Coral Products Share Discussion Threads

[humdinger] 18/4/2002 20:48

I have been on this BB quite a while and have profited from other posters recommendations and since there isn't a thread for this Company on the PBB I'll start it off. Chart isn't a pretty sight as I write (see below) but here are a few thoughts:-

- Core business is that they make the plastic boxes that you put your discs/videos in (films/music and games) with some good customers including MS in the UK. Ole Billy's box launch should see some good volumes soon, I reckon. Do a lot with many PSX software Companies too – check out the boxes and look for a "C" logo – that is Coral. They used to make plastic buckets and stuff but that is now less than 5% of turnover.
- Company suffered in past by having the Co-op pension fund owning 20% - They decided to sell the lot so it took a while to clear all the shares.
- This is in effect a family run business and they don't sell their shares which I like very much – the shares are tightly held but I have more than just a few as the dividend is excellent (almost 10% and not likely to drop much). I tend to find that well run family owned businesses are rare but they usually look after the shareholders for obvious reasons.
- They were caught by the oil rise price hike though their contracts allow them to pass on any rises – smartass FD.
- Slow-down in game sales while waiting for new consoles + slow sales of CD's (40% of t/o but declining) affected their business in past year. Their reported slowdown in music CD box sales are what gave me the idea to short EMI a while back – useful that was ;-)
- They make a profit, pay a good dividend, have low p/e and have net assets circa 50% above the market value (and they are real fixed assets not goodwill and other nebulous valuations). CRU are the last remaining independent producer in this field and are a major player in a niche market so with directors owning more than 50% they won't sell the company cheap to a predator. Oh BTW they also have a buyback agreement in place (little used) – I reckon just in case they get a problem with any other Institution in the future.
- They have invested profits in up to date DVD manufacturing equipment (with more coming in Summer 2002 so they believe in investing for the future) and at the interim stage said they were running the older video box lines at full capacity with signs of improved sales generally albeit lower than same time last year.
- Finally they are in a growth business, unless everyone stops listening to music, playing games, using computers or watching films.

And lastly for all you traders there are no major institutional stock holders so any buying or selling goes straight through to the price so provided you don't sell 'em you'll be ok but ......... if you do short 'em down below 30p then I and the Directors will be buying a few (I did recently after Sep 11 fall). The spread is wide but closes when the share becomes more regularly traded. If CRU do get bulk of box business for Billy's box then the profit should grow very quickly. Oh I also like the Directors and the FD 'cos they reply to letters and questions wot I asked in the past. Can't knock that can you?


Why buy now? Well they are due to announce their results shortly (beginning of July) and I have been waiting for a buy signal before posting. Last year in Feb. they posted a warning. This year, just before the close period and very early in this tax year the Sales Director sold £14k's worth (RNS 18th April) of shares and then bought them back straight away and stuck them in his and his wife's ISA and that is the max allowed per year – must think Coral are a good investment.

After all that hype I bet this one goes belly up next week – then again...........good luck everyone and dyor, shares go down, I talk a load of tosh, etc., etc. Here comes the chart which when I first post is at best cr*p but by the time you read it............ might be looking much better ;-)

John B.

[netcurtains] 09/11/2001 09:20

Sorry - Yes I meant the boxes. Clever little boxes made the richest man in britain the richest man in britian.

[chrisg] 09/11/2001 09:05

Are you really sure they make CD's, DVD's and Game CD's?

Just been on their website and all they make is the plastic boxes they go in. Oh and a load of plastic housewares like boxes and buckets etc.

Latest comment about outlook was at the AGM when the chairman said: "...the current year started slowly with below average demand...which will result in a fall in profits for the first half...however, demand has returned to normal trends, depending on trading climate we look to current demand continuing at or around present levels"

These guys appear to only be into the packaging.

[netcurtains] 09/11/2001 08:54

Yes they make DVDs and CDs and Game CDs.
The market so I hear is booming.

[chelsea blue] 28/8/2001 19:57

Hi John and Monty

Sorry but I seeem to have missed out on the recent discussions.
I have tucked Coral away for now, content to sit back and collect the divi's. Better return than a building society and fairly defensive(important in a bear market) as it trades at a discount to NAV, making significant investment in new production machinery and refreshingly, good management.
Monty, I know you have been a staunch supporter of Coral, we have enjoyed many discussions, I am sorry to hear you have sold out. I wish you well with your new investments.
Today Coral jumped 3p on very thin buying, the MM's are obviously acting very defensively and don't want to get caught with their pants down should significant buying take place. We shall see.
As we all know it doesn't take very much to move the share price, very tightly held stock.

