Begbies Traynor Share Discussion Threads

[dangersimpson2] 08/5/2013 13:42

Based on rolling figures s t o c k o p e d i a has just 11 - BEG, CUP, ABM, HAT, MGNS, POG, ACHL, TLPR, CLLN, PHNX, AV.

[mrwhits1] 08/5/2013 12:31

Begbies is one of just 15 UK-listed companies yielding more than 4.5% but with a P/E less than 7.5 times earnings

interesting....

care to divulge the other 14?

regards

[asagi] 08/5/2013 12:29

Begbies' year recently ended (April). Forecasts for the year just passed were EPS of 5.65p and dividends per share of 2.20p.

That's a 2013 P/E of 5.9, with a yield of 6.6% at today's price.

Begbies is one of just 15 UK-listed companies yielding more than 4.5% but with a P/E less than 7.5 times earnings.

Hopefully, final results in July will inspire the market to reprice the shares higher.

Asagi (long BEG)

[paulypilot] 08/5/2013 10:29

It's sour grapes by someone with a grudge against the company apparently.

I've made enquiries, and there are not any investigations by the ICO or Police involving Begbies.

Regards, Paul.

[bonio10000] 08/5/2013 08:15

A lot of Insolvency companies might use firms to track people.

You can imagine that needing to trace assets and where people disappear to is important.

So whether they did or didn't buy such a firm is not necessarily odd.

[asagi] 08/5/2013 08:11

Hi Edtrubb,

Can you give a bit more information please?

For many years a good part of their revenue stream has been generated from Private Investigator work

I'll admit that is news to me and have never noticed any mention of private investigations in company announcements, please can you provide information so we can check this.

they bought a Private Detective Agency a few years ago

please name the agency.

Have you personally complained to Begbies or the ICO yourself?

Finally, you said that the police were investigating Begbies and others. How did you come by this information?

Asagi (long BEG)

[c1d] 08/5/2013 07:39

I believe this is what edtrubb is referring to:



No mention of Begbies Traynor that I can see. I'm not convinced that the investigators being referred to are likely to be doing the corporate fraud and forensic investigation work that Begbies says it does.

[paulypilot] 07/5/2013 23:08

Hi edtrubb,

I'm concerned by your post, and have Googled for ICO and Begbies, but nothing whatsoever comes up which implicates Begbies in this investigation.

It's very easy to post links here, just copy/paste the URL.

More info needed pls.

Paul.

[rotors] 16/4/2013 10:22

Looks like 2 large 'buy' trades this morning (16th)

[c1d] 16/4/2013 10:04

Thanks Bonio for the info. Very interesting insight.
Regards

[bonio10000] 16/4/2013 09:01

Yes - you are right.

But obviously the bigger the job and the more money available the more you can charge in terms of seeking to realise the best prices or manage the business.

if the company has no funds, you really are limited on fees you can charge and also there is pressure from banks etc on fees.

That is what the other half tells me.

My understanding is that there is not only a lack of work in the industry as a whole but real pricing pressure as well.

[c1d] 16/4/2013 08:00

bonio,
As you have close connections to the industry please correct me if I am wrong, but my belief/assumption is that non payment of fees is unlikely to be a significant issue because administrators/insolvency practitioners fees get paid before the creditors see anything from realisations from insolvencies or administrations?

Sure I can see that non payment could be an issue if Begbies are appointed to advise a company on restructuring options etc outside of a formal administration/insolvency process, or if there is nothing in the pot after selling off assets etc but I would have thought this is not very common in practice? Especially given the laws around trading while insolvent which one would hope that directors would bear in mind if their business is in difficulty.

I'm sure you know more about this than me so it would be great if you could clarify how this all works in practice.

Regards

[bonio10000] 15/4/2013 18:43

My understanding is that one large issue is that such companies have no assets to pay fees.

It is no good if more companies go to the wall, but BEG cannot make money out of them.

[c1d] 10/4/2013 14:05

Thanks ukinvestor220, a very interesting read.

I think that their analysis of the situation is correct. In the last week I have read articles about falling labour productivity, SMEs struggling to raise finance for investment and growth, and banks not holding enough capital (so they have no incentive to recognise bad debts as well as no incentive to increase lending). All these factors (and more) support the view that resources are currently being misallocated away from companies that can drive economic growth.

I agree with the saying: the four most expensive words in english are "this time it's different". I don't believe the current low levels of corporate failures are sustainable. I have no idea when the failure rate will increase, but because I'm sure that it will sooner or later I hold BEG and will continue to do so.

