices in Feb 2017 and 75 now plus cross-selling from the acquisitions. Recent years' forecasts have turned out to be slightly conservative.

[montyhedge] 12/10/2019 11:48

Looking at this p.e seems very high. Is shareprice up with event?