Carillion Share Discussion Threads

[wallywoo] 20/6/2017 10:51

kcsham, stock market theory takes into account fear and greed. Let the share price action tell you what to do. I cannot tell you how many times I have seen investors stating how cheap a share is and that it cannot possibly go any cheaper, then it does (eventually you finding out why).

How do you know serious bad news is not coming for CLLN? you cannot. Let the share price action tell you: and at the moment it says NO

[kcsham] 20/6/2017 10:27

The shorters will just like our holders, we will eventually close our positions when we feel fit. Is that inevitable? Somebody wants to get back to own Carillion share but refuse to buy when the share price going down and hope it will go lower. That is "greed". The same person will refuse to buy back when the share price is going up and worry about paying too much. That is "fear".What a sorry pair.K C

[wallywoo] 20/6/2017 09:40

guys apart from me and RC, you all seem convinced this is just a waiting game for the share price to shoot up. However, the constant flow of posts that say that is just "ramping". Please wait until there are signs that this downtrend is turning, then by all means ramp away. Until that time you are just encouraging investors to "catch a falling Knife".

And many a fortune has been lost doing that

[rcturner2] 20/6/2017 09:27

Add Balfour Beatty to that list and Mitie. See a connection?

[rcturner2] 20/6/2017 09:26

nom, I remember Rok going bust and Connaught, both completely unexpected. I remember Mouchel screwing up and Interserve getting smashed. All in the same industry as Carillion.

[kcsham] 20/6/2017 09:12

nomdeplume - I like your word "inevitable". That is inevitable, nobody could change that!K C

[nomdeplume] 19/6/2017 16:12

Unless Carillion goes bust, which no one is suggesting, at some point the hedge funds will have to buy shares. The first to close their short will have an advantage, so once one goes they will all go. There are those who hint darkly that at some point the share price will drop into some abyss. However, these doom mungers never suggest what would be a fair price and merely regurgitate the same old arguments. Carillion is a profitable company and its PE ratio is low. It could solve its debt problem if it had to by reducing its dividend to what would still be a good percentage. Every analyst covering Carillion has a target price above the current share price I'm quite happy holding. It's just a matter of time before the inevitable happens.

[kcsham] 19/6/2017 15:54

I believe the oscillation of the share price within a small range will continue for a while before we see much higher than 200. Shorters are skimming minor profit day after day at the moment. We still need to wait for a bit longer with some good news before the trend changes.I am still content and waiting for the next dividend.K C

[m4rtinu] 19/6/2017 15:29

Just broken 200p. Here's hoping it holds (for at least 5 mins!).

[m4rtinu] 19/6/2017 15:28

Poacher - I posted this on 23rd May:

Been trying to see if shorts are reducing or not. Simple answer is that shorttracker shows 22% as latest, so very little change (-2% pts from high in Mar 17) over recent months.


Of the co's with the largest short positions:

Co Name: Current % Highest % Any pattern? (R= reducing, I= incr, U= unchanged)

Blackrock: 3.39 4.4 R
Marshall Wace: 3.31 3.31 I
Thunderbird: 3.23 3.23 U since Aug 15
Immersion: 2.21 2.21 I but U since Oct 16
AKO: 1.78 2.85 R from high between Mar 16 & Mar 17 (to 0.42) then I
Cape View 1.57 1.6 small R but U since Dec 16

All of the above and others, (ex Blackrock 1.41%) had a short position of < 0.5% prior to CLN offering in Dec 14.

So no real pattern to positions of short holders as far as I can see.

Cheers MU

[poacher45] 19/6/2017 14:07

Hi they are one of the chief shorters but to me there mood fluctuates on a daily basis but the trend is down.
CARILLION PLC 3.69% 2017-04-03
CARILLION PLC 3.87% 2017-03-30
CARILLION PLC 3.96% 2017-03-28
CARILLION PLC 4.05% 2017-03-23
CARILLION PLC 4.18% 2017-03-15
CARILLION PLC 4.24% 2017-03-09
CARILLION PLC 4.30% 2017-03-08
CARILLION PLC 4.40% 2017-03-03
CARILLION PLC 4.30% 2017-03-01
CARILLION PLC 4.21% 2017-02-27
CARILLION PLC 4.10% 2017-02-24
CARILLION PLC 4.01% 2017-02-23
CARILLION PLC 3.92% 2017-02-21
CARILLION PLC 3.83% 2017-02-17

[nomdeplume] 19/6/2017 12:36

Poacher: Interesting, but I'm not sure exactly what to make of the data. Small changes over time and, to some extent, an indication that the short is reducing.

[poacher45] 19/6/2017 10:51

Blackrock's record

Company % short Date changed/created
CARILLION PLC 3.35% 2017-06-14
CARILLION PLC 3.42% 2017-06-02
CARILLION PLC 3.39% 2017-05-24
CARILLION PLC 3.41% 2017-05-19
CARILLION PLC 3.39% 2017-04-24
CARILLION PLC 3.42% 2017-04-19
CARILLION PLC 3.38% 2017-04-12
CARILLION PLC 3.43% 2017-04-11
CARILLION PLC 3.50% 2017-04-10
CARILLION PLC 3.47% 2017-04-06
CARILLION PLC 3.55% 2017-04-05
CARILLION PLC 3.69% 2017-04-03
CARILLION PLC 3.87% 2017-03-30
CARILLION PLC 3.96% 2017-03-2

[nomdeplume] 19/6/2017 09:20

The next trading statement is less than a month away and maybe very significant. Even an "in line" statement may produce a boost for the share price Personally, I would be quite happy to see the dividend halved, it would still be 4.5%, providing the saving was used to address the debt problem.

