Melrose Industries Share Discussion Threads

[darrin1471] 26/4/2022 15:03

If I could foresee the current supply chain problems for China then I hope anybody responsible for inventory would also see the risk and would have taken appropriate action early on.
I just don't see an easy exit strategy for the zero covid policy. If covid is widespread in Shanghai and Beijing then it is likely to be everywhere in China. China has to keep locking down like we did or the deaths will be staggering.
Early vaccinations in China were given to health workers and essential workers(drivers) before the elderly. China could prioritise manufactures employees over the elderly and lock down everyone else. Anything seems possible in China.

[essentialinvestor] 26/4/2022 14:56

Would have thought automotive that is the gem, particularly given the transition
to EV.

Structural problems in auto atm, which are likely worsened on widespread China
covid measures.


Aerospace in the early stages of what should be a multi year cyclical recovery,
however weakening macro may crimp that somewhat and also have a read through to auto demand.

[darrin1471] 26/4/2022 14:36

I thought it was interesting that they specifically chose to highlight aerospace.

[essentialinvestor] 26/4/2022 14:33

Darrin, the scenario you outlined a number of times on manufacturing, is now playing out.

Big potential damage to supply chains over the summer months.

[essentialinvestor] 26/4/2022 14:22

I have managed to get my average to 1.246, to be precise, which while by no means ideal, is a hell of a lot better than over 1.40 a share at one point.


rogue, thanks for your guidance here which prompted me to sell at between 1.30-1.32,
buy back and then trade again.


Obviously if markets sell off hard and there are increasing headwinds,
MRO could look very ugly.


The major misjudgement I made, besides buying too soon!, was selling quite a few
bought near the March low at up to 1.18 pence a share. Had expected a trip back
down to under 1.10 again - and tbf also did not anticipate wider equity markets
to remain until recent days, so resilient.

I'm holding atm approx 60% of the amount held near the share price traded briefly under 1.10 a share.

[roguetraderuk] 26/4/2022 13:59

darrin, id expect that investor day to be more specific re rest of year. nearterm will just be guesswork.

[darrin1471] 26/4/2022 13:58

Also:
"An Aerospace Investor Day is to be held on 8 June 2022 to explain its exciting full shareholder value potential. The Group will also benefit from exceptionally strong long-term future cash flows in Engines."

[roguetraderuk] 26/4/2022 13:46

april 12th low the one to watch now. china covid lockdowns will def have an effect on manufacturing and demand there but it will be too early for anyone to quantify it, nor would they want to until its known how many weeks delays will come of it. but shares will react along with the headlines. so that low i mentioned is the next one to watch, if browkn brings in 2022 low into focus. then than gap just under a pound. id guess that would be the low for the year assuming just technical recessions in the uk and europe while the states gets through between 0-1% at worst.

[essentialinvestor] 26/4/2022 13:42

Usually put out an AGM trading update yes.

China slowdown and lock downs the latest in a long list of woes.

China situation could have a significant impact on the manufacturing sector
over the next few months.

[rettah] 26/4/2022 12:49

Trading update next week?

[essentialinvestor] 26/4/2022 12:05

Starting the next move lower?.


Growing China lock downs may be an ugly headwind for many global supply chains.

[roguetraderuk] 20/4/2022 16:20

ft100 is higher largely on the utilities and resource plays such as the miners and oil. if us mkts find a footing you might find the ft100 stumbles or certainly underperforms as those positions get trimmed. but it would mean the others such as the industrials would take a turn to move higher.

[essentialinvestor] 20/4/2022 15:42

To get near 90 pence on MRO might require either a sharp sell of in equity markets
or a very weak trading update, either could happen. However, that aside a lot of
bad news looks baked in already.


I expected wider equity markets to weaken and the reverse has happened.

[roguetraderuk] 20/4/2022 15:34

EI, ive managed to work my still underweight to break even at current levels so now not going to add to it unless 100 and maybe 90p or so hit. if we get a rally i might release some by 135-140 as theres a thick layer of resistance there.
not in senior presently. was looking at a pound to build a position for more of a keeper but never got there before bouncing a bit. still lower highs so we might get there but as you say a fair bit priced in in many names but that doesnt mean they cant do more pricing in.

[netcurtains] 20/4/2022 15:26

I do have a sort of short term target for these - but just a guess. About £1.40
I guess depends a lot on supply issues and demand etc.
But on paper, it has a lot of NAV but it really depends on how much the intangibles are worth.
With SENIOR the assets are nearly all "real" assets, it has hardly any intangibles.

So taking that into account I like them both (a lot)

[essentialinvestor] 20/4/2022 15:16

rogue, MRO read across from SNR today. Got a tad lucky buying a few Senior yesterday.

As mentioned above not convinced we have seen the lows here, but let's see.

[roguetraderuk] 20/4/2022 15:13

EI, mro started to look a bit better as have a few other industrials last few days. possibly due to positioning, mkt having got overall quite bearish. even so the americans v quick to sell on the open and third time in the last six or seven trading sessions.

[essentialinvestor] 20/4/2022 15:13

Well the MRO longer term record is exceptional, with past performance being no
guarantee of future success proviso!.

A little unfortunate with the GKN, first covid hits, then chip shortages in automotive, now Russia sends commodity prices soaring and increases economic slowdown
risks.

A lot of bad news looks priced in to me, whether we have seen the low less sure on.

[netcurtains] 20/4/2022 15:06

EI: I'm not a day trader so I'm ok with volatility. I like value and good prospects.
ITs not always easy to spot firms that have good value and good future growth.
So, touchwood, this is one of those shares.
But its only a small position so no major harm done if I have guessed incorrectly.

[essentialinvestor] 20/4/2022 14:42

Just be mindful of the volatility here, MRO can move 10% in either direction
in double quick time. If you can live with that, then you should do nicely.

[netcurtains] 20/4/2022 14:38

Thanks for the info EI.
I've done the inverse of you - taken a small position here in Melrose and a larger position in Senior. Its probably a silly reason - being old I liked the name "Senior".
Ha ha

[essentialinvestor] 01/4/2022 16:26

rogue, just 3,400 shares so far. Made a not of your post yesterday, appreciated.

[roguetraderuk] 01/4/2022 15:23

ecm doing a nice pullback might see 1000 which would be interesting hopefully nobody gets any ideas about buying the dip here right now. 10 quid would be more constructive/sustainable for a bounce poss.