Norman Hay Share Discussion Threads

[acol] 06/1/2002 13:51

SKYSHIP

I used to use Level 2 but dropped down a level due to the state of the market and lower activity on my part. I miss the extra info provided by Level 2 although in this particular case it was not a relevant factor. The simple truth was that the cheapest offer was 23p. It would have been helpful to know if there was 1 or 2 mm's quoting that price. However, I would have still placed the limit at 22p.

For small illiquid stock I always use a decent stockbroker who can get me a good price - substantially better value than using an internet dealer. The quoted price for HNN was 23p. I placed a limit of 22p and my broker managed to buy at 21.5p. We both knew that this was a realistic price because the mm had just bought 10K for 21p. The mm made a quick £50 profit, I was happy and so was my broker.

Sometimes it is a double edged sword because if I get a very good price then it is indicative that the mm's have too much stock and the price will probably drop - leastwise short term.

I should add that I nearly always monitor the trades over a period of at least two weeks. I therefore have a reasonable idea as to whether the mm's have surplus stock or if they are short.

[skyship] 05/1/2002 16:07

Well done ACOL - though how did you manage to buy at 21.5p. I saw that sale too, but without Level 2 I didn't see a cheaper offer than 23p. Do you trade through a broker, if so, perhaps I should consider reverting to a broker for "Hands on" limit transactions. Perhaps paying the premium for Level 2 also has a fairly short payback. Would appreciate your comments......SKYSHIP

[acol] 04/1/2002 21:33

I bought into this stock at 21.5p yesterday. Took advantage of the (obvious sale of 10K @ 21p. This transaction was delayed while the mm's dropped the price by 1.5p. My buy shifted the price up a 1p. There is obviously not much stock about when small transactions have such a big effect on the market.

I've been tracking this stock for several weeks. E-mailed the company for a copy of their Annual Report which was delivered the next working day. (signs of an efficient admin!) I wanted to check the pension arrangements. I tend to avoid companies which have defined benefit schemes because of the potential for large shortfalls in the near future. Fortunately, contributions for such schemes ceased from 1993 and they are in the process of being wound up with a view to establishing surplus/liability. I'm not 100% certain that there will not be a liability but the wording of the report suggests that the bulk of the pensions are of the defined contribution type.

On reading the report I was also impressed by the responsible attitude of senior management with regard to share options. IMO the options are priced at a sensible level which should provide good incentives/rewards without the greed which is typical of so many companies which reward directors for mediocrity and failure while stuffing the private investor. Dana is a share in point but it applies to so many companies thesedays - large & small.

Time will tell whether or not this is a good investment. Engineering company shares will obviously suffer in a prolonged downturn. I just hope that it can keep its head above water until the arrival of better times.

[skyship] 04/1/2002 19:53

A Happy New Year to followers of HNN - I've joined you today @ 23p.

This looks to me like the sort of stock you have to bid for when it's dull (rather like TDC); and set a sensible limit in view of the wide spread. It was 20-25 at the beginning of the week! I'll average down @ 21p if offered. Looks to me as though at these levels it should offer a 30% upside sometime in 2002.

Airrage - I see your name on this thread. My thanks for your concertedly bullish comments on MCR a couple of months ago. They tipped my hand to more than double up on the fall to 42p. Sold out the increased holding today for an unexpected turn @ 54p - perhaps too soon, but a prifit was a psychological "Get out of Jail Free" Card. You were also right about LGD - here again I've averaged to advantage; and expect to recoup matters around the 30p level before too long.

[rickster] 31/12/2001 11:20

Happy New Year to you all!

Well I've come back after a short break to find the price has drifted to 20p - not at all worried though as there has to my knowledge been no change in the situation. I would love to buy some more but my other half would probably shoot me if she found out - meant to be saving towards a deposit for a bigger house!
However, I still think the story is good, and hopefully those of us who hold into 2002 will see the upside when it occurs.

Have a great 2002

later
Rickster

[nald] 29/12/2001 14:14

Still holding also...HAPPY AND PROSPEROUS NEW YEAR One and All! Keep moving along with positive thoughts Rickster/airrage.

[airrage] 29/12/2001 00:58

Merry XMAS holders, looking forward to the New Year. Don't worry about the price drift on low volumes, this extreme undervaluation can only last so long.

[jasonge] 18/12/2001 09:20

Thanks Rickster, like you say its not a lot when you look at it, nothing has happened for a while now suppose it suprised me a bit!
I'm holding too

Cheers
Jason

[rickster] 17/12/2001 16:47

Apologies - nearer 50k have changed hands but still only £10k worth.
later
Rickster

[rickster] 17/12/2001 16:42

JasonGE

I wouldn't worry too much - 25,000 shares doesn't represent a sell off - just over £5k's worth! I would suggest that it might be someone who is bored with seeing no action and thinking they will switch into something a little more exciting!
Must admit the silence is deafening but coming up to Christmas we are unlikely to hear much IMHO. Into the new year we have to hope the MBO takes place as was tipped some time back now. If it doesn't happen the divi is welcome at over 5%.