[ukinvestor220] 10/4/2013 13:00

Headline: DJ EU Tells UK To Deal With "Zombie" Firms
Date/Time: Wed 10th Apr 2013 11:30:00 ▼

By Ainsley Thomson

The U.K. should take action on over-indebted, unproductive firms that are being kept alive by low interest rates and lender forbearance, the European Commission said Wednesday.
In a report on macroeconomic imbalances, the European Union's executive arm said the necessary action would involve banks increasing their levels of provisioning--the capital held against potential future losses--and more companies restructuring their debt.
The commission said this action would deal with the risks the highly indebted firms present to the stability of the U.K.'s financial system and would boost investment in more productive firms and sectors of the economy.
"A fine balance has to be struck in order to reconcile the longer term benefits of 'creative destruction', and the shorter term advantages of low insolvency rates supporting employment in a weak domestic economy," the report said.
The commission's comments will add to the concern policymakers in the U.K. have about "zombie" firms--businesses that continue to exist due to banks' forbearance despite having little prospect of paying off their debt.
Economists believe the situation is starving more productive firms of the investment they need to create jobs and drive economic growth.
Late last year, the Bank of England's Financial Policy Committee--a panel of central bank officials, regulators and finance industry veterans tasked with safeguarding the stability of the U.K. financial system--said that banks and building societies may be overstating their capital levels by underplaying the risks associated with different kinds of assets and by failing to face up to losses on troubled loans, particularly to commercial property developers.
U.K. policymakers are trying to ensure that the country doesn't succumb to a "lost decade" of stagnation like Japan did in the 1990s. Japanese banks' unwillingness to recognize losses--an endless "evergreening" of bad loans to companies that the authorities took too long to tackle--has been identified as one of the key factors that kept Japan's economy in stasis.
If banks were to come clean about the true state of their balance sheets, they would find it easier to attract capital to fund new lending, officials believe.
The European Commission also commented on the U.K.'s ultra loose monetary policy, saying that while the policy stance was appropriate in the context of weak domestic and external demand, it should not be at the cost of allowing existing imbalances in the economy to remain unresolved indefinitely.

(Jason Douglas contributed to this report)
Write to Ainsley Thomson at [e-mail]

(END) Dow Jones Newswires
April 10, 2013 06:30 ET (10:30 GMT)
Copyright(c) 2013, Dow Jones & Company Inc

[c1d] 10/4/2013 09:37

Pleasantly surprised to see that BEG going ex div of 0.6p doesn't seem to have affected the share price.

[sir leonardo] 11/3/2013 20:43

WELL WELL WELLL!!!!!!!


SIR ARCHIBALD SAYS SELL SELL SELL SELLL!!!!!!!!!!!

RISK REWARD IS A RECIPE FOR LOSSSES!!!!!!!!!!FFS

LOW VALUATION BECAUSE IT WILL BE STUCK IN DIS TREND FOR YEARS!!!!!!!!!!!

[alex1621] 11/3/2013 16:53

Hi Asagi, I don't think we are in disagreement ... I too am long Begbies ... and slightly underwater at current price. My point was that the price today is a good entry point for a medium/long-term investor ... when economic conditions begin to normalise I believe that BEG will move upwards (and very rapidly) ... so I advised that we ignore the bear siren call from Sir Leo ... we are both on the same page. I just don't believe that this scenario will arise near term.

[asagi] 11/3/2013 11:16

I think I'd disagree with you there alex1621.

Begbies is cheap TODAY and in the current business environment.

How many other companies are there that are forecast to pay a 6.3% yield, with a forecast P/E of 6.2 and have very recently issued an in-line trading statement?

Add to this the apparent bottom of the insolvency cycle and the shares are a screaming buy. Note to any bears - before you respond and claim Begbies is to be avoided, back your argument up with some cheaper alternatives.

Asagi (long BEG)

[alex1621] 11/3/2013 09:39

I'm with Pauly Pilot on this one ... BEG will lift as the economic climate improves, companies stop being propped up by Government policy, interest rates begin to move upwards and Banks start to clean up their loan books ... Sir Leo amusing ... but ultimately wrong! Will happen eventually, good entry point for a medium/long-term holder.

[sir leonardo] 08/3/2013 21:59

WELL WELL WELLL!!!!!!!


SIR ARCHIBALD SAYS SELL SELL SELL SELLL!!!!!!!!!!!

RISK REWARD IS A RECIPE FOR LOSSSES!!!!!!!!!!FFS

LOW VALUATION BECAUSE IT WILL BE STUCK IN DIS TREND FOR YEARS!!!!!!!!!!!

[paulypilot] 08/3/2013 21:07

I think the point is that Begbies are managing to trundle along, delivering an operating margin in the low to mid teens, at a time when insolvencies are being hugely & artificially suppressed by Govt policy.

Sooner or later that will reverse, and there will be a big increase in insolvency work. BEG will then be in a position to take on extra staff, increase utilisation of existing staff, and obviously increase profits considerably.

So, by valuing the shares at a PER of 6, and a 6% dividend yield, in very depressed market conditions, then it seems obvious to me we're getting a long term bargain.

Also, the problem issues of the past, e.g. tax business, Jersey, and Red Flag are all gone, and we have a nice simple insolvency practice just getting on with its knitting.

Risk/reward looks really good to me. We're on a low valuation at the low point in the cycle, which is the best type of investing opportunity, surely?

Regards, Paul.

[boonkoh] 08/3/2013 20:01

As long as insolvencies keep being at record lows for medium and big companies, Begbies will struggle to grow top line revenue at a fast enough pace to warrant a PE of 10x.They could cut costs and increase margin, but no sign of this strategy yet from management.