Hercules Props. Share Discussion Threads

[rivaldo] 26/4/2004 17:07

Surprising markdown today for the volumes involved. Lots of small sell trades on a Monday usually means one thing - a tipsheet has stuck its oar in!

I'm not aware of anything out there, but on top of all the fundamental plus points, punters can now buy in at a cheaper price than the institutions paid in the recent placing! Crazy.

[rivaldo] 20/4/2004 20:50

Sssshhhh....

HPS remains on a P/E to 30/6/04 of just 8.25 based on 34.82p EPS as forecast, falling to 7.6 next year. And there's a divi of 8p or 9p as well. The solidity of the share price bodes well for another run pre-results IMO - in particular, I keep reading that the commercial property market is well and truly up and running.

[greatbear] 15/4/2004 17:55

Quiet, but we are listening.

GB

[rivaldo] 15/4/2004 14:17

Another nice buy - 11,845 shares at 288p. A quiet thread, and I think buyers are out there accummulating just as quietly.

[rivaldo] 08/4/2004 16:17

Yet again all the sells are soaked up - then a decent 5k buy and the bid gets marked up.

There's someone out there....

[rivaldo] 04/4/2004 13:58

Penpont, funny you should say that....I'm waiting to see if I can free up some cash elsewhere and am glad to see the price is stable. Shame that it's on AIM though - strikes me as a good ISA stock.

Still can't see much out there that's better value than HPS based on forecasts and prospects - that forward P/E of just over 7, plus a decent divi, is looking diffcult to beat anywhere else in the market at present.

PS : on a slightly riskier tack, have a look at the PDT thread - seems like good news is about to break on its investee company, Alphamosaic.

[penpont] 04/4/2004 11:05

Thanks rivaldo, will try to keep up to speed with this stuff from here on as it looks like it could benefit HPS. OT: have you looked at ERG, a recent Aim newcomer with some similarities to HPS?

[rivaldo] 04/4/2004 10:21

Penpont, REIT's have been very, very successful in the USA as tax-efficient investment vehicles for investing in property - here's your idiot's guide (more than 3 sentences though)!



"WHAT IS A REIT?
Simply stated, a REIT is a company dedicated to owning and, in most cases, operating income-producing real estate, such as apartments, shopping centers, offices and warehouses. Some REITs also are engaged in financing real estate. Most importantly, to be a REIT a company is legally required to pay virtually all of its taxable income (90 percent) to its shareholders every year.

In short, a REIT may deduct the dividends paid to the shareholders from its corporate tax bill so long as -
the company's assets are primarily composed of real estate held for the long term,
the company's income is mainly derived from real estate, and
the company pays out at least 90 percent of its taxable income to shareholders.

The main benefit of being a REIT: one level of taxation.
The main limitation of being a REIT: a restriction on earnings retained by the company."

IMO property investing will become even more popular (particularly commercial property) and any increased activity will thereby benefit HPS (and of course others in the property game).

[penpont] 03/4/2004 20:05

Looks like the AFX news item was one of their periodic errors - a deal of that size would have almost certainly been reported under RNS and would probably have had some effect on the share price.

rivaldo - excuse my ignorance but the REITs developments have kind of passed me by I'm afraid to say. What are the likely implications for HPS, if you wouldn't mind offering an idiots guide of not more than 3 sentences? :-)

[welsheagle] 03/4/2004 19:36

The property deal news was under the epic HPS so assumed it was connected with Hercules.

[rivaldo] 02/4/2004 09:12

I think Welsh got a little prematurely excited - can't see any connection myself?

Anyway, now I'm here - it's been comforting to see the HPS share price so stable, especially in view of smaller companies' drift over the last few weeks/profit-taking before 5th April. All selling has been soaked up - I suspect there's still buyers out there, and on a forward P/E of just over 7 there's plenty of mileage left in HPS for this year.

The residential housing market (amazingly) still seems to be thriving, and there's still all the activity to come from the start of REITs and the admission of property into SIPPs.

