Lancashire Share Discussion Threads

[salpara111] 24/2/2015 13:47

I guess that spikes like this could well be the result of shorts unwinding.
Personally I have always felt that this was one of the biggest bargains on the FTSE with its huge cash generation and ability to increase profits last year when their market place was supposed to be the worst for many years.
Happy to continue holding for the foreseeable future.

[sportbilly1976] 24/2/2015 12:14

Salpara,

i'd say the recent acquisition of BRIT has brought the sector into focus...Odey must be trimming their short position in the background too

Short of 9mln+ with an average daily volume over the past 3 months of 550k cannot be done without affecting the share price considerably

[salpara111] 24/2/2015 12:07

Stake building prior to a bid?
I had targeted 700p for mid year but might have to reappraise my view, clearly there will be a fall off when it goes ex on the divi so I am factoring that into my mid year target.
Like a lot of full time investors on this board, I am rather nervous about a lot of macro issues what with the FTSE sitting near all time highs and the interest rate cycle possibly about to turn (having said that, I have been waiting for the interest rate cycle to turn for about 3 years now!)
My view is that picking good businesses will allow market out performance especially if you can pick a few smaller companies (market cap £100-300m) which are showing strong cash flow performance.
I learnt the hard way by ignoring cash flow and just looking at profitability revenue growth etc!

[sirhedgealot] 24/2/2015 11:53

I can't say I was some analyst though. It was all through, inheritance. I learned how to programme computers as a kid in the 90s and to read tabulated music...so reading balance sheets is second nature etc....thanks for sharing your story's guys. I find them interesting. Are the best days of investing behind us for the time being?, I keep getting a nagging feeling of deflation. For certain though is how many good ideas are few and far between. I used to find thirty great ideas a year. In the last year I have only found maybe two.

[sportbilly1976] 24/2/2015 11:50

seems to be passing through this significant resistnace area with ease...720-ish the next stop?

[sirhedgealot] 24/2/2015 11:46

I'm 30 and agree we are all fortunate to be in the position we are in. You guys have got some years on me. I had to spend a long time studying Graham and Dodd to start operating when I was 24. I also feel dividend stripping is a good approach....often I sell positions into dividend rally's if value has been exhausted though. My returns this year have been poor, the last few years were 20-25% but I have been squeezed on free cash flow problems in net nets.

[woodcutter] 18/2/2015 19:12

hooley yep good returns sounds like your a very accomplished investor. I was doing ISA's before they were ISA's, PEP's i recall. I hold a bit of property too with a decent yield, we're very fortunate to be in the postion we are in and i don't take that lightly. I tend to try and read the market and move from small and mid caps to larger caps on market sentiment.

I'm a big fan of intermarket analysis and the interaction of gold, commodities, bonds and the $ dollar index as well as stocks.

Not sure if you've read it but John Murphy's book on this is very enlightening, even if it's a bit dated.

The current divergence between gold (including the CRB index) and the $index is quite striking. it's not often i pay attention to commodities but the inverse relationship with the $dollar index is currently looking very interesting and i'm beginning to look at miners in particular gold miners.

We're not that far away from an inflationary period that will drive the stock and bond markets down in my view, it may be a year or two away but it's a good time to be looking at gold miners. The US are already considering raising interest rates to combat any early signs of inflation and gold miners are a good leading indicator.

I'm a firm believer that when something is cheap we tend to use a lot of it and i don't see commodities staying at their current levels for that long and when they rise we tend to get inflation.

aimho

woody

[irnbru2] 18/2/2015 17:37

£7 squids, looks on.

[irnbru2] 18/2/2015 17:36

This is one hell of a rally.

Why the previous drop.

[hooley] 18/2/2015 13:48

Woody: None taken. I'm a lot older than you and able to play the market without taking silly risks. Never fully invested. I've found dividend stripping worthwhile despite the tax implications - especially in a bull market. I don't bother with tax free instruments - too dull for me. Playing the market rather than wasting it on horses keeps me sane, when I'm awake! Made about 20% last year and rather better this year. Free cash flow is King and a rate of return over 15% has been a good benchmark.

