Tclarke Share Discussion Threads

[dozey3] 25/2/2018 12:54

Considering switch out of long held CTO into Alumasc (ALU), the thinking being that CTO caters only for the arguably weakening home market whilst ALU enjoys a fair degree of exoport success. Also ALU must be IHT exempt tho that won't bother you youngsters. Both co's seem well managed, financially robust and quality- as well as profit-driven which seems essential for growth imo.
[edit: ALU is not IHT exempt - I’m years out of date sorry]

[cc2014] 22/2/2018 10:26

Well our friendly fairly stupid algo bot got one fill of 8888 yesterday at 77.4 and is still there at 77.4 getting no further fills.

I don't believe the bid has moved up to 78 on as little as a 250 share buy so assume there's someone else in the background on the back of Morgan Sindall's great results. MGNS now up 5% as I write.

[cc2014] 20/2/2018 08:44

Well I'm surprised. The algo bot got out of bed at 7:50 today in the opening auction and has already moved up a penny to 77. Surprised because it rarely starts work until after 9.

Even more surprised that that I can get 77.5 to sell and only around 5000 shares are available to buy at 77.9

No idea why the algo bot is so keen this morning. I do see blue all over the stocks in my construction and builders monitor so maybe it's just a change in mood for the sector. This would be welcomed

[cc2014] 19/2/2018 12:02

I have no significant rationale for this other than gut feel but it feels like the endless institutional selling has finally stopped.

Certainly the fall in volume suggests that the institutional sellers are no longer running a mentality of "need to shift x thousand this week regardless of what it does to the share price"

Nor does it feel that the buying down here is short term traders who will simply sell on for a couple of points or sell out if the trade doesn't work within a month, but more PI value hunters. Today's trade is typical. 6454 shares at 76.9p comes to exactly £5k with commission and stamp duty.


It will be interesting to see what happens. On a short term basis there's computerised buy program running which slowly moves up the bid. It has the patience of a saint though, doesn't get out of bed until after 9 and sometimes not until 10:30, isn't moving up by more than a penny or so a week and isn't interested in competing with other trades on the book.

Is it starting to annoy Winterfloods who largely control this stock with Singer. Winterfloods are trying to square their book right now after the buy at 76.9 and have imho loaded a fake sell order. I expect if their plan doesn't work by late afternoon they will try something else.

[edmundshaw] 13/2/2018 12:06

The NYSE still badly overvalued, though when or if it will correct who knows? And you know the FTSE always follows New York. However smaller companies do not always play ball...

I am holding what I have (most of which like CTO are already in value territory), but waiting for bargains later in the year, so not splashing the cash right now... I doubt I am alone in my strategy. I cannot see stocks rising much short term, and they may fall.

I think CTO though will recover on positive results. Like Pendragon today...

[cc2014] 13/2/2018 10:22

I'd say it's an impact of the current market. It's not just CTO were volume have collapsed. I see it on lots of stocks.

Retail investors waiting on the sidelines probably prepared to pay 78 but scared the market will fall again and hoping to get in at a crazy low price. Probably the wrong way to think about it as best to buy when the price is low and it's certainly lower than a month ago.

Fund managers definitely sitting on the sidelines and not convinced that the bottom is in. Interesting this as these are the same fund managers who were buying when the FTSE was 7800

I suspect we will see confidence slowly return. Think Dow needs another test of the low and that's when the buying will kick in. The fundamental data is good worldwide so buyers will return when they are ready.

[kito692] 13/2/2018 09:02

Really low volume last few days not sure if that's a good or bad sign?

[cc2014] 09/2/2018 09:33

Construction output

Actual 1.6%
Forecast 0%
Previous 0.4%

So, let's see whether this has any positive impact on the sector

[cc2014] 08/2/2018 08:16

Something going on here? Buys and rise odd? tipped?

Someone was trying to accumulate yesterday with replacing 6867+6759+6656 and they weren't filled at the end of the day but three quick buys this morning is odd.

Just Peel to knock out at 78 and then order book gaps to 82.2

Edit: two hours on and the price has fallen right back as someone has sold 9064 shares at 74.22 and 7698 at 73.22. It's doing my head in especially as I note someone bought 7698 at 77.40 in the first 15 minutes of the day. It seems more than a co-incidence. Surely it can't be the same person who put an incredibly tight stop in which got breached?