[humdinger] 22/8/2001 00:59

Monty - fair enough reasons and you could be right.

On the MM pricing I have found that you have to push as many brokers stick with their favourite MM's and use their quotes. However when push comes to shove I have often got an MM who is on the bid to sell to me at the offer - they hate to lose the business if they don't have to. Goes to show MM quotes can be misleading :-)

John B

[monty burns] 22/8/2001 00:38

I think your escapades with the MMs show my problem with it - holding in any quantity makes them difficult to get rid of, especially if there is bad news. A few stock sales does see them hit the floor, regardless of the long term view.

I know I have changed my tune, it's just that I can't see these going very far in the near future - when the first half results come out, they will be compared with the very good first half last time and on a headline basis will look bad - they have already said first half has started slowly and from your post any real action will be next year - so that will probably panic a few into selling, exactly the scenario above. Would have held on for the divi, except saw the offer fall from 43 to 40, so decided to cut and run.

Needless to say, if there a bad first half and they plummet, I'll be back.


PS - Why did somebody get 39p for 25k when I only got 38p for 17k and I sold first?

[humdinger] 22/8/2001 00:16

Monty - MM's wouldn't play ball - they wanted 40p - cheeky or what when I know they are sitting on your stock at 38p!!

After trying both MM's the best I could get was 10k strictly on the basis I didn't put in more 10k buy orders at 39p. Well, at least that means they aren't flush with stock. Mind you nothing to stop me putting in more orders tomorrow if price stays below 40p :-))

Tony - you still in grizzly bear mode?

(Edited - offer raised to 41p after my buy - thought they might!!)

[humdinger] 21/8/2001 11:45

Monty - weird or what - nothing posted for 6 weeks and we both post at the same minute. I think you should have waited for the XD date but good luck.

John B.

[humdinger] 21/8/2001 11:41

TTT

Hi Tony/Monty,

This goes XD next Wednesday (2.3p = which is over 6% yield before tax). Sony still not using their boxes for PSX2 and with Billy's box not out til 2002 then unlikely to get any volumes for the MS cases this year (they do most of current CD cases for MS). I am looking for spread to narrow and if it drops below 40p after XD date will be buying more. Also don't forget the oil price seems more stable at around $25 and with weak dollar their margin should be improving again now.

Whatever happens the CD/DVD market will keep growing and with Nintendo also going CD based with their cube this is an excellent recovery play and they actually make money too - I like David Shalom too - shrewd cookie - and that buyback is still in place.

Tony - weren't we bad Sunday - but give it time - Gronks and Zen look like they will terrify defences - love to see them skin Campbell and Adams!!

John B.

[monty burns] 21/8/2001 11:41

Sorry about this - I sold out at 38p just now. Still to show up.

Dismal market, better opportunities elsewhere. Against my long term judgement, it's just the market. Think even my 17k shares will drag it down further - maybe temporarily, maybe not.

Sticking to larger caps in future (apart from PLM, which offers a once-in-a-lifetime bargain, don't you know.......)

EDIT: must have posted at exactly the same time - looks like you can have mine if you're buying.......

[chelsea blue] 02/7/2001 16:25

Monty

Even though I am a fan of Coral, to sell 15,000 was a very wise move in my opinion.
You should not be overexposed in uncertain financial climates.
Many pundits predicting cloudy weather until the end of the year, after selling WTE (doubled my money in 7 weeks) I have a cash pile earning interest while I wait patiently for clear blue skies.
If Coral quickly put on weight then I too will reduce my exposure, if they stay slim then I will continue to collect my fat divi payments as I wait patiently for the right price.

[monty burns] 02/7/2001 10:14

FYI - I sold the 15,000. 48p maximum sell price during last few months - bought them at 37, just playing safe . Still have 17k+.

Happy to hold the rest indefinitely (I think......)

[chelsea blue] 02/7/2001 09:58

The day before the results, up 10% in early trades.
Does someone know something?

I remember much selling during the 24 hours before the profit warning.
Coral suffer from news leaks.
Fingers crossed for better than £2m profit and/or positive Chairman's statements and/or Ferster Family buy out.

[chelsea blue] 25/6/2001 16:38

Results announcement on Tuesday 3rd July.
Watch the trades on Monday 2nd July for clues.
Fingers crossed for positive Chairman's statement to counterbalance expected poor results.

[monty burns] 19/6/2001 14:44

47p to sell.

Really should sell those ones bought for 37p.