I will be holding and waiting and I think some of the other posters on this thread will be doing the same.
This could represent a further buying opportunity?
later
Rickster

[rickster] 06/12/2001 17:28

A little price drop I see - MM's trying to generate some interest in the stock or trying to get hold of some by encouraging buyers??

later
Rickster

[rickster] 03/12/2001 10:20

I truly hope so airrage. It'll only take one good bit of news and a little media coverage to get this one flying IMHO.

I can be patient in the meantime!

later
Rickster

[airrage] 27/11/2001 13:02

If HNN acheive their EPS of 6P people will be fighting to get in!

[rickster] 27/11/2001 00:46

Airrage

Thanks for the update. The EPS figure looks interesting. I'm sure that's not in the current share price. The fact this is a true penny share (by that I mean low price and small company) will mean that the price could really steam ahead on any news. As you point out it is half it's NAV. I wonder how that compares to the sector avg?

No news appearing and the volumes are very low but I don't intend to sell. If anything I will add more, albeit after I have sold some others!

I'm sure our perserverence will pay dividends (no pun intended) in the end!

later
Rickster

[nald] 25/11/2001 20:40

airrage

Noted; still holding also.

[airrage] 25/11/2001 19:33

Just in case you're thinking of getting impatient for the bid(which even at double todays price only equals the NAV and no premium);

Fundamental Update;
Price 24/29P
mkt cap 3.3mill
div 8.3% (3times covered)
Price to Book 0.5 (selling at half NAV)
Price to Sales 0.2
Operating profit margin 5.5%
EPS forecast growth 34%
2001 expected EPS = 6P giving PE = 4.7

To see what HNN do;


Still Holding.

[rickster] 19/11/2001 17:19

Airrage

I agree. I am happy to sit with these for as long as it might take. If nothing happens I will have got the divi and any share price rise will be a bonus. I am increasingly believing that we won't hear anything this side of Christmas but you can never tell.

As for reading the MM's minds, it's impossible!

Sherwood is not a share I follow. I just read a tip in a sheet I subscribe to saying it was 95% sure they would be taken private. I thought about buying but didn't. The management have subsequentally denied any takeover plans so if you can trust management then it's not going to happen (I invested in ITX on management claims so don't believe them!).

later
Rickster

[airrage] 14/11/2001 18:00

- I reckon the cancellation of options cleans up things prior to any corporate action.
- I don't follow Sherwood, appreciate any leads though.
- Any sale of shares seem to be hovered up quickly enough, and the MM's discourage buying by putting up the offer price(now back up to 28P). It's difficult to guess anything from MM activity in the best of times, let alone on such an illiquid share but I can't help feel they're filling an order or acquiring themselves. The price goes up on the sale because I guess relatively it is an overhang to daily avg. volumes(but again pure guesswork at this stage).

At the end of the day, HNN are undervalued, high div(covered)and future corp activity make this a strong hold. If activity does emerge, we are looking at a 50% gain instantly with no time to jump on after an announcement made. Good Luck all.

[nald] 14/11/2001 10:19

Lots of strange things going on in many places! Hope this is proactive one!

[rickster] 14/11/2001 09:26

A big sell, relatively speaking! and the price goes up? Was this a small stock overhang which was holding the price back? To be honest it's probably nothing but it is strange to see the share go up on a big sell??

later
Rickster

[rickster] 13/11/2001 10:17

Nald/Airrage

Interesting developments. I am happy to trouser the divis and await further developments. Sitting on a small paper loss as I bought at 27p but nothing a couple of pence won't put right!

In terms of the Sherwood situation, interestingly enough it was tipped by the same source as I originally heard about HNN through! Let's hope the HNN story is more reliable. At least the board have not come out and denied anything as yet!

The cancellation of share options should be good news as you both say.

later
Rickster

[nald] 12/11/2001 23:46

airrage

Yes did notice. Would think disagreement...and interestingly, cancellation of options. Why? Prelude to cheaper take over perhaps? Probably a little dusting down before some kind of forward activity.

Incidentally...have you (and Rickster) seen what happened today with Sherwood (SHW) any thoughts?

[airrage] 12/11/2001 17:02

Has anyone noticed the board changes(non-exec's stepping down)6Nov. I was on holiday last week, so only just noticed myself. Could be a result of disagreement about future action, or pre-lude to further activity, or it could mean nothing.

The only immediate beneficial result to shareholders is a cancellation of 1million share options(less eventual dilution). This makes it even cheaper to be taken over.

[airrage] 11/11/2001 23:58

The share price drop reflects the divi payout, don't let this worry you as this is normal. All things still stand, enjoy the cash payout.