Cavendish Financial Share Discussion Threads

[this_is_me] 15/12/2001 00:12

Most traded football clubs are trading at 52 week lows and going down. I presume that this is because the TV companies have overpaid for their rights and have no intention of paying as much next time. Given the rate the prices are going down are they soon going to be worth, from an investment point of view, buying? How many are going bust when the current TV deal is over and replaced by one paying, at a guess, half as much?

[this_is_me] 14/12/2001 19:48

Hilary

Thanks for the analysis. I am sure you are correct about which two are the best long term prospects. I am always wary about boys toys as an investment for the long term - that is why my largest holding is NHP - hardly a macho investment. I did, however, make 70% on Brit Reg Airways at a time and I am more interested in a similar, very oversold, situation developing here and giving a similar opportunity for a good profit on the bounce. The question is, given the situation regarding TV rights, how far down do they have to go to give a good chance of doubling the price on the bounce, with the added hope of a takeover.

PS Do you know of any cheap tickets to Australia, if so tell pommy. He should feel at home there - everyone will know his name.

[hilary] 14/12/2001 19:28

pommy,

Your post confirms something I've thought for quite some time .............. that you really are a muppet! Go back to your Recall thread - you're well suited there!!

[soulshaker] 14/12/2001 18:48

i wonder if dennis wise is still a shareholder? i expect he is

ss

[hilary] 14/12/2001 13:41

T-i-m,

The problem with footie stocks, imo, is that regardless of how much money they're offered through TV rights, etc., the Chairmen will generally plough it all back into the team plus a lot more besides. OK if you qualify for Champions League on an annual basis, but otherwise it's not really a recipe for financial success.

It's the smart clubs who derive their revenue stream from other sources that you should consider. With Man U it's the brand. With Chelsea it's the Village.

I've a strong suspicion that the CAV stock is being sold down by a large background seller who wants to dispose of their holding. Try to work out who it might be and then wait until the MM's have cleared the line before even contemplating buying. The attraction is a massive discount to nav and fundamentally sound business model. For now I doubt that they'll move off that bottom trend line other than for a suckers rally and could possibly break down through it.

Did you notice somebody dropped 50 @ 19. There looks like plenty more of that to come but at what edge?

Hil.

[bushie] 14/12/2001 12:28

Could alleviate some of the debt by selling JFH. Imagine him teaming up with M Owen.

I'm a Premiership neutral by the way. You'd laugh if I told you who I support as it's definitely a club that's going down the tubes!

[bushie] 14/12/2001 12:11

They're not the only Italian club facing possible bankruptcy either. ;o)

[this_is_me] 14/12/2001 09:08

Sell candidate (12 Dec 2001) [Auto] Help
Has fallen 66% since the peak on 23 Aug 2000 at 65.50. Has broken the falling trend down. This signals an even stronger falling rate, but the negative development may result in corrections up in the short term. Has had a strong fall after the sell signal from a rectangle formation at the break down through the support at 33.33. The objective at 25.25 is now met, but the formation signals further development in the same direction. RSI is, however, oversold, which indicates a potential short-term reaction up. Negative volume balance weakens the stock in the short term.


Previous technical comments: Sell: Price 32.50 (20011008) [A]
Sell Signal: Moving average.
Has fallen 41% since the peak on 20001103 at 55.50. Is within a falling trend and continued decline within the current trend is indicated. On reactions back, there is resistance against the ceiling of the trend channel. Has also received a sell signal from the moving average indicator, indicating a continued fall. It also gave a sell signal from a rectangle formation at the break down through the support at 33.33. Further fall to 25.25 or lower is signaled.
Assessment Medium Term: Sell
Sell: Price 31.00 (20010911) [A]
Sell Signal: rectangle formation. Resistance at 33.35, target 25.28.
Sell Signal: Short term trading range.
Has fallen 48% since the peak on 20000911 at 59.50. Is within a falling trend and continued decline within the current trend is indicated. On reactions back, there is resistance against the ceiling of the trend channel. Has also broken the support at 33.35 of a rectangle pattern, which signals a further fall.
Assessment Medium Term: Sell

[hilary] 14/12/2001 08:44

boyinblue,

You're entitled to your views on Bates. Personally I trust him more than I ever trusted Harding as I believe that for all his arrogance and diatribe he's only got the wellbeing of the company at heart, but, hey, it's no big deal.

