Carillion Share Discussion Threads

[jaf1948] 28/1/2017 12:11

Thanks for answering. However, I think the pension deficit is influenced more by bond rates than by the company's profitability, though that must have some effect.

[rcturner2] 28/1/2017 10:28

If you think this will make any difference to the shorting you guys really have no idea how the market works.

[rcturner2] 28/1/2017 10:26

JAF, it is different from most in relation to the size of the deficit relative to the profits they make. They are already on wafer thin margins with pretty significant debts.

[spoole5] 28/1/2017 07:20

I have a pending order to sell mine at £4 lol!!! Does this actually stop them loaning out the stock though?

[struggling beginner] 27/1/2017 21:22

In his post. 06.11.2016. P155. lab305 suggests that my/your broker may well be lending my/ your CLLN shares held in nominee account, to the 'shorters' to be used to depress the price of my /your shares! He goes on to suggest that you can prevent this by putting your shares up for sale at a limit way above the expected price (he suggests double). Any comments appreciated. Thanks.

[this_is_me] 27/1/2017 20:14

The US hedge funds are going to be in trouble if both the £ and CLLN rise at the same time.

[essentialinvestor] 27/1/2017 18:06

Expected CLLN to warn over the past couple of years, which never happened,
yet the share price has still been hammered.

[valhamos] 27/1/2017 18:00

I am not convinced by the pension deficit argument. According to a quick Sharelockholmes query I put together TSCO BA. GKN MGAM all have greater pension deficits in relation to profits together with sizeable debt than CLLN yet their share prices are on an upward trend. I think it must come back to how the company's prospects are perceived - the market is expecting these other companies to grow/recover whereas for CLLN it is factoring in a decline for some reason.

[edmundshaw] 27/1/2017 16:39

At the current price I would say on the face of it that Carillion is cheap. £3 is perhaps somewhere around fair value... on the face of it. But of course there are some risks.

Yes they have a statutory pension deficit which is bigger than most (quite a lot bigger), and they have a reasonable amount of debt. But pension deficits are somewhat misleading due to the methodology of their calculation, and are being reduced by rising interest rates, and most people expect those interest rates to carry on up. Debt is not an issue currently, but rapidly rising interest rates might hurt.

Last March Carillion announced a dividend of 18.25p - and with more expected to come. The payout also remains covered 1.9 times by underlying earnings. Cash flow ROE etc all look good.

I bought some myself at 221p as I think the risk is now to the upside. To my mind the biggest risks are a combination of execution risk and a lack of growth. But clearly some Americans still think this is expensive. Yer pays... etc... choice.

[jaf1948] 27/1/2017 16:38

RC,

One question: You said 'I believe you are making a serious mistake if you think that Carillion's pension deficit is just very similar to lots of other company's deficits. It's not.'.

Why is it different please ?

[deanowls] 27/1/2017 16:17

To be fair RC, did you see all those tips in the IC telling us to invest in aim Chinese companies last year?

[jaf1948] 27/1/2017 15:39

I did not say it was 'just very similar'. I said 'I have no reason to believe that CLLN's deficit is any more unmanageable than other companies and their debt is also high but not unmanageable' which is not the same thing.

As a holder, I make sure that I know all that I can about a company in which I invest, which includes talking to executives in the company itself. Of course, CLLN is in a risky position at the moment, which is one of the reason why the share price has fallen so much recently. Shorters are not helping and, like you, are focusing on the pension deficit and the debt. I believe these things are both serious but manageable. We will see what the future holds.

[rcturner2] 27/1/2017 15:34

JAF, I can see that you have made your mind up about it, which is fine. However as a non holder I believe you are making a serious mistake if you think that Carillion's pension deficit is just very similar to lots of other company's deficits. It's not.

[jaf1948] 27/1/2017 15:28

There have been many articles in IC about CLLN - which one are you referring to ?

But why do you think that IC know better how CLLN are handling their pension deficit than CLLN do ? I asked the company instead for information which I find more informative than IC.

[kfp] 27/1/2017 15:24

Nervous sellers before results 1st March ?

[jaf1948] 27/1/2017 15:07

Factually untrue ? Do you know how CLLN and other companies are tackling their deficits ? No you don't so you cannot say whether it is true or not.

I am happy with my research, my discussions and my holdings in CLLN. If you see it differently, that's what makes a market.

[rcturner2] 27/1/2017 15:05

Obviously not if you are happy to state "I have no reason to believe that CLLN's deficit is any more unmanageable than other companies". Which is factually untrue.

[jaf1948] 27/1/2017 15:03

RC, I have been in touch with the company and discussed the pension deficit with them - is that sufficient research for you ?

[rcturner2] 27/1/2017 14:45

JAF, it might help if you did some research then. CLLN have one of the biggest pension deficits relative to profits on the whole market.

[jaf1948] 27/1/2017 14:43

Most major companies have had a pension deficit since bond yields fell and I have no reason to believe that CLLN's deficit is any more unmanageable than other companies. Their debt is also high but not unmanageable.

The shorters are, however you dress it up, taking a gamble of CLLN not doing as well as expected. There have been no profit warnings and no cut in the dividend (yet) so you pays your money and takes your choice.

[shawzie] 27/1/2017 14:35

shawzie - 13 Oct 2015 - 14:30:57 - 2250 of 3334 Carillion - Charts & News - CLLN
Perhaps a share price in the range 200p to 220p with a halving of the current dividend, a start in writing down intangibles and a reduction in creditors might change investors from short to long.

Still of same mind.

[zcaprd7] 27/1/2017 14:30

220p reached. Another 20% purchased. 40% of funds deployed now...

[rcturner2] 27/1/2017 14:08

kiwi, it is also the pension deficit.

[cc2014] 27/1/2017 13:52

I find this stock most interesting and have been watching for around two years ever since the price decline started.

The price action is telling me something but I'm not sure what it is. Or rather it's telling me to keep out but looking at the dividend stream and profitability it looks like a buy to me.

This sort of thing happens. My biggest holding is CTO (construction sector) which is up 22% today.

I guess I'm going to wait for 200 and see what happens there. Strange share

[kcsham] 27/1/2017 13:24

You may buy in when the share goes back up to 250 or more. The choice is yours!By the way the shorters up their bet to 21.9%. A huge amount!