K3 Capital Share Discussion Threads

[pireric] 05/4/2019 08:26

Best of luck Tom

Finncap note suggests they think the department is overdone. Unchanged FY20 forecasts for 13.9p eps so single digit p/e and £6m net cash. They say scope for positive reblanacing of fy20 EBITDA on top of that if the slipped deals complete in fy20

[eezymunny] 05/4/2019 08:26

Nobody knows when a recession will come, but a recession WILL come. And cyclical companies perform diabolically in a recession. That's why cyclical companies should have low PE ratios after the longest period without recession in our lifetimes... I'd imagine this will trade at c. 60p next recession. That could be soon...

[tomg23] 05/4/2019 08:24

I'm not a hold and hope kind of guy so was out on the bell. About a 60% loss altogether on that trade. Took my medicine and moved on. All the best to everyone staying in, still think it's a quality company but going through a bumpy patch

[pireric] 05/4/2019 08:20

And if the world implodes then Tesco might go bankrupt.

Who knows if there will be a recession this year

[eezymunny] 05/4/2019 08:17

If M and A dries up (pretty normal in a recession) OF COURSE they can lose money. Durrr...

[pireric] 05/4/2019 08:14

It's not getting to 25x anytime soon that's for sure. I could justify a PE of 15 on the back of the very high cash conversion whereas a PE of 15 for most other companies is much less valuable from a cash perspective

They don't start losing money as they're not a panmure Gordon or Numismatic but profitability is reduced, clearly, as we've seen. This was the roster quarter.for m&a stretching back over 7-8 years though

[eezymunny] 05/4/2019 08:10

That's my point pireric. Likely to have good periods and bad periods. Therefore really SHOULD be on a pretty low valuation. If M and A dries up they start losing money very quickly... All this should be on a 25 P/E is just dreamland fantasy PI rampy nonsense...

[pireric] 05/4/2019 08:08

Q1 m&a was shocking industry wide Eezy so you could argue thst this is the trough of that cycle barring a real (which impacts most stocks). Quite a few people out there that I guess we're waiting for a profit warning to establish an entry and couldn't justify buying in before one

[molatovkid] 05/4/2019 08:07

All blue buying....

[molatovkid] 05/4/2019 08:05

going up already....just means it could be a bumper 2020 for long term holders

[pireric] 05/4/2019 08:04

It's close Simba! Unfortunately

I do truly believe they've been hit by transitory impacts, so if they hold 13p of EPS for fy20 and the market stays at a depressed 10x multiple, which is 8.7x ex cash, then that's a 130p level

[simba_] 05/4/2019 08:03

Sold at 120p. 30% loss in one day must be a record, right?.

[molatovkid] 05/4/2019 08:02

a few are going to get robbed of their stock today

[tsmith2] 05/4/2019 07:59

Thinks are getting very tough out there corporate transactions wise. K3C are not a first class operator

[simba_] 05/4/2019 07:57

As I suspected, the price action was not to be ignored. Horrible timing from myself to buy the day before a PW but I was cautious enough to only pick up a few. Still a loss is a loss and its never great. I'll be out here as quick as i can. Lesson learned (again). Best of luck to those holding.

[pireric] 05/4/2019 07:52

Tom

Comes down to if the market is feeling bearish or trusts that Brexit really is having an impact

If it believes that the profitability will return to 12-13p in fy20, then given the £6m cash in hand, that should support around 110 - 125p as a floor at a guess. Suspect were back to a 7p ish number for this yr

[opodio] 05/4/2019 07:50

opodio3 Apr '19 - 00:35 - 241 of 283 Edit

chart spells profit warning and 40p



pireric3 Apr '19 - 07:26 - 242 of 283

If you think that's the case you should short it ;0)

I won't take the bait post!






I bet you wish you had. Mwahahahahahhha

[molatovkid] 05/4/2019 07:50

I think people need to be careful not to over-react....the outlook is good and these high value transactions are still in negotiation with every chance of being realised.

Far from desperation stuff....if anything a good entry point is emerging

[saj3] 05/4/2019 07:48

I thought they where going to update in June

[tomg23] 05/4/2019 07:47

There we have it. You could smell that all was not right here. But I kept holding like a fool. Painful lesson but one that I will learn from. Best of luck all on whatever you decide to do. Hold on or get out. Does anyone know what dairy value is for these now? Has market already priced most of this in?

[yasrub] 05/4/2019 07:47

More of a concern they had not updated the market earlier - 'frustrated that this seemingly leaked into the market' is being generous. Management will need to repair the confidence in them quickly.

[pireric] 05/4/2019 07:45

It's a weird balance of a much weaker this year, but then next year they're holding expectations, which would imply more like 13.5p EPS again.

Market unlikely to give credit on the latter number but at the same time, could end up looking like a single digit fy20 p/e with still £6m cash in hand

[5chipper] 05/4/2019 07:42

Interesting to see where this opens

[pireric] 05/4/2019 07:36

Frustrating that this seemingly leaked into the market

Eezy - no sensible management team would bump up fy20 on the back of the slippage. Just run a greater risk of overpromise underdeliver.