Andy,

The press are always keen to quote the debt burden and I'm sure the readers of The Mirror all think it's because they've overspent on the football team. That's not the case though. £75m is in the form of a 2007 Eurobond for the hotel, etc. developments and the bulk of the balance was for the West Stand development. Sales of the infamous Millenium suites will ensure this is repaid ahead of schedule.

A lot of their current problems relate to the acquisition of Elizabeth Duff which was discovered to have a balance sheet hole a year or two afterwards. Bates' philosophy has always been that the football club is an expensive hobby without the European income - the real money should come from the hotels and leisure complex.

Do you realise how much Sky paid for their stake, btw? More than todays market cap.

Hil.

[boyinblue] 14/12/2001 08:09

hilary

As a follower of Chelsea you should remember or research the Great Cabra Estates Fiddle and then you would know why I think that about Mr Bates.But hell,if he sold his dairy farm before BSE that's ok.Are you sggesting he knew about it before the rest then?

[ahkeen] 13/12/2001 23:13

Hilary,

I thought they had debts of £97 million, and paying £30,000 per day interest.

That would surely put a dampener on the share price?

Andy.

[hilary] 13/12/2001 22:28

boyinblue,

Perhaps you'd care to explain why anything to do with Mr Bates has to be treated as suspect.

Correct me if I'm wrong, but didn't he sell his sizeable dairy farm shortly before BSE first broke. And hasn't he once saved the club from bankruptcy with the early realisation that a football club cannot survive as a standalone entity - hence the hotel/leisure complex.

If you're interested in why the share price has plunged I'd suggest you think about a more plausible reason than a dodgy chairman. Maybe think about who might be a large seller of stock in the market.

[flackwell vialli] 13/12/2001 20:18

As a Season Ticket Holder, and keen observer I would suggest that as long as we maintain Premiership status we'll be Ok. In essence, CFC have many property assets - Hotels,Shops, Apartments, Restaurants etc that are only now starting to contribute, given that the building work has only just finished.

On the football side, you may be aware that the club budgets the finances assuming no progress in any of the cup competitions which given our performance in Europe showed amazing foresight !

However, last night we went through to the Worthington Semis, which although not the glamour competition, still generates TV revenues, and has a European place at the end.

As with many businesses the key to survival is cashflow. This is an area which I believe the club is in reasonable control of. Although there is an outstanding Eurobond, CFC are ahead in repaying this.

Ultimately, the fortunes depend on the results on the pitch. I'll leave it to you to figure this out - although I'd caution you that the english press is essentially anti-CFC. In any event the club still has assets in the shape of players which can be sold should the worst happen.

In addition given Ken Bates age there must be sucession questions, but CFC is a club I can see many a buyer wanting to get hold of/willing to bank roll.

[boyinblue] 13/12/2001 11:30

Anything to do with Mr Bates has to be treated as suspect.History has a knack of repeating itself.

[marquis] 13/12/2001 11:14

Please note that I am asking this question, not stating it.

I know you have to speculate to accumulate, but what do other financial experts make of the results. Have the Club over extended themselves in the hope of future revenue streams?

I just wonder if they have. What do others think?

Chelsea FC website;

[turintrader] 25/9/2001 00:44

Which Four ???

TT

[marquis] 25/9/2001 00:36

I was appalled to hear and read about the disgraceful behaviour of four Chelsea footballers, who all appear to have had 'brain by-pass' operations!

Perhaps in time, Chelsea FC will quietly dispense of their services and sell them on to lower league clubs, if they will take them. Surely they don't deserve the ongoing privileges that they are currently receiving.

Their behaviour reflects badly on Chelsea supporters, sponsors and shareholders. The general public will unfortunately link Chelsea FC with anti-social behaviour again.

Please see;





Any other comments?

[davidblack] 24/9/2001 13:28

Possibly so

[marquis] 24/9/2001 13:24

Davidblack,

I don't know of any Chelsea fans who were behaving this badly, 24 hours after the terror attacks in America, in front of grieving American tourists.

However, you comment illustrates my opening comment;

"The general public will unfortunately link Chelsea FC with anti-social behaviour again."