[woodcutter] 18/2/2015 12:40

hi hooley my thoughts were based on the current price verses the target price and the change from neutral to add seemed a little off the mark to me.

hope you hadn't taken my comments personally;-)

i do all right i effectively retired in my late forties but dabbled a bit for a few years before giving up completely, i'll be 59 shortly and have sufficient capital/income to be comfortable till i meet my maker.

my return last year was fairly flat as i was predominantly in cash but the year before over 40% and the year before that nearly 25% so i figure i get it right more than wrong too, i tend to beat the main indicies ftse 100 most years and more often than not the 250 too.

it's a pretty decent size portfolio and fortunately it's all in SIPP and ISA's so i'm tax free too. Haven't drawn on my SIPP yet either, looking forward to that now the rules have changed:-)

no offence meant but i don't pay too much attention to analyst forecasts.

woody

[hooley] 18/2/2015 11:40

Woodcutter: Happy to have you laugh alongside me. As an ex analyst of 30 years experience I retired on a big pension etc at 50. We get it right more often than not. How about you?

[woodcutter] 18/2/2015 11:39

He also has a large TUNG holding, which imv has a lot to do to prove itself and very high risk.

wc

[ursus] 18/2/2015 10:08

Don't be too sure Odey is ahead of the game. A very rough and ready calc of his likely shorting prices (ie looking at when he crossed the 1%, then 2% then 3% etc levels) indicates to me that he has an average price of abt £6.30. And he has had to pay the divs over the period, which I reckon cd be as much as £1.40 - tho cd be less depending on the timing of his shorts. So his price cd be as low as £5.
But then again, Odey expects the financial world to end some time soon... Why does he think LRE is the canary in the mine? Don't think he has any other short so large.

[woodcutter] 18/2/2015 09:05

You have to laugh at some of these analysts, what planet are they on?

hxxp://citywire.co.uk/money/the-expert-view-standard-chartered-rolls-royce-and-brit/a798615?re=32833&ea=125132&utm_source=BulkEmail_Money_Daily&utm_medium=BulkEmail_Money_Daily&utm_campaign=BulkEmail_Money_Daily#i=5

WC

[hooley] 17/2/2015 16:01

Odey have just increased - on 12/2 - their short to 4.7% from 4.35%. Only an agreed bid will see them off?

[salpara111] 17/2/2015 15:49

If they shorted from £9 ish then fair play but as soon as sentiment changed and industry consolidation started you get the hell out!

[hooley] 17/2/2015 15:39

Odey and others don't always get it right. The shares peaked 2 years ago at over £9 and fell by £4. They were broadly right to be short until 2 months ago. LRE delivered throughout in a poor u/w market by way of big special divis. That looks set to be continued for another year to judge from recent coy statements. The biggest danger for the shorters is a pre-emptive bid. Odey is probably still showing profit as they started shorting near the top. I'm reckoning they have had an approach or three from potential bidders.

[salpara111] 17/2/2015 13:32

I really struggle to understand why a so called professional outfit would seek to short a stock trading on a single digit p/e yielding over 10%.
Something quite dramatic would need to go wrong for that to work out.
Given the industry consolidation I am taking the view that the risk is very much on the upside from here.

[scottishfield] 17/2/2015 11:09

Bought this morning (x BRIT)

[woodcutter] 17/2/2015 09:33

There's still a significant short interest.

Odey has increase his position toward the end on January to 4.35%
however JPM have reduce their position last week to 1.27%

Odey has been steadily increasing his position, must be hurting a bit.
JPM also steadily increasing until last week, must've been hurting a bit too much.

needs to break resistance around 660/670p now.

woody

[woodcutter] 17/2/2015 08:09

EC well done closing your LRE short commiserations on CWD, that was a risky play imv, i was considering going long CWD but didn't buy, looks like we both made and error of judgement.

woody

[woodcutter] 17/2/2015 08:06

i've already quite a sizeable holding and continue to hold, the upside has just got better too, BRIT the next to be taken out by the looks of it. Can't remember exactly but i think it's only been on the market about a year, that's private equity!

expect further move up this morning on the back of that news.

woody

[salpara111] 16/2/2015 11:15

Added to my long this morning, the upcoming divi effectively underwrites the share price for the short term future at least.