Capita Share Discussion Threads

[tim 3] 10/5/2016 21:38

Unusual to see these slagged off by analysts but shares strongly up.

Lets hope the old saying "price never lies" holds true.

[thomasthetank1] 10/5/2016 11:53

Read Panmure Gordon & Co's note on CAPITA PLC (CPI), out this morning, by visiting hxxps://www.research-tree.com/company/GB00B23K0M20

"Management are: "on track to meet consensus", but won only £0.46bn contracts so far this year – less than half the level at this point last year. Today’s update contains exactly half the number of numbers (pipeline, sales etc.) as the 2015 Q1 update. They do not say what has happened to the £4.7bn (Feb ‘16) bid pipeline (although to be fair they have historically only put a value on this twice each year). The pipeline is only “active” in public and private, rather than “buoyant”; which it was at this point last year. Only..."

[philanderer] 29/2/2016 23:17

Capita shares continue to slide as analysts cut their recommendations following the outsourcing group’s results last week and news that its chairman was stepping down.

It is down nearly 3% at £10.01, with Berenberg reducing its target price from £11.60 to £10.90 with a hold rating and Panmure Gordon repeating its sell advice.

Panmure analyst Michael Donnelly said:

The heavy fall in the share price post Capita’s prelims and the exit of its chairman [Martin Bolland], plus yet another change to segmental P&L and higher debt levels from public bond issues does not yet reflect the potentially significant new levels of risk in the business. Free cash flow growth at around 4% compound annual growth rate is not enough for us. Keep selling. We cut our target price to 900p (12.2 times PE) from 1000p on higher net debt and lower free cash flow.

[We have] concerns on goodwill, growth, cash and quality of earnings.

Donnelly said he also expected more impairment charges after Capita announced £105m from two divisions. Meanwhile Berenberg said:

Capita’s 2015 results were largely in line with expectations, driven by 4% organic growth and a 20 basis point underlying margin expansion (up 40 basis points including disposals). While management guides for “at least” the same level of organic expansion in 2016, the company has its work cut out, considering it currently has visibility on only one quarter of that growth. With returns and free cash flow generation likely to decline further in 2016 following the contraction in 2015, we maintain our hold recommendation.

[jdb2005] 26/2/2016 18:30

EI - I slipped up and sold too soon so only managed about 60% of today's rise.

Must be satisfied though as CPI was the other day at 998.

[essentialinvestor] 26/2/2016 13:33

M, well done if you caught the bounce, would be tempted to lock in
a quick if me, rather than adding to an existing holding.

[minerve] 25/2/2016 13:30

Yes, 11th holding as of January update at 2.69%; I have Woodford in my pension fund.

I would suspect he will be topping-up on weakness, I would be surprised if it is anything less than Strong Hold.

[essentialinvestor] 25/2/2016 11:40

Is Woodford still in here M ?.

[minerve] 25/2/2016 11:37

Results are a bit of a mixed bag. Forward revenue projection has softened from last update. YTD contracts low against last year and average contract length has shortened. Margins are increasing.

Overall, no change for me, I may take this opportunity to buy more if it dips below 1000 as it did earlier.

Good company with good prospects and a great portfolio diversifier for long-term hold.

[essentialinvestor] 25/2/2016 11:01

Organic revenue figure the city did not like, or value of contracts won YTD?.

[tim 3] 25/2/2016 10:39

Joy!Well at least there should be some support at 1000.

[tim 3] 02/2/2016 10:14

Thanks been watching for a while.

Should be a long term hold

[minerve] 02/2/2016 10:11

Good buy tim.

I am watching this to increase my holding.

[tim 3] 02/2/2016 09:51

Bought this am.

[el chupacabra] 03/2/2015 18:54

can only assume this mornings price action was a tree shake.

[el chupacabra] 03/2/2015 12:02

did anybody listen to teh 'call'?

[jeffcranbounre] 30/1/2015 16:55

Is now a good time to buy Capita?

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[jeffcranbounre] 20/1/2015 18:02

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[armagan] 13/11/2014 15:10

Essential,

why would you argue the comparison is not valid?

[joan1234] 13/11/2014 06:16

3 Shares Falling Today: Capita PLC, Rare Earth Minerals PLC And Proteome Sciences plc
November 12, 5:37 PM

These three shares are firmly in the red: Capita PLC (LON: CPI), Rare Earth Minerals PLC (LON: REM) and Proteome Sciences plc (LON: PRM)

[essentialinvestor] 12/9/2014 09:14

To compare CPI to SRP is ridiculous imv.

[hyden] 24/6/2014 18:25

Armagan, I doubt that another bidder will emerge and given the board's recommendation, it is almost a done deal. I will now need to find a new home for the proceeds but that's a nice position to be in. :-)

(Apologies to other readers for the off topic).

[armagan] 23/6/2014 15:10

Hyden, It is certainly true some stocks because of the nature of their business and in particular their industry will have higher p/e values. But that tends to reflect across most of the major competitors of that particular industry. Rather than a single company (unless it has some kind of high barrier to entry like ebay).

CPI for me, a stock I have previously invested in and made money has had the p/e gone way out of proportion compared to its competitors like SRP, G4S. Its true they have had some bad news lately knocking both stocks. The outsourcing industry has its own peculiar features too. But for one competitor to have a p/e of 42 over the second companies with p/e of 19, is a big jump for me personally. But each to their own.

Kenz has also been on my radar, what do you make of its future potential?

[hyden] 17/6/2014 21:28

I agree with you to a point but I feel fair value can only be judged by taking growth potential into account. Thus I would not regard stocks such as BVIC, CPI, ISAT, KENZ and WTB as expensive yet they all have PE's over 15 according to your measure. These stocks have served me very well over the past few years and I believe that they will continue to do so and I remain invested.

I accept we must consider: Is the growth already priced in at this level and how much more outperformance is there? But I would argue that the market prices all stocks at fair value so you might as well chase those which are heading in the right direction? After all if a stock is 'cheap' then surely it is cheap for a reason?

I can't leave without mentioning NXT. This stock as always been 'expensive' but look at how well it's done over the past few years. I have few regrets, and not purchasing NXT is one of them. Thankfully CPI isn't and I am very happy to continue holding.

Best of luck to you and I hope that you enjoy your own successes. :-)

[armagan] 17/6/2014 11:15

Hyden,

I have some sympathy with your argument, but it seems the more widely used method of P/E is not the one you are suggesting. In fact its the first time I have heard this particular argument. If we are looking to judge the past and future earnings potential of a stock, your argument does make some sense. Typically though p/e is used to judge how cheap a stock is relative to its earnings. Would you not agree?

If you are using a slightly different yard stick to judge p/e surely the same ratios of p/e would not be valid for such a measure. I mean typically if a p/e of 10 is considered cheap, and 15 is considered dear. Then using the method you are using, surely you would have to also move those goal posts.

[hyden] 16/6/2014 19:59

I use Digital Look. Consider this: would you rather measure PE on a basis which allows an easier comparison across years and between differing stocks or do you prefer a measure which takes into account all manner of non-recurring revenue and costs? If you choose the latter then stocks are flattered by one-off windfalls and penalised by investment in future growth. You will surely agree that the former is the more realistic basis but as with all things we must exercise a measure if caution. I must admit I'm surprised to see the FT in your list but the others are of no interest.