And yet, and yet........

Think they're worth more. And if a share is still rising...........




Update: Someone clearly reading these boards.....sell price went from 47p to 43p shoartly after I put that in. No trades. Offer price unchanged.

Bizzare.

[chelsea blue] 18/6/2001 00:45

Monty

I also have been swapping my success stories for cash MCA, REX and WTE now missing from my portfolio as I have cashed in with high profits.
I'm currently down on CRU, it does not worry me too much as I am confident it will turn around in the medium term and meanwhile they pay good divi's which makes them a HOLD.
Apart from HFX (done well) almost all of my portfolio is a bit risky or are old dotcom investment certificates (waiting for recover in 2015) which adorn my study wall as a reminder to research the fundamentals thoroughly before buying.
I was into oil with WTE and FOG, I might buy again as their price hopefully falls in the next few weeks pre-results of a new site. I think PLR are a sound investment, less potential upside but less risky (you can't have it both ways), DNX are a good play but as with WTE and FOG it is with fingers crossed.

Tony

[monty burns] 15/6/2001 17:45

The funny thing is that when the results are published the EPS, while lower, will still be around 7p (more?) according to the broker - makes the net asset value around 49p+7p =56p.

Tend to agree - it's about future prospects.

Sadly I have no 96% gains to report. Some nibbling losses (PILK, MSB, PRSC) one small gainer - PLM (until today, when it was screwed along with the techs) and one which is a 50% gain so far and will be a 97% gain and then some........PLR.

The rest of my moolah is looking for a home - probably more into one or more of the above at the mo. Maybe even CRU, but then that bloody spread.......


Cheers.

[chelsea blue] 15/6/2001 16:54

Hi Monty

I have also noticed some recent share price fluctuations. Because I thought the annual results announcement was due in about 3/4 weeks I expected some activity in the lead up period.
The last Broker forecast predicted profits down by about 25% for the full year and then recovered during 2001/2. If this forecast is accurate, do you believe the fall in profits is already factored in the price or will the price fall further?
By my calculation the last published nav equates to 49p a share and should help underpin the current price.
My opinion for what it is worth is that I would expect the share price to react more to the Chairmans statements about the future prospects than on the last year's results, provided of course they are close to expectations.
For the record, in my posting of 8 May'01 I referred to the risky shares in my portfolio; to update you I sold WTE with a 96% profit in less than 7 weeks. The price shot up 75% while I was on holiday. I can now well afford another holiday with the profits, I should try to go away when Coral announce their results and hope for a similar rise (dream on).

[monty burns] 14/6/2001 00:01

Showing some signs of life?

Some larger trades over last few days, still only a few grand, but more than normal. Price just ticked up for the first time in a couple of weeks.

Year end was 30th April, no announcement over date yet, just think they're coming back into focus.

Not before time.....

[chelsea blue] 08/5/2001 09:50

Monty
I'm very pleased to read you will only sell the cheap ones....I will now sleep easier at night.
David Shalom would not like you to post his responses word for word. If you put your own interpretation on his response then that's OK.
Hopefully dividends should be maintained at current levels especially as the reduced CD demand was viewed by Coral as a temporary blip.
CRU would not be my one share to hold, I like a bit more risk and it would be shares like WTE, TRK or MDY. Holding CRU helps balance my portfolio, amazingly I also hold HFX (completely out of character).

[monty burns] 07/5/2001 20:55

Don't panic - I'll only sell the 37p ones.....

Very good response from David Shalom - wondered if I should post it (didn't ask permission), decided that there was nothing confidential in it and that there shouldn't be a problem. They need the publicity........

I am a lot more relaxed about these now after seeing the potential (was realised!) increase. Still think that the dividends will continue, resulting in a very healthy yield, so even if the price does not recover near term I'm happy to hold it for the yield and look elswehere for the growth. I do still think they will grow very well from here, just don't know when. Either way, as the poster earlier on the thread said, if I had to name only one share to hold it would be CRU.

[chelsea blue] 07/5/2001 14:02

Monty
An excellent post and thanks for sharing the information with us. David Shalom is very responsive to questions from shareholders - always a good sign. He also reads the bb's regularly, now there's a warning.

A few months ago I provided much information on various bb's in answer to several questions. Some of the very detailed questions I could not answer and so I made contact with David Shalom and he was totally helpful and responsive.

I am now very worried, on the 15th May I am off on holiday for two weeks, on or about the 22nd May the shares will probably hit 60p, you will sell and by the time I return they will be trading at mid forties again as if nothing had happened.