Carillion Share Discussion Threads

[m4rtinu] 09/2/2017 09:17

Keep an eye lads/lasses. Is this finally on the move UP?

[gaffer73] 08/2/2017 18:56

It's worth noting that the biggest share holder also has the biggest short position. Just hedging their bets from the highs.

[m4rtinu] 08/2/2017 14:56

I believe it was posted that the company (?) said that the owners of the CLNs and the holders of the short positions were not the same. Whilst this might be strictly true, these "investors" (eg Marshall Wace) have many subsidiaries and I guess it would be possible for the ownners of the CLNs and the short holders to be part of the same group.

I say this, as the very good example of how this short arbitrage works (posted by another) shows how the cost of the dividend may be small compared to the overall investment package.

The website shorttracker clearly shows shorters increasing and decreasing positions by small % amounts, which RCT said they might do.

PS: apologies for an loose technical vocab.

[jimbo44] 08/2/2017 12:35

If I were shorting this stock I would be seeing the share price stuck in the 220 range and conclude that taking a new short position now might not yield much as there maybe just enough investor sentiment attracted to the 8.4% yield to keep the share price within a tight range. Therefore taking profit and moving on might be a smart bet. That could be taking a new position at a new high or targeting another stock. Shorters are the same as traders. Thay want to make as much profit in as short a time as possible. Sitting on a big profit that maybe will not improve much is in effect losing them money. This is all the more relevant since the company announced in December that targets were in-line and that maybe reflected in the results due 1st March. Otherwise the shorters will have their day at my expense. I continue to buy.

[kcsham] 08/2/2017 11:48

RCTIf you have checked the chart of shorters' bet in the past 15 months, you will see there are quite a bit of fluctuations. You will be sure that shorters had periodically taken some profit over that period of time.

[jimbo44] 08/2/2017 11:11

RCT you are right but also as you have said shorters will periodically take some profit to hedge against a sudden turn in sentiment. So there should be periods of share price rise regardless of whether they are right or wrong. They will want to let the share price rise to a point when a new short position is started and then they will make their money all over again. If, as with CLLN, a company is judged to be susceptible to share price fluctuation their task is that much easier. Unless the company is so fundamentally flawed there is no real benefit to sit on a short indefinitely once the profit has been made and even then a point will be reached when the short has run its course.

[jaf1948] 08/2/2017 11:00

RCT,I think there is a flaw in your logic. For every buyer there is a seller who must think it is time to come out of the share. Just because some shorters feel that the company may go down, is no more valid reason not to buy than seeing any activity on the share.

[rcturner2] 08/2/2017 10:53

The problem I have is that once you assign a non zero % chance of the shorters being right, then the investment starts to look very different. Even if there is a only a 10% chance that they shorters are right (and I think their hit rate is probably greater than this) then this is a risky investment.

[jimbo44] 08/2/2017 10:44

Shorters lose money as easily as traders as RCT says they behave much the same. Traders buy the drops and sell the rises so can be in and out a share daily if necessary stacking profits and making losses over time their profits are greater than losses. Shorters do the same in reverse opening and closing positions collecting profits/losses. In some respects CLLN is a shorters paradise the share price moves up and down significantly with the underlying concerns making a downward bet more likely so the high short %. From a traders perspective the trick here is to buy when the share price is judged to have fallen enough encouraging shorters to take profits hence they buy shares and the share price rises. Then to sell before new short positions are taken. Easily done with a trailing stop loss if you cannot watch the screen. As I said earlier I think that time is approaching so I am buying. If the share price falls there will be a dividend to collect this year at least.

[kcsham] 08/2/2017 10:40

RCTWhy I should worry about shorters' business? My only concern is my own investment, I often buy share that is being shorted for no good reason after doing my own research. Sorry for not noticing your recent posting. K C

[kcsham] 08/2/2017 10:30

edmundshaw,Totally agree!K C

[rcturner2] 08/2/2017 10:28

kc, I have already stated quite recently that shorters do not always get it right, the question is how often are they right?

[edmundshaw] 08/2/2017 10:22

To state the obvious, apart from the dividends, buyouts and liquidations (plus similar stuff like capital raising, return of capital), trading is a negative sum game for everyone in the long run, due to costs, when including short and long strategies (and any derivative positions). Dividends mean long strategies on average bear fruit (assuming total dividends plus buyouts more than cover the cost of companies going into liquidation). Short strategies only work out if the company is truly bad or the traders consistently outperform their peers (long and short). That extra cost of the dividend is onerous, which is a big reason why I almost never go short.

[kcsham] 08/2/2017 10:02

RCT I may be happy to sell my shares for profit at 300, it is a reasonable profit. When the share price moves so much, I believe the shorters will then leave for good and find another easier target.Of course, the shorters are move in and out all time to skimp their profit, investors are also collecting the dividends, a very decent one, at the same time. What is wrong with that?Are you telling me no shorters will lose money?

[kcsham] 08/2/2017 09:48

RCTThe shorters can sit on their bets and paying interest, while investors can sit on their shares and collecting dividends. Who can wait longer?

[rcturner2] 08/2/2017 09:47

kc, it is highly likely that the shorters have closed and reopened shorts at different times, meaning that they have already banked profits. This is how they operate. When it rose to 300p last year that may have been caused in part by some shorts closing and then reopening at 300p. The will also use other instruments to hedge which will deliver profits.

[kcsham] 08/2/2017 09:42

RCTThe shorts may be in profit on their book now. However, a booked profit is not a profit until they close their bets.As W1INDJ stated: " ....... when they offload the share price will increase, only way the shorters can win......"

[edmundshaw] 08/2/2017 09:37

To be honest, I am quite impressed with the shorters' discipline, not to mention (since there are apparently several of them) their apparent loyalty to each other as a group - to date. I'd have expected a dog-eat-dog at the bottom before now, with a race to get out first before any price spike caused by a closing competing short.

Wonder how long it will last?

[rcturner2] 08/2/2017 09:32

Wind, that is fair comment, but the shorters have much longer time frames than most people realise, they are not 3 month traders, they can sit on shorts for years.

[kcsham] 08/2/2017 09:28

Shorters' action will not be able to bankrupt or have material effects on a good company. They can only make their profit on a good company when the majority of the investors panic and sell to help them.

[w1ndjammer] 08/2/2017 09:15

RCT

they cant stay in profit for ever, will be costing them circa 10% pa

plus when they offload the share price will increase, only way the shorters can win

is a catastrophic event, however this company operate a tight ship. and are very

experienced unlike some others listed on LSE

do i buy my last tranch now or wait is the question..

WJ.

[kcsham] 08/2/2017 09:13

Shorters are traders, not investors. Shorters can be a winner or a loser just like investors. If the latter pick a good company, winning is always on the investors' side in long term.

[rcturner2] 08/2/2017 09:03

martin, as long as it takes

they are in profit, they can just sit there

[staylow1] 08/2/2017 08:47

The way its being shorted, it's almost like they don't want a bad set of results, they what the company to go into administration!

[m4rtinu] 08/2/2017 08:15

The shorting has been steadily building for 2 years. How long are they prepared to wait for a set of bad results?