So, back to square one. 16k shares sold around 74 which the MM will pass on for a healthy profit. Watch them get passed on during the day

[sirrux] 06/2/2018 11:44

Quite sure it's general market sentiment and that more UK plc blow ups are expected but good businesses will always prevail, I think that's the only question that needs to be asked here. The tight margins mean that there isn't much of shock absorber in place and when markets are jittery shock absorbers (or 'margin of safety') are much sought after characteristics. The recent blow ups may actually help margins tho.

[cc2014] 05/2/2018 13:09

So, the question is whether we have already had the general market retreat, or it's going to continue. FTSE is now down 450 pts from the top. Dow is down far less in percentage terms.

Dow may or may not continue down. It wouldn't surprise me if it does fall more, but for FTSE I think we're at the point where dividend yield will protect it from any further sizeable fall. There will be individual stocks though that may get pummelled. Tech ones, ones without yield, ones where the story is hard to value (thinking Purple Bricks as a good example. Best to stick to buying those with yield if you are risk adverse.

Bitcoin has to work it's way through but it's getting there. Now sub 8000 as I write. At least most of the money in Bitcoin is real money and not on margin. The miners will keep mining it and Bitcoin will continue but the large numbers of ICO's may disappear.

I'm thinking a 450pt fall on FTSE is enough and now's the time to buy. Maybe save some in reserve in case if falls another 200pts. Depends on your attitude to risk. I took a small long on FTSE this morning at 7362. Seemed like a reasonable risk/reward trade

[pugugly] 05/2/2018 12:16

Broker N1+Singer - Corporate So far as I can tell rec Hold but cannot find any 3rd party research - Agree a solid company careful with contract quotations and better tahn a deposit account but in current UK construction/contracting market cannot see much upside or downside for that matter - and if general market retreat cannot see it holding out - OK may lose less than ramped high tech but a loss is a loss.

[rivaldo] 05/2/2018 11:54

News that £200m is to be invested at Cambridge Science Park in conjunction with China, building 5 new buildings.

Given CTO's historic record at the Park (see prior article I posted here) then there should be lots of new work to come....

[cc2014] 05/2/2018 10:30

I too subscribe to "no point in having a portfolio which tracks the FTSE."

I have 14 stocks and 1 bond in my portfolio and I have a mix of decent paying yield stocks and growth stories. Some are both which are even better. I'm pretty comfortable with 15 - it's a number I can manage and know the companies inside out. I would be comfortable raising this to 20

CTO comprises 48% of my portfolio with no other stock over 10%. I would not recommend this approach unless you are absolutely sure of your investment. My purchases have been at a variety of prices from the low 40s so it didn't start out as 48% of my portfolio but a lower percentage. Regrettably I have a few in the low 80s when I've got a little over-enthusiastic but this is only a regret in terms of my timing not my willingness to hang onto them.

My reasons for the trade are:
1. I worked at Director level in the M&E contracting industry for 8 years so I know this business inside out.

2. The board of CTO has the strategy right for their sector

3. I have met Mark Lawrence the CEO, other members of the Board and some of their senior staff and I'm comfortable they know what they are doing, work together as a team and their skills match those that staff in these senior levels should have

4. I like the style of under-promise and over-deliver

5. The trading updates and RNS's are absolutely clear. There is no attempt to paint a picture that is either better or worse than it really is.

6. The P/E ratio, EV, net cash all support a view of a healthy company that is managed financially well. Only the NAV is a drag due to the pension scheme deficit which they have a published recovery plan for and increasing bond yields will improve this over time regardless of the recovery plan

7. The dividend of 3.3p (probably 3.5p when results are published) gives me a yield of 4.4%. As they are only paying out 32% of post tax profits as dividends and they have no debt to speak of except the pension deficit which is being recovered anyway, the worse case scenario would appear to be that the dividend would provide a floor under the share price

8. Finally the current £6.5m profit is being produced against a background of low economic growth and poor construction output & PMI's. When these figures pick up sometime in the next 5 years profits will grow fast through a margin pickup.


Over a five year period It's king of like I see the dividend providing a floor such that the dividend yield won't let the share fall below 70p, so a downsize of 5p, but I've got an upside of 175p.

