Kier Share Discussion Threads

[minerve 2] 29/5/2019 12:10

Porsche

I never average down. I only buy if I see value. What I paid previously is irrelevant. Is the share good value today or isn't it. Do you want to increase your risk or don't you. Averaging down is for chimps, that is not the same thing as finding out what your average buy-in price is: one is a poor objective, the other is review.

[porsche1945] 29/5/2019 12:06

...are you still averaging down minerve??

[ltcm1] 29/5/2019 11:21

It doesn't really inspire that the CEO here was also picked to head up Carillion! This Andrew Davies looks too average to me, only four years building experience too. Perhaps Carillion lined him up because they knew he was a 'soft touch', a continuity candidate to keep operation Gravy Train on the tracks for a few more years. Perhaps I am just seeing what I want to see though???

The other issue here is that on a demand and supply basis, there are now a lot more shares in circulation and investors showed their hand by not picking them up at the deeply discounted 400p. Also Woodford's 20% is a major roadblock as per other institutions, we have already seen Woodford wreck PFG and Stobart with his aggressive, loose cannon, maverick moves.

Even if there is screaming value here, if others don't see it the shares could be low for a long time yet.

[brexitplus] 29/5/2019 10:32

ltcm1

The problem here is that no-one knows what is true and what is not. A profits warning followed by an error in debt accounting doesn't give confidence. Plus a very small net profit on huge earnings, as you say, is problematic. And of course accounts are always backward looking, at least three months out of date, and open to financial engineering. With the FD, who many consider less than competent, departing in the near future it is impossible what know will come out next.

The business review will be interesting, but like very many turnaround situations this may fail. Also, with such a low market cap there is the possibility of a bid for part or the whole of the business. Kier Homes might be a valuable asset but would leave the rest which isn't as profitable, or in fact profitable at all.

Quite a quandary both for the CEO and investors.

[minerve 2] 29/5/2019 10:16

I don't pay much attention to share trends. It either has value or it doesn't. Trying to predict where the share price goes is a fool's game. You could watch it drift sideways for a year and assume the share price is stable and then it will fall. I think this is the whole problem with the market. We have too many chartists and tea readers, not enough investors who can read a set of accounts.

[ltcm1] 29/5/2019 10:10

Minerve you did a good job arguing the bull case last night.

I wouldn't argue with anything you say about Kier getting work, however the question is as ever are they going to make profits from it???

On the plus side surely Kier Homes would be an attractive business for someone and could be quite valuable. Do they have much of a land bank? Do they manufacture the houses themselves or is the manufacture outsourced?

On the negative side the five year downtrend indicates something is wrong at Kier in a very fundamental way, I'd like to see some stability on the share price and an upturn on rising volume before buying myself.

It is going to be a very interesting story here either way - GLA!

[brexitplus] 29/5/2019 10:05

Value trap. Wait for the next financials. Another dividend cut on the way.

[russ1983] 29/5/2019 10:03

the P/E ratio is below 2.5....

[brexitplus] 29/5/2019 09:04

Time to average down!!!

[blueball] 29/5/2019 08:59

Stay short.

[eriktherock] 29/5/2019 08:56

Also, the fact that the market capitalization has reduced by 50% since the announcement of the new CEO appointment maybe indicates market sentiment towards the stock.

[eriktherock] 29/5/2019 08:54

Yes, year-end net debt against the ever reducing valuation is a biggy. Two monthly red candles below the the October 2008 Low is another indicator.

[gairich] 29/5/2019 08:52

Don't forget dunderheed's getting

[gettingrichslow] 29/5/2019 08:42

Down again. This has now halved in the last 2.5 months! Exactly as predicted by Zicopele, Brexitplus, Porsche and others. Strictly for lemmings and fanboys only...

[minerve 2] 28/5/2019 23:43

Be careful, you might upset the Brexiters with those type of comments. :)

I saw on FT markets live that analysts had an Article 50 revoke, in some form or another, at 60%.

[ltcm1] 28/5/2019 23:39

The one thing certain about Brexit is we won't be leaving WTO stylee on Haloween!

I don't have a viewpoint either way but no PM is going to risk losing a no confidence vote and a general election in order to secure a no deal.

There is a brilliant interview with Tony Blair by Adam Boulton on Sky news and he spells out exactly what the situation is. It is a straight choice between no deal and remain now, but in order to confirm it we will have to have a referendum on the choice.

Interestingly Nigel Farage has dismissed any chance of renegociation on his LBC show today, which Tony Blair said aswell, so it does seem to be coming down to a clear choice.

So the chances of remain are still quite high, I'm going 60% chance leave and 40% chance remain now. I think the no confidence issue changes a lot of things.