Greatbear's 475p target would be a forward P/E of only around 12, yet would be a 67% price improvement over today's price and could happen within the next
6-9 months.

[penpont] 02/4/2004 08:22

Sorry, but has the Hercules Unit Trust got anything to do with HPS?

[welsheagle] 02/4/2004 08:01

LONDON (AFX) - Capital & Regional PLC said its partnership with Pillar
Property PLC has exchanged contracts to sell the leasehold interest in its
Glasgow Fort Shopping Park to the Hercules Unit Trust for 194.7 mln stg.
The sale of the 35,110 square metre shopping park is subject to approval by
the Hercules unitholders and Glasgow City Council.
Pillar is property adviser to, and owns a 35 pct stake in Hercules.
The park, located at Junction 10 of the M8 Motorway is currentlyunder
construction and completion of Phase One is due at the end of Oct 2004.
Total development costs are in the region of 142 mln stg, Capital & Regional
added.

[greatbear] 28/3/2004 23:53

I believe so also DJ.
This year EPS 34.82p (+7%) 2005 37.92p (+9%) 2006 41.57p (+10%)
But as Rivaldo points out the profits have improved as he detailed.

My target has now dropped to 475p but is still nearly 70% gain on current price of 285p. Still heavily under priced considering their low P/E (Rolling P/E of 7.6)and the dividend.

GB.

[diogenesj] 28/3/2004 15:10

Welsh: I think those forecasts are now out of date.

[rivaldo] 27/3/2004 17:50

DJ, absolutely right - I'm obviously not too sharp in the mornings!

Furthermore, Investec have actually increased their PTP forecasts - from £9.2m to £9.25m for 30/6/04 and from £10.2m to £10.4m for 30/6/05, so the forecasts are better than I first thought...

Simon, not sure about a demerger - sometimes (in my experience) the two parts separately don't turn out to be worth as much as the whole? But I suspect you're right about corporate activity, since the institutions paying up recently at 275p won't want the company to stand still for long.

[diogenesj] 27/3/2004 15:13

rivaldo: I suspect the new forecasts just reflect the dilution due to the 900k new shares just issued.

[simonevans] 27/3/2004 09:53

Rivaldo - thanks, interesting. I agree that these look good to hold. The Lipmans have been fairly inactive on deals recently - SAF, HPS, BIZ and TEC-IS have all been quiet - suspect there are things going on behind the scenes though! I would still like to see Hercules broken up through a demerger of the insurance related activities.

[rivaldo] 27/3/2004 08:39

Investec have brought out new forecasts (dated 23rd March).

They've trimmed the EPS forecasts slightly, but increased the divi forecasts:

Y/E 30 June 04 - EPS 34.82p, divi 8.55p
Y/E 30 June 05 - EPS 37.92p, divi 9.15p

At 285p that puts HPS on a P/E of 8.2 for the year about to end, and 7.5 for the forthcoming year. The 3% divi yield is nice as well...

Is there anything out there much cheaper than that and with such a clear chance of a 50% near-term gain, especially with institutions having so recently subscribed to shares at just under the current price? Well (apart from VCP, MBY and CKN!) I don't think so.

[rivaldo] 19/3/2004 16:16

Interesting trades - over 100,000 shares bought in 3 large chunks at the ask, and any sells being soaked up.

[the speculator] 17/3/2004 08:08

looking good here...also off topic, take a look at PTY results today.
In a better market they would be flying.

[rivaldo] 16/3/2004 11:47

HPS again up in a general morass of markdowns - such strength is worth noting.

[rivaldo] 15/3/2004 15:12

Nice buy of 5,000 shares at the ask (287p) - looking very solid at present, maybe ready for a push to £3?

[rivaldo] 15/3/2004 12:47

Thx anyway penpont. Less than 3 months of the current year left, so Everyinvestor and SCSW should have got a pretty good impression of how things are going for this current year if they did speak to the company.

I would certainly call a forward P/E of just over 7 undemanding!