[dtaliadoros] 03/2/2018 19:12

Effortless, high concentration definitely makes for more interesting rewards when things go right, and also in a way justify the time spent looking for the next conviction idea.

I run 2 portfolios......my SIPP is my slow boring income earning portfolio, and diversified against 40 holding, quite of few which are just ETFs.

But the portfolio that excites me the most is my growth one, and which just 10 holdings and this is the one that I allow a single holding to get as large as my conviction thinks its justified....and I have to say....this 'riskier' portfolio has been my best earning safer portfolio, as my boring SIPP one had Carilion, Centrica, Provident finanicanl and capita amongst the holdings. Ouch :)

[edmundshaw] 01/2/2018 21:38

I wonder if CTO is being confused with the outsourcing sector - Serco, Interserve, Carillion, and of course now Capita. That might explain some of the weakness. And of course half the investment world is running scared of debt these days.

All in the price and more I think; and of course the focus on contract quality and good margin will help CTO muchly...

[effortless cool] 01/2/2018 14:22

DT,

I currently hold 16 different shares, with concentrations ranging from about 1% of my portfolio to about 10%. I would be willing to go to 20% for a high conviction idea.

I'm not a fan of diversification, since to get a meaningful return from those ideas that work, you need to have an outsize position. Having 0.5% of my portfolio in a share that doubles seems like a huge missed opportunity, since 0.5% moves are just daily noise; 5% on the other hand, makes it worthwhile.

I know why I buy a share and tend to hold it as long as my buy rationale (updated for any subsequent information) holds. This means that I tend to run winners and cut losers. CTO, however, is a loser that I have held and added to because the story has always stacked up.

I wouldn't recommend this approach to everyone. I do intensive research on the shares I buy and I have a high risk tolerance.

[cwa1] 01/2/2018 13:30

Paul Scott comment:-

[rivaldo] 01/2/2018 13:14

N+1 Singer have reiterated their forecasts for this year of:

13.2p EPS
3.7p dividend
£11.3m closing cash, which will be reviewed - and presumably increased significantly - following March's results.

[dtaliadoros] 01/2/2018 12:54

Effortless....20K! You must be loaded. Out of interest, how many stocks have you got in your portfolio. Are you highly diversified, on focussed on narrow group of shares.

[effortless cool] 01/2/2018 12:10

I am happy to see a reduction in the order book if, indeed, it reflects an improvement in gross margins, as implied by the statement:

"This has eased back from the record high reported during the course of 2017, a reflection of our selective approach to tendering rather than lack of opportunities".

[tuscan4] 01/2/2018 11:53

Looking at the order book, it would appear that it has moved from £380m at the November 17 update to £337m at the end of December 17. I think that there were quite lumpy sales at the end of 2017 but if we guess at say £65m in the period from 11/17 to 12/17 , the new order inflow in that period was c £22m. Quite low . If we put the sales bookings at £70m then new orders were £27m. I know this is a lumpy business and we are not too sure how they calculate the order book, this does confirm that there has been a slowdown in recent months.
Also a little disappointing that with a jump to £167.2m sales in the second half that they are not much higher than £6.5m pre tax.
With all the turmoil in the industry they are wise to make few predictions re 2018.
Still think £7.5-£8.5m pre tax is likely this year. Pension fund deficit to fall rapidly as yields rise, improving cash, p/e below 5, EBITA/Enterprise Value c 2.5.
One of very few stocks offering value in this market IMO.

[cc2014] 01/2/2018 11:38

I agree - the most frustrating share in my whole portfolio. I think it best I just come back in 5 years time and stop watching. I won't of course.

However, I am being offered 79.5 to sell which suggests to me that the share price has now stabilised and maybe all those buy trades on the order book are real. If I am optimistic maybe someone is collecting? Probably just wishful thinking.


From this mornings RNS - it's pretty clear to me the company is trying to add a USP to it's offering. The cost of a building is only a small part of it's lifetime costs. I don't think the analysts appreciate this

"We will continue to target projects for margin growth from our core M&E markets as well as our other developing revenue streams, particularly in the areas of technology and digital integration."

[effortless cool] 01/2/2018 11:12

This is a most frustrating share. I keep being tempted into buying more, in spite of never making any money on it. I just added another £20k, and this time that is it.