[minerve 2] 28/5/2019 23:39

Thanks for your reply ltcm1

You've obviously noticed I've unfiltered you. ;)

I'm not particularly impressed by Woodford since 2014 but he still is worth watching IMO. His exits on some have been well-timed although it is difficult to say whether his fund - being so large - has driven self-fulfilling action.

I'm attracted to Kier because their business fits well within the rest of my portfolio. It is obviously stressed which makes it cheap - which is also an attraction - and is really a turnaround type situation which I think they have a good chance of doing. Brexit is making some stocks very cheap and the cheap pound is attracting inward investment into some areas which will benefit Kier. To some extent this is a play on Kier working capital trend....

Civil servants are generally very much centre right when it comes to political bias so I think they will not want to see any further problems in this space whilst the political turmoil continues. They don't want to handover the keys to Corbyn so I think the chances of another Carillion or Interserve are very remote. Utilities are upping their game to meet new regs coming in. RS2 (vs RS1) budgets for highways will be significantly higher where Kier is the number one contractor. HS2 is an obvious subject of discussion but in the context of Kier it is just another project in a plethora of opportunity. If HS2 gets cancelled other projects will happen with the budget I have no doubt. You can't just cancel a project so easily without sweeteners and these will be in more localised development and in large Northern projects IMO.

I expect this share price to turnaround soon, I believe a trading update is not far off (June/July) and it may then be an opportunity to start building my second tranche. I'm not worried about the share price Entry has to be planned over 18 months in situations like this. You should be comfortable with shifts up to and over 50%. If you are not, this isn't your game.

When everyone is scared you get the opportunity to buy and outperform. Sometimes you are right, sometimes you are wrong. This is definitely NOT a Buffet-esque investment but it could be a nice steady yielder if they turn this around. At my buy-in the yield will be very high if it works out right.

Good luck! ;)

[gettingrichslow] 28/5/2019 21:54

mad foetus, I do use him as a contrarian indicator, but I'm afraid he just provides me with so many laughs I can't bring myself to filter him. And the best is yet to come when we leave the EU on WTO in October, he'll be apoplectic!

[ltcm1] 28/5/2019 21:45

Minerve it wasn't directly to you but I am glad you have been very wise and only invested the 2%, obviously your Kier investment has to also be viewed in the context of your portfolio.

I do accept it could be a good time to buy now that many are fearful here and also the weak holders are getting flushed out it would seem.

Minerve my argument is not with you, it is with Woodford. I get you like to fire three or more bullets at an investment but when Woodford does same he ends up almost owning the bloody thing! I can see what you are doing is an advantage for the small investor but at the level he is trading at it becomes a negative.

It is hard to understand what he sees here because if it didn't exist you would never invent a business model like Kier's. I like the Corbyn Construction moniker because at it's core Kier feels like capitalism in reverse. I mean their main building achievemnet to date has been the creation of an enormous managerial empire. They have built something so big they need to do £4BN a year of turnover just to break even!

It is crazy, insane and wrong and I can't fathom why anyone with Economics training would be attracted to this behmouth.

[mad foetus] 28/5/2019 21:23

I know it may seem fun to laugh at Walter Mitty but it is better just to filter him, unless you want to use him as a contrarian indicator, as he really is first class at going balls deep without a clue.

[brexitplus] 28/5/2019 21:19

Getting

You have poor old Porky by the balls. As you say it’s always the same - he changes or avoid the subject. We’ve caught him out so many times.

230p I think.

[minerve 2] 28/5/2019 21:11

Getting

You can stop trolling here. I filtered you a few days' back.

I will not be changing my mind this time. I have given you enough chances but you simply haven't got anything that you could offer me that is worth listening to. Sorry about that but there is no point in pretending your opinion has any value when you are not in ownership of the right knowledge or the full facts.

Same thing goes for brexitplus. Filtered.

I would suggest you get back to pretending you are important in airports and brexit gets back to cooking a roast on the weekend. Cheers!

[minerve 2] 28/5/2019 20:44

ltcm1

I don't know who you are attempting to address but if it is me I can assure you that I have read the accounts and can see where problems and off-balance sheet debt is. Thank you for your concern but I fully understand the risk. As I have mentioned on another thread, if this goes belly up it is no big loss to me. It occupies less than 2% of my portfolio.

Joint venture commitments are fully funded.

The share price could go anywhere, it doesn't need to rise at all. Sink cost fallacy is for idiots.

The question is: does this have value, or doesn't it?

If you think it is a value trap, move on. Stop trolling and save yourself some time.

[brexitplus] 28/5/2019 19:52

Any answer to my question re the next support level? My best guess is 230p.