Hargreaves Services Share Discussion Threads

[bakunin] 27/5/2015 11:35

I thought that was what they are assuming (that coal prices won't recover).
If there's nothing in the Trading Update about what they are looking at doing, then pessimism could very well be the correct attitude.

[meijiman] 27/5/2015 11:17

No one doubts their quality. Nor is there any liklihood of things spinning out of control. I think the issue is to do with the direction of the company.If the present share price is 400p what might make it rise to 500p or 600p? Also many of their acquisitions could now be bought much cheaper so it might be argued that it has not been a great use of shareholder funds to get further involved in coal/coke. Obviously we are all wise with hindsight.
So as you say we need some view of the roadmap going forward eg house building/renewables/share buybacks etc.
Of course coal prices might recover but I think there has to be some view taken that they won't.

[bakunin] 27/5/2015 10:54

Gordon Banham, Tim Ross, David Morgan.
None of these guys are the type that would want to be associated with a disaster tailspinning out of control.

[bakunin] 27/5/2015 10:52

David Morgan is soon to take over as chairman.
He has 20 years' experience at JMAT.
Perhaps an indication of the kind of company that Hargreaves will try and turn itself into?

[bakunin] 27/5/2015 10:35

hxxp://www.thejournal.co.uk/business/business-news/durham-based-hargreaves-confident-despite-revenue-8660337



For those who are sceptical of financial reports!
Meaningful cash generation despite the difficulties, irons in the fire, restructuring to reduce debt in the current circumstances, an MD whose life has revolved around building this company.
Perhaps not in the S-T, but a turnaround is worth betting on.

[bakunin] 27/5/2015 10:20

As an aside, I wish these poor conditions for coke/coal would allow me to stock up with some cheap anthracite for my multi-fuel wood burner. But, those prices don't seem to have fallen.

[bakunin] 27/5/2015 10:13

bamboo2
H&S works on a S-T time-frame or with highly-liquid stocks where you don't get sudden price spikes.
You wouldn't get a L-T H&S full of spikes like that of HSP with a highly-liquid stock.
Just look at the drop from the top to the commencement of the right shoulder!
The longer the time-frame and the spikier the chart, the more essential it is to use a log chart.
Perhaps you might post the same graph with a log scale?

[bamboo2] 27/5/2015 09:48

Hi Bakunin, for the record I currently have no position.

I have traded HSP in the past and this is documented previously on the thread.

I place quite high values on some types of chart pattern, and the H&S Top is fairly reliable. The good news is that this is starting to get quite close to the target price, and could soon start finding support.

[meijiman] 27/5/2015 09:38

No Bakunin I'm long. Just frustrated with the drift south. Admit that the post was rather pointless though. A bit like kicking the dog. When is the next news?
So wish I'd exited here at 800p level as it may be a long time before we see that price again.
Is the share buy back programme still live? This didn't seem to be properly thought through.
Longer term concerns must be that there is now no longer any support for carbon at the Govt level which may prove to be short sighted. Hence closure of the coal fired plant in Yorkshire.The company is operating in declining markets so needs a radical rethink on how to crystalise value for shareholders.

[beeks of arabia] 27/5/2015 09:28

They have actively been cutting costs over the last few months.

I know from personal experience.

Will be an interesting update!

[meijiman] 26/5/2015 16:24

Seems to be heading that way -no evidence that management has much of a clue how to halt this decline.

[bamboo2] 22/5/2015 20:45

For some time the chart has indicated a Head and Shoulders pattern with a target of approx 285.

[meijiman] 22/5/2015 15:35

Thanks for your thoughts. Be good to get an update -might see a longer term road map of a way forward. Probably involving the service businesses, plus developing the landbank, and maybe renewables. Cash generation suggests the dividend is safe -at least I hope so.

[bakunin] 22/5/2015 14:55

DRX has gone renewable and got shafted by the government.

[bakunin] 22/5/2015 14:52

Well, I've been monitoring HSP and am very tempted at this level.
All it takes is a geo-political event causing disruption in coal supplies somewhere.
I think that there must be an industry rationalisation in course, as has happened throughout time. The strongest will survive. Otherwise, all the coal producers must be planning to close down and nothing will be left. I like the fact that HSP see themselves as a potential survivor.
I like HSP's frank reporting and am inclined to believe that they will be one of the survivors. They talk about their core competencies being applicable in Industrial Services and expanding into that area while coal production is in crisis. That seems like a competent management/flexible organisation.
As for expanding their coal ops just before the crisis struck, I would have thought one could lump all energy-related companies into the same basket. Did all those now never-to-be-profitable shale gas companies in the US think the price of crude would crash? At a more rational level, it did appear that the government was likely to do an about-face on renewable energy given the dire economic outlook and that new technologies for making coal-burning green were available.
Trading update due also, so we will find out soon how it is faring

[meijiman] 22/5/2015 14:12

Fair comments Bakunin. Just not sure coal is coming back -on that basis anything they can do to reduce exposure has to be good. But the aggressive expansion into all things coal rather suggests they did not forsee this low price scenario coming. Put another way with the benefit of hindsight I don't think they would have bought a coke works and a coal mine.
I would like some idea of how they intend to develop the land bank.
On a different tack what should the management be doing to raise the share price? How might a new shareholder be enticed into buying HSP?
Would hope the yield holds the share price at current levels whilst we wait 'on events'.

[bakunin] 22/5/2015 13:30

So, you like FENR diversifying away from the coal crisis into plastics.
But, no credit to HSP building up its Industrial Services and Transport divisions for the same reason.
Is it not a strategy to forecast that the coal crisis will eventually subside, leaving them as the only UK coal producer, and plan to manage the company to be at least cash-generative until that time arrives (cutting down coal production where margins are low etc)?
The land bank does not count for anything?

[meijiman] 21/5/2015 15:19

This company is in desperate staights with seemingly no idea how to get out of the mess. Look at Haworth today -another basket case but seemingly with a plan. Is the Yorkshire coal power plant closure an issue -no idea-but there seems little plan here as to the way forward. Decent divi and that's it. Bit like sitting in the deck chair on the beach as the tsunami heads your way.
Still I may be wrong and there is a cunning plan.........
Management also hardworking and not venal................

[tanelorn] 21/5/2015 14:52

The problem with some 'brown field' sites, is the considerable expense in decontaminating the land, resulting in higher house prices, combined with frequently less desirable locations. No wonder mainstream builders prefer virgin fields.

[rohkap] 05/5/2015 20:59

IMHO the way forward would appear to be developing brownfield sites for housing. Think the CEO has a sideline in residential property so should know a thing or too about this area

[meijiman] 05/5/2015 09:21

Wish they would do something. The share buy back seems to have dried up -maybe the view on its utility has changed.
There is no point in moping because the carbon world has collapsed into a pile of dust. Surely there must be useful initiatives regarding selling brownfield land, developing renewable energy assets and the like.
Certainly the shares are very cheap but they may stay that way.

[gingerplant] 17/4/2015 15:35

Well I've bought some of these today at 441p. It's a difficult one to quantify accurately but looks cheap on most measures to me.