Interserve Share Discussion Threads

[aendjo] 10/10/2018 20:16

@Jeffian, I’m not saying it’s simple.

This is not up to date but it gives you an idea of the type of process I use.

Float for current evaluation is circa 175m shares (taking into account the 20% forward dilution).

An increase in GBPUSD from 1.3 to 1.4 decreases US denominated debt by circa 10m.

hxxps://walbrockresearch.com/is-interserve-a-better-prospect-of-investment-than-carillion/


hxxps://walbrockresearch.com/interserve-segment-analysis/

[windrushg] 10/10/2018 19:40

Struggling with a 'foreign' keyboard Jeffian and 'foreign' low skilled workers from Eastern Europe. At this rate,people are going to think you are xenophobic!!! LOL

[jeffian] 10/10/2018 18:36

"First try to estimate what the company is worth (Google how to do it). Divide by float. Congratulations, you have determined fair value."

Sorry, I just don't get this, aendjo. 'Sum of the parts' valuation? What parts are you assuming will be there post 2021? "Divide by the float"? What, now or post 2021? If only it were so simple!

[jeffian] 10/10/2018 18:36

Excuse double post. Struggling with a 'foreign' keyboard!

[da vinci1] 10/10/2018 17:37

Nice rise at the close! So much for the Altman Zzzzzzzz! Sounds like a load of codswallop to me!!

[bertiebru] 10/10/2018 17:05

aendjo, 10056

Just a slight correction of facts. Interserve were not actually concerned in the M6, Spaghetti Junction contract. They had the connecting Aston Expressway contract to the centre of Birmingham. I am proud of the fact that a member of my family was in charge of the Expressway contract and that it was completed 14 months ahead of contract date so that it could coincide with the opening of the M6, Spaghetti Junction.

Most of the work on the Expressway was done by the old R.M.Douglas Construction team rather than the Tilbury side of the company. A lot of that great construction expertise seems to have been lost in recent years.

On the Thames tunnel news -- again vast expenditure in the South rather than the North and Midlands. It is not right unless there is big, big expenditure coming for these areas as well.

[aendjo] 10/10/2018 16:51

Thank you Bertie for the clarification, much appreciated.

I have been doing some research on current IRV involvement with highways construction - they are on a number of frameworks, Highways England scored them as their 5th (out of 22) major supplier in 2016 and they have a number of active contracts, although as cc mentioned earlier nothing close to the scale of the Thames tunnel. I would be surprised if they didn’t get a slice of that pie, given the size of the job.

[bertiebru] 10/10/2018 16:42

aendjo, 10056.

Interserve did not actually handle the M6, Spaghetti Junction contract. They built the the Aston Expressway from Spaghetti Junction to the centre of Birmingham. I am very proud of the fact that a member of my family was in charge of the Expressway contract and that it was completed 14 months ahead of contract date. It was completed in time to coincide with the M6 Spaghetti Junction opening.

A lot of the work was handled by the old R.M.Douglas Construction team rather than the Tilbury side of the company. A good deal of that old construction expertise seems to have been lost in recent years

[aendjo] 10/10/2018 16:42

Fenners, you are of course entitled to have your own opinion on whether fundamental, quantitative or technical analysis is best suited to determine long term trends. As I previously mentioned, there’s plenty of scientific literature available on the topic and people can make up their own mind. I have no interest in convincing you.

At the same time, I put more weight in the announcement of an extraordinary cabinet meeting tomorrow at 5PM for an update on the latest “breakthrough” in Brexit negotiations (agreement achievable by next Wednesday, says Barnier) than on the red candle at close today. (In fact I’m probably topping up tomorrow, if I can find some cash).

With utmost respect and sincere best wishes for successful trades to you and all posters here.

[cc2014] 10/10/2018 16:40

Bizarre trades into the close.

With 30 seconds to go it looked like 50 wouldn't hold and then someone buys a load in the closing auction at a price they didn't need to pay.

Either there's some good news coming overnight or someone wanted it up so they can spend all day tomorrow selling

[mrfixituk] 10/10/2018 16:12

Capita and Arrow Global two other junk shares like Interserve still going down. Altman Z below 1.1 and free cash flow to debt below 0.05. Not a buying market at the moment anyway. FTSE trending down

[aendjo] 10/10/2018 13:38

@Fenners. I’m not sure what you’re (suspension) point is but the evaluation is based on historical performance, consolidated (forward) revenue, and margin targets (set out by management and analysts - I have previously posted links to a couple of comprehensive document on construction and support services edited by EY).