[sux_2bu] 19/6/2017 09:19

Down, it's going down...no need to guess....it's pretty obvious the trend.

[jaf1948] 19/6/2017 09:11

RCT,

Yes, I agree with you, which makes it even more difficult to guess where this is going.

[rcturner2] 19/6/2017 08:57

JAF, the answer to your question is that it is a bit of both, the shorters are here because they think there is a good chance the price will fall and certainly others (including me) sold when the extent of the shorting became clear.

[kcsham] 18/6/2017 09:11

Hi Ed 123 - You are right that there people in doubt (not necessary to be the shorters who feed on people's fear) about Carillion, so there are sellers. I am one of those who are not in doubt so I bought due to the undervalued price of the share. Of course, this are all down to individual's opinions. Whatever, thanks for your reply of my request.All the best!K C

[jaf1948] 17/6/2017 19:44

Ed,

I am in no way disparaging your comments which are clear as well as objective. However, it always comes down to the same question with CLLN - what came first, the chicken or the egg ? Are the shorters here (and remember they have been for over 2 years) because, in your words,'there is doubt in the market about Carillion', or is there doubt in the market about Carillion because of the shorters.

[ed 123] 17/6/2017 17:51

Hi K C.

I can't give an educational session, just say how I see things. Others may agree or not. That's fine.

Regarding cash flow, I can't see your quoted figure of 279.2m underlying. I guess it's a typo and you meant to write 277.1m underlying? Anyway, it's only a small difference.

My first comment would be that underlying figures are of interest but the unadjusted figures (especially in the case of cashflow) are what really matters. Unadjusted cash is real cash and can be spent to pay bills and keep a company afloat. Underlying cash is not the the same; some of it is real, available funds and some is not.

If you look at the cash flow statement for 2016 you will see that Net Cash Flow from Operating Activities was 73.3m. Ideally, the cash flow should be used to invest in and grow the business, and to pay a dividend to shareholders. The dividends to shareholders totalled 82.7m. So, you will see that dividends paid amounted to more than net cash flow (and the same was true in 2015 too). That is why I described the cash flow as being inadequate.

Others may say, "Ah, but if you leave out x, y and z because they are exceptionals, then it presents a more healthy picture." The decision on that is up to the reader.

I should add that I don't have any inside knowledge of Carillion and I am not accusing anyone at Carillion of fiddling figures. There is doubt in the market about Carillion. That is almost self-evident from the level of short selling. All I am doing is trying to interpret their figures. If I reach a conclusion that Carillion would be a good investment for me I will buy. If I don't, I won't. I'm not holding presently but have held in the past.

I hope that explains my position a little better and, as usual, no advice should be read into what I write. Good luck.

[lord gnome] 17/6/2017 15:47

'If' wishes were horses, then beggars would ride.

[nomdeplume] 17/6/2017 08:24

KC - nice post. I have always been suspicious of statements which rely on the word 'if'. Where I grew up we had a saying, "If your Aunt had balls she would be your Uncle!".

[kcsham] 17/6/2017 00:08

Ed 123 - You said: "Carillion's problems are the (lack of) strength of the balance sheet, the inadequate cash flow and the concern that some figures might have been massaged (ie. reported profit, receivables and payables).......Investors are presented with summary figures in financial statements and asked to take them on trust."My comments:It was noted that in the final result for year ended 31 December 2016, Carillion's underlining cash flow from operation increased from £244.9m in 2015 to £279.2m in 2016, an increase of 13%. Should this cause the share price of Carillion to rise instead of fall?Regarding the lack of strength of the balance sheet of Carillion, I cannot say its balance sheet is brilliant. However, I compared the leverage ratios (I used total liabilities/total equity) of Carillion to those of Costain and Balfour Beatty (I believe these companies are in a similar sector).The results are shown as follows: RatiosCompany 2016 2015 2014 2013Carillion 5.08 2.81 3.35 2.70Costain 5.49 3.42 3.12 7.80Balfour 5.27 4.54 3.26 4.52If you check the recent performance of the share price of these companies, only Carillion has a substantial fall instead of a rise as for the other 2 companies since August/September 2016. If anybody believes "figures might have been massaged (ie. reported profit, receivables and payables)" , he/she should forget about Carillion shares or better forget about buying any shares. There is a jungle out there.Ed 123 - I am not an accountant or knowing anything about accountancy, so I am willing to listen to your educational session on the matter. K C

[ed 123] 16/6/2017 19:42

Hi Edmundshaw.

When the dividend gets overstretched ...

It's not the dividend that's getting overstretched (though I think I know what you mean). Carillion's problems are the (lack of) strength of the balance sheet, the inadequate cash flow and the concern that some figures might have been massaged (ie. reported profit, receivables and payables).

Read the remarks of the external auditors in the 2016 annual report, eg.

... a high degree of judgement in: assessing the level of the cost contingencies to recognise; appropriately recognising variations and claims; and estimating the revenue recognised by the Group based on the projected final out-turn on contracts.

More positively, I agree that, if they cut the dividend and judgements used in the preparation of the accounts turn out to have been fair and reasonable, then the share price could jump, and that would be boosted by closing of shorts.

It's a tricky one for private investors, as it is not possible for them to get hold of the information they really need. Investors are presented with summary figures in financial statements and asked to take them on trust.

[kcsham] 16/6/2017 19:37

edmundshaw - Good post!K C