Stagecoach Share Discussion Threads

[macthepak] 07/9/2017 22:50

DDUBZY - you need to keep your nerve. Stay the course. The further the share price goes down the more attractive the free cash flow yield looks, one of the best markers for a bargain.

I am seriously considering selling some of my holding in Lloyds and buy more SGC

[mattcookson] 07/9/2017 21:41

Perfect time to snap this on the cheap. With the TU coming up at the end of the month, this will start heading north any minute now :).

[ddubzy] 06/9/2017 09:12

Touching 160p now, when will this rot stop?!!!

[macthepak] 05/9/2017 21:03

Pension funds to individual investors will be looking for alternatives for inflation proof income. I cannot see this share going below 160p. The dividend yield just becomes too attractive.

[m4rtinu] 01/9/2017 13:13

For once, there was the chance to have had cake (div) and eat it (SP rise). Now fallen back, which is more what I would have expected, given trend in share price prior.

[macthepak] 01/9/2017 10:12

Up to 170p now!!

For a share that was unloved 3 days ago, now there seems to be a lot of love going around!!

[mattcookson] 31/8/2017 16:46

Nice performance today despite the fact it was an ex divi day today. This will rise steadily from here on till the next TU at the end of SEPT. Go on SGC!!

[ddubzy] 31/8/2017 09:58

Cheers m4rtinu, I see last year was 28th.

[m4rtinu] 31/8/2017 07:40

Yes, being lazy :) Just before end of Sep from memory.

[ddubzy] 31/8/2017 07:36

Pretty disappointing that we got a 3p rise yesterday for an 8p divi. It's all in the next TU to stop the decline now...Being lazy, does anyone know when that is?

[m4rtinu] 31/8/2017 07:31

I was expecting this to get "beaten down" on the back of ex divi status, but seems to be holding OK.

[mortimer7] 31/8/2017 07:28

Ex Divi today 8.1pps, hence the drop in the share price Irritating when ex divi shares appear on the fallers/losers list creating a false impression.

[kulvinder] 30/8/2017 12:07

Appears that way 11%. As CNA is also my watch list.

[11_percent] 30/8/2017 11:47

Don't think is being "driven" down.

Its a bit like CNA, you think "this can not go any lower, and it does".

[kulvinder] 30/8/2017 11:39

Last trade day to get in on the 8.1p divi and yet the price is still driven down.

[njb67] 29/8/2017 06:55

Personally wary of any company where UK government is main customer. Given government finances, there remains huge pressure to reduce costs and raise monies, exacerbated by BREXIT. Despite the rhetoric, UK government finances have improved little since the start of "austerity". When it comes to tenders, price increasingly seen as major determinant.

[kazoom] 29/8/2017 00:28

Hi macthepak,

I know those are direct quotes from the company (so not having a go at you) but your first and second points are contradictory.

What the company should have said was :

"No significant change to 2017/18 adjusted EPS expectation, because we've decided to lie to you all about our profits over the next two years to the tune of £84m"

To me it is a bizarre and unsavoury piece of accounting :
> Take a provision against future unprofitable trading - which of course hopefully everyone will ignore as the company steers the focus towards the pre-exceptionals performance.
> Overstate profit over the next two years by releasing this provision.

Personally I'm left suspicious that if they have to stoop to that kind of reporting are there other things about the results that we should not trust?

Also it is worth noting that whilst their profitability will be overstated in the next two years as this provision is released; the provision is a non-cash item but it will be offset cash losses in the next two years so there will be a disjoint between profitability and cashflow.

I did very well out of investing in SGC in the past and was looking for a possible entry point but to be honest distrust of their dodgy reporting is keeping me out at the moment.

And whilst you are quite right that they were able to continue to increase the dividends through the last recession - earnings and equity certainly took a knock as did the share-price - down around 2/3rds.

Of course we've seen a big fall already in this market phase - down from around 400p at one stage I do personally think there is potentially more to come.

So whilst I don't think this is a value trap at all and I do suspect that handsome returns will be achieved in the future from the current share price, I do think there may be opportunities over the next year or so to buy at an even lower price.

All IMHO of course.

[m4rtinu] 28/8/2017 12:12

Mac - good post, but I'm still nervous given recent trend in share price

[macthepak] 28/8/2017 10:48

I would argue against a value trap at this time.

Briefly:

FIRSTLY
"No significant change to 2017/18 adjusted EPS expectation"

SECONDLY
"Stagecoach have set aside £84.1m exceptional charge to provide for anticipated losses under current contractual matters at Virgin Trains East Coast, over the next two years. Business is expected to be profitable from 2019"

As of 29 April 2017, the Company’s distributable reserves totalled
£247.7m (2016: £338.0m), which compares to dividends paid in cash in
the year ended 29 April 2017 of £67.1m = 11.9p/share (2016: £62.0m = 11.4p/share).

There is plenty of reserve to maintain or even increase the dividend over the next 2 years

THIRDLY
"During the year ended 29 April 2017, Stagecoach extended the duration of
£480m of committed, bi-lateral core bank facilities by a further year
to October 2021 and undrawn, committed bank facilities of £333.8m as of 29 April 2017(2016: £281.2m) were available to be drawn as bank loans."

FOURTHLY
"The three main credit rating agencies continue to assign investment
grade credit ratings to the Group"

FINAL COMMENT
Unlike many other sectors of the economy public transport did not suffer as much during the 2008 recession. Stagecoach not only maintained but increased dividend during the recession: 4.1p (2007), 5.4p (2008), 6.0p (2009) and 6.5p(2010)

[sawadee3] 28/8/2017 09:42

Goes ex-div on this Thursday chaps :-)

[m4rtinu] 27/8/2017 19:02

11% - You may be right, but care to elaborate?

[11_percent] 27/8/2017 12:51

This is a value trap......sell.

[teasybee] 25/8/2017 09:57

Well at least one of the brokers is wrong :-)

[macthepak] 24/8/2017 16:19

The latest broker reports which are currently outstanding on Thursday 24th of August state 4 analysts have a rating of “strong buy”, 0 analysts “buy”, 4 analysts “neutral”;, 0 analysts “sell” and 3 analysts “strong sell”.

Most recent broker ratings
24/07/2017 – Stagecoach Group had its “Hold” rating reiterated by analysts at Jefferies. They now have a GBP 190.00p price target on the stock.

13/07/2017 – Stagecoach Group had its “Reduce” rating reiterated by analysts at HSBC. They now have a GBP 160.00p price target on the stock.

07/07/2017 – Stagecoach Group was downgraded to “Hold” by analysts at Shore Capital.

05/07/2017 – Stagecoach Group had its “Outperform221; rating reiterated by analysts at RBC Capital Markets. They now have a GBP 225.00p price target on the stock.

29/06/2017 – Stagecoach Group had its “Underweight” rating reiterated by analysts at JP Morgan Cazenove. They now have a GBP 149.00p price target on the stock.