I don’t know anyone in IRV Board of Directors. I do know some analysts and institutional investors. I do discuss the topic and I’m grateful for their insight, when they share it. You may be surprised to hear that for big portfolio managers the main issue with IRV is not its risk, but its small market cap. They need to allocate big money and they would scoop up most of the float with a few trades (they don’t want to “own” the business) and the small trading volumes involved.

If you think that technical analysis allows you to predict long term trends, I’m happy to disagree with you. There’s plenty of literature on the subject out there. I don’t particularly care to make the point. Good luck with your investment.

[fenners66] 10/10/2018 12:29

aendjo - "First try to estimate what the company is worth (Google how to do it). Divide by float. Congratulations, you have determined fair value."


Based on the historical published information - or based on your guess for the future?
At that point it would certainly help if you were the CFO for the company in question.

Otherwise you perhaps could talk to their team....
Or perhaps you could talk to someone who talked to their team....

How familiar are you with the senior finance team at IRV ?
Have they been to see you, invited you over for a coffee and a presentation or two ?

No ?

But don't worry there are others out there who are that familiar .... and they also have people working for them that can run the valuation models ... so get friendly with them....

Don't know them ?

Don't worry they can do the maths and then they have the firepower to buy/sell enough shares to make a difference..so all you have to do is do what they do .....

In fact all that work they do shows up in the share price and the charts , so just weed out the buys and sells from those who have no idea and you are there....

Actually that often shows up in moving averages etc.....

Hey , that's it maybe you could just learn a bit of charting..... oh no of course you think its useless ....nevermind.....

[cc2014] 10/10/2018 10:49

IRV will pick up some spending for sure but £6.8b road tunnel???

Any project of that size even when broken up into packages will require a joint venture partner (government direction of travel now post Carillion in order to avoid losses due to receivership falling on government)

No-one is going to touch IRV as JV partner as they have no cash.


Anyways this sort of large civils project is not IRV's area of expertise.

[obiwoncanary] 10/10/2018 10:38

I think this is the start of a major injection of funds for public infrastructure and as you say IRV will be picking up some of these. Testing times but I’m holding long and strong knowing IRV bod will turn this around

[aendjo] 10/10/2018 09:49

Fresh plans for a multi-billion pound road tunnel beneath the Thames that will ease traffic build-up have been revealed. The new road plan – estimated to cost between £5.3 billion and £6.8 billion – involves making the entire route of the Lower Thames Crossing a three-lane dual carriageway rather than two lanes in some sections.

A 6+ billion job - biggest highway project since M25 - construction scheduled to begin 2021. Hopefully our friends at IRV will be able to help, as they have done in the past with various sections of the M1, M4, M40, M42, M50, M54 and M6 Spaghetti Junction.

[windrushg] 10/10/2018 00:14

Hmm!! "Make sure the price is above the 200 day moving average at least(it is flat or rising)": By that point the share price could be anything from perhaps 140-250 pence! You would probably have missed out on most of the best part of the gains.By that point the rising momentum could have been exhausted and another downtrend could be imminent! Peel Hunt rate the share as a Strong Buy-Target Price of 140 pence. This is in the early stages of turnaround and recovery IMV.No wonder Shorters are beginning to close their positions.

[mrfixituk] 09/10/2018 22:15

Stockopedia said this not me. Don't screw yourself with this company until the financials change and the chart changes. The chart usually shows it first.Make sure the price is above the 200 day moving average at least (it is flat or rising) Otherwise gambling your money away.

[aendjo] 09/10/2018 19:40

Straight from investopaedia:

it becomes a value trap to the investor if no material improvements are made in the company's competitive stance, its ability to innovate, its ability to contain costs, and management by the executives.

[oliversanvil] 09/10/2018 18:20

SP faffing about!

[mrfixituk] 09/10/2018 17:57

Highly speculative value trap!

[cfc1] 09/10/2018 17:55

fenners66 - I agree re "months later" one tiny disposal but I think these things tak time and clearly it is a negotiation. IRV will not sell business units unless at a fair price. I am still holding and waiting for news - deals and disposals of substance. When that happens I think we see a sharp reversal of the share price Without news then predators play - as they have done for a year! BUT the HFs dont want to be caught and they have had a fantastic run. Like all good HFs even they can and will reverse.