Carillion Share Discussion Threads

[yump] 29/6/2017 08:11

Given the market works on sentiment and the future, wouldn't it be reasonable to think that some (a lot of ?) bad stuff has already been priced in, including a dividend cut. It certainly works the other way around with rising prices that appear to be too high when the actual results don't support it.

Or is CNNL in the weirdly unique position of being priced based on today ?

[rcturner2] 29/6/2017 07:33

nom

hxxp://www.moneyobserver.com/our-analysis/dividends-danger-11-shares-big-pension-deficits

Carillion tops the list and their share price has dropped since the article was published so the ratio is even worse.

[shawzie] 29/6/2017 01:01

nomdeplume if you read my posting history you will find why I think that a fair value is 200 to 220 as stated in Posting 2250.

[wskill] 28/6/2017 23:24

So nobody thinks the price of CLLN went up because of carneys comments that interest rates will rise strange indeed.

[wllmherk] 28/6/2017 22:51

Is the dividend sustainable though nom, I'm a holder and bought for income but usually a yield approaching 10% is unsustainable ?


wllm

[nomdeplume] 28/6/2017 22:41

RCT : "Carillion has a debt and pension deficit problem that is way out of line with other companies." The relative debt and pension deficit is a lot higher than many companies, but not all: e.g. BAE Systems. However, that's not really the most important issue, is it? The important issue is whether or not it's manageable. In a time of low interest rates, debt is not that big a problem. When this short started, the hedge funds were clearly on to something. However, as the share price goes down the reasons for shorting become less valid. My earlier post presented a scenario which was clearly ludicrous: a profitable company with a PE ratio of 2.5, and a dividend of 20% which is well covered. You talk about the debt and pension deficit being way out of line with other companies, but I doubt you can name many companies with a better PE ratio and higher dividend than Carillion's current figures.

[kcsham] 28/6/2017 17:09

nomdeplume - "No one seems prepared to suggest what might be fair value for Carillion."I will not invest in a company unless I believe it is with a good value (not fair value). Judging the trading price range of Carillion lately, I don't believe the shorters will stay on too long. The update on 11 July would be crucial. I am content if there is not going to give us any unpleasant surprise.

[yump] 28/6/2017 16:23

Well you can say this is a totally different business etc. etc, but I have been invested in CAR for a few years now and at the 120p bottom, the chatter about their pension fund problems was at its height.

Its interesting to see what the chatter is about now the price has shot up, because the pension fund problems appear to still be there (although not quite so bad) and yet they are no longer discussed.

I think that's a very good illustration of how the market works from the point of view of sentiment.

Also as the price went up, there wasn't anything of great note announced that wasn't already mostly known already. They just confirmed on track and quite good prospects.

But everyone is much more positive, because the share price went up.

(As per usual, all the brokers and analysts notes and upgrades seem to come well after the bottom, so they all look credible.)

[rcturner2] 28/6/2017 15:57

JAF, the hole in your analysis is the first sentence of the second paragraph. Carillion has a debt and pension deficit problem that is way out of line with other companies.

[jaf1948] 28/6/2017 15:15

I think that purely based on empirical evidence - viz. nothing has happened over the past two and a half years to explain the fall in the share price except for the existence of the shorting.

There are plenty of FTSE250 companies with similar debt and pension liabilities and yet their share price has not been forced down like CLLN. So therefore I conclude that CLLN is a special situation.

QED, as we used to say in school.

P.S. That is not to say I will be correct in the future about CLLN - it may well go down further even without the shorting.

[wallywoo] 28/6/2017 15:09

OK I hear you Jaf, you think this is a special situation where normal stock market sense does not apply. Good luck with that.

[m4rtinu] 28/6/2017 15:04

Not sure how much of CLLN's support service/ construction work relies on public spending, but I imagine that source will have been slow over the last year or so. I have read that some Tory MPs don't like HS2, for example. Can't say I can see the value of it nationwide, but would boost economy along its path whilst in construction.

Also, economy slowing generally, which won't help.

Can't really see where any SP-shifting good news might come from. Am hanging on hoping the ship will turn :)

[jaf1948] 28/6/2017 14:22

wallywoo,

I have lost enough on the stock market over the past ten years to have bought a new Aston Martin so I am well aware of the risks. However, CLLN is a totally different beast, being driven not by market forces but by shorting.

Looking for embedded muppet formations in the CLLN graph or any other investment techniques is meaningless, IMO, with this share. If the next update in July is poor, people will say the shorters have been vindicated - I will ask why did it not fail at the start of 2015 when they first started the massive shorting. If the news is average, no doubt the shorters will continue their grip as they are making plenty of money regardless of how the company is doing. However, if the news is very good, then the shorters may finally give up and the company can return to being judged by the market.

[wallywoo] 28/6/2017 13:53

lol, the stock market makes us all eat humble pie every now and again Jaf. The trick is to win more often and by a larger amount, and to lose less often and by a less amount.

That is my whole point here, sometimes hanging on hoping a ship will turn when there are currently no signs that it will, tends to point to the 2nd scenario and loosing large. But its your risk.

[jaf1948] 28/6/2017 12:28

yump,

Impressive insight, but unless this bloke used phrases such as 'double bottom reversal', 'candlesticks' and 'momentum trading', he clearly was not as expert as some people on here think they are.

[yump] 28/6/2017 11:30

I had a chat in the pub yesterday with an investment guy I know, specifically about CLLN and BOO, which revealed some interesting pearls of wisdom:

First of all he said he couldn't see the bottom for CLLN and also couldn't see the top for BOO and then, after my voicing frustration with CLLN, followed that with the startling revelation that the share price will go up 'when it goes up'. I didn't ask when he thought BOO might start going down - I assume the opposite comment would have been forthcoming.

Not often you hear that sort of insight.

[kcsham] 28/6/2017 08:14

DAVEOFDEVON - I respect your request!

[daveofdevon] 28/6/2017 08:04

On March 18th I asked for an end to the agro on this thread mainly between RCT and KC and peace returned. Please don't start again.

[rcturner2] 28/6/2017 08:00

wllm, no I sold mine quite a while back. I have held twice in the past and made good profits both times so I have a soft spot for Carillion. It has many factors that make this a buy for me, but the shorting and the very poor momentum put me off at the moment.

[yump] 28/6/2017 07:53

Isn't that question one of the disallowed ones on financial BB's ?
;-)

[wllmherk] 28/6/2017 07:33

RCT, out of curiosity, do you hold CLLN ?

wllm

[rcturner2] 28/6/2017 07:18

kc, it's a shame the share price responds to the quality of your posts rather than the quantity, eh?

[ed 123] 27/6/2017 23:13

I know what you mean, Wllmherk, the share price signifies how the market perceives the value of the shares. However, that's only a crude indicator for the dividend. If you look at the cash flow and balance sheet, you'll be able to judge for yourself their ability to go on paying the dividend.

[wllmherk] 27/6/2017 22:15

Well I intend to hold come what may, can't see the dividend being maintained unless there is a substantial tick up in the share price

wllm