Xchanging Share Discussion Threads

[wcjan26] 23/9/2010 12:31

exactly.

and, i might add, never short it without gtd stops in place. there are numerous cash rich global buyers circulating around this whole sector, and a speculative bid can't be ruled out (including from management).

[simon gordon] 23/9/2010 12:26

W,

Yes, let it bounce with the new CFO and then short it before the prelims, its nuts to short it at 125p.

[wcjan26] 23/9/2010 12:24

if i was short from 125p, i'd close now and swallow the loss, avoid the margin call. and then if i really believed the bear case, re-enter short at 190p, the top of the old range.

[wcjan26] 23/9/2010 12:22

and a lot of them seem to be in at the bottom - lucian "is that a boy's name" amongst them

[simon gordon] 23/9/2010 12:18

W,

Doesn't look like the shorters have even started to close yet.

[wcjan26] 23/9/2010 12:10

simon.

i'm with you. sold off in a bear raid with no permanent FD in situ.

now broken 140p - should be 160 in near term IMO

[simon gordon] 22/9/2010 20:03

UBS are out with a new note, basic points:

~Target 145p.
~If guidance is firmed up 200p.
~Accounting looks fine, no serious concerns.
~Investor day 5th October, should be T/U.
~EPS 2010 = 16p, 2011 = 17.5p.
~Biggest concern is BAE retrenchment in UK procurment due to spending cuts.
~New CFO is a positive.

UBS have called XCH the best out of the broking community, the HSBC note at the moment looks like a red herring. I can't see any point being short until the prelims in 2011, if the investor day goes well it could see 160p.

[simon gordon] 21/9/2010 14:37

Time to put on some trousers:

[simon gordon] 21/9/2010 14:19

If the new CFO hadn't come on board I'd still be negative, shorters have probably got nothing to hang their hats on until the prelims next March.

If it cracks 140p its straight up to 160p, not very comfortable if you are short.

[trendfloor] 21/9/2010 14:11

Sell Xchanging (XCH) at 125p
By Lucian Miers, the Bard of the Boleyn

Reeling from the recent Connaught fiasco, red faced analysts and burned shareholders must be nervously looking at the Support Services sector and double checking that they fully understand the accounts of this famously opaque and complicated sector. One company they may be focusing on is Xchanging (XCH)
XCH is a fast growing business processor. It provides human resources and technology services across a broad range of industries. Its mcap is some £300mn.

On 25th August it took the slightly unusual step of noting its share price decline and calling for a conference call "to ensure that any perceived lack of clarity about the company's position is corrected"

After a brief rally the shares continued their drift with HSBC issuing a sell note yesterday. I am not an expert on these highly complex accounts but I can see storm clouds gathering for this company.

Analysts seemed concerned that the company over payed for an Indian business in 2009. It seems reluctant to divulge detail on the terms of its banking covenants. It appears to have potential off balance sheet liabilities. The accounts seem to be littered with exceptional items and restatements, so that whether they made 15p or 3p last year is a matter of opinion. The company has various joint venture partners, some of whom have put options that can trigger an obligation to be bought out. The finance director recently left.

With negative tangible assets , net cash on the balance sheet of 3.5mn and a terrible looking chart XCH throws up too many red flags for me and I have opened a short position at 125p.

Lucian Miers is East London's most feared short seller

Posted by ShareCrazy on Sep 9, 06:28 AM in Comment

[envirovision] 21/9/2010 14:04

Stength and indeed confidence seems to be gradually building here. Can we break £1.40?

[simon gordon] 20/9/2010 16:45

W,

I reckon they'll just stay focused on building their platforms for growth and executing on the sales pipeline. If they do this and the new CFO beds down well with the City, then in 18 months time this share could be 300p+. Hopefully, David Andrews will have learned that it is best to under promise and over deliver.

I think the new CFO coming in will right the ship and start to restore confidence, if the old CFO was in charge of analysing the books at Cambridge he did a mighty bad job of it, maybe he's lost the confidence of the XCH crew!?

Cambridge is at the heart of the dismal share price.

I bought some shares today.

[wcjan26] 20/9/2010 16:37

i wonder if they would take it private if the share price does not recover?

[haroldthegreat] 20/9/2010 13:17

i repeat nobody buys £2million worth of shares if there is a problem in the company!

[simon gordon] 20/9/2010 12:19

160p catalysts:

~Shorters close.
~New CFO buys a big line of stock.
~IMS on 23rd October.
~Batch of small orders.

According to Canaccord no major contracts are up for renewal in the next two years, which means a Black Swan client departure looks remote.

I have had a look at the balance sheet and it doesn't look too dangerous as long as profits come in as expected, I admit my knowledge of PLC accounting is from a fairly low level, does anyone else have a view on the balance sheet?

Recent order:

[envirovision] 20/9/2010 11:50

OJK thanks, well if we assume theres still a lot of loan to be bought back 1.60 seems reasonable. I should imagine if Ken Lever were to buy next, then they could be heading back to £2 fairly quickly.

I have take a holding here.

[simon gordon] 20/9/2010 11:24

Enviro,

I presume so, I have little insight into the whole loan / shorting process. When the DE chart works you can see the share plunged as the stock on loan went up.

Data Explorers:

Their charts aren't working this morning.

[envirovision] 20/9/2010 11:18

Simon are 12% of the shares still on loan short?

[wcjan26] 20/9/2010 11:05

definitely looks good for a move to 160p

[dnfa1975] 18/9/2010 17:10

tasty can of worms

[simon gordon] 18/9/2010 17:07

12% of XCH's stock is out on loan.

HSBC have a 105p target because they perceive weak cash conversion and don't like the staff attrition.

UBS are negative to neutral.

"Caroline de La Soujeole of Seymour Pierce issued a buy note, saying:

Finally some good news from Xchanging who announced this morning that its search for a new chief financial officer had come to an end. Mr Lever has an impressive background with stints as finance director at Alfred McAlpine (1991 to 1995), Albright & Wilson (1995 to 1999), Tomkins (1999 to 2007), and more recently Numonyx.

The statement also noted that Mr Lever is a member of the Accounting Standards Board, the UK accounting standard setting authority and previously chaired the Financial Reporting Committee of the UK 100 Group of Finance Directors. Presumably this information was provided to calm investor's nerves following speculation over Xchanging's accounting practices. We reiterate our buy recommendation and 250p target price."



BULLISH
~Directors have spent heavy buying shares.
~New CFO will have taken a look at the books before joining.
~New CFO is class and has strong City experience.
~Potential sales pipeline is expanding.
~160p = c.10x.
~Chart support before the shorters smashed it, 160p.
~What are the shorters going to hang their hat on, prelims March 2011?
~Shorters start closing and share bounces back to old support 160p.

BEARISH
~IMS in October indicates top and bottom line contraction.
~New CFO finds a can of worms, resigns and company collapses.
~BAE decide to take HR & Procurment contract in house.

Based on the new CFO if I were short I'd close my position.

[dnfa1975] 18/9/2010 16:49

will someone audit Xchanging's financial position and working in progress position now?

[wcjan26] 17/9/2010 15:09

good chart set up -

gtd stop at 108p, tgt 160p; £50/pt

[wcjan26] 17/9/2010 11:57

worth a small punt here.