Good morning, today is a jolly of sorts I'm being shuttled off to Paris for the day to expel my knowledge to a savvy trader. I have to say that as a) he reads and b) he's paying yours truly. So whilst I await a flight, here goes...
Too many are quick to pooh-pooh the negatives of stocks, Foxtons was an overpriced IPO (My view) thus short. Likewise the London bubble as discussed here with Berkeley Property Group et al is "normalising." No surprises that at Foxtons' IMS today things are not as bull'ish as before with settling of markets and not so robust projections. The IMS today really shows the need for a reappraisal of the market, all the news in Foxton's was known, Mortgage applications down, market sales down, softening in the market you can call it.
If you were holding long on Foxton's, you might need to share today's mirror to have a chat with yourself. JP, as noted in emails was very humbling in his "OK you like the simple style and it appears to have worked with Foxtons.' JP a good sport, knows I know he means he was wrong and its an apology and case of red wine to me! Perhaps I shall just redeliver to Leggie, as I have yet to post the one in the box for my Morrisons *(MRW) bet.
Earnings will drop based on demand slowing/dropping (significant potential of stagnation at lower levels), property taxation, political issues for certain price bands, Russian/Chinese lending issues and that excludes the more realistic mortgage lending that should have been in place years ago. Expect rentals to come under pressure in due course as demand slows, supply increases and landlords desire a haircut on the rental commissions.
Tesco's, at least the investigation continues and the new man has kitchen sinked a significant part of the issues. Expect further to come and pricing models to adapt according to location rather than national pricing model (significant challenge there). The every day low price (EDLP) is likely to be more significant for Tesco's than other competitors with greater market share.
Roger's views are validated in so much as previous years have not been impacted by the goings on and as such the market can breathe a sigh of relief to that. Do not expect too much positive coverage until post Christmas. As known shopping is going to be very competitive this year, how NEXT fairs is anyones guess. Premium brands I need to re-evaluate after the Apple figures which surpassed my expectations, these changes and dynamics I need to better grasp the market for...(read as under review). Once I've obtained Roger's permission to share, I'll post his thoughts on Tesco this morning.
The savvy (me) closed my position on Premier Foods (PFD) as the market was pricing in better news than I thought, with today's Interim Management Statement the numbers will certainly do the talking again. (Time for a picture)...
Its not rocket science to consider why the SP has declined so significantly. Sales across the board down, more concerning are the non-branded items down double digits. Positively PFD is working with its suppliers/customers albeit with the structural changes in shopping, this will not stop the disappointment.
The retail/grocery sector will improve post Christmas as Consumers get into routines again. The confusion as Morrisons correctly eluded to does not stay for long as buyers start to understand / have confidence in their choice. These will generally stay for significant periods of time. The last trends were 15 years, it takes awhile for the herd to adjust! Specifically for PFD's the relaunches were required some time ago, food on the go, and healthy 'sweet' options will be key. Isn't that a contradiction? Perhaps some leverage of associated products to do with Great British Bake-Off etc...would assist them. Pre-mixed items labelled with Mr Kiplings? Who knows, just some thoughts. Post the reorganisation and clarity on market PFD make have some sex appeal, until them leave it in the cupboard.
No time for AAL (Anglo American) but nothing that would make anyone change there opinion. CAML (Central Asia Metals) Director Options & Share Sale really needs to be raised at an AGM or vote in respect of the non-alignment of interests. Especially in light of Robert Cathery (& Family)'s sale earlier in the month.
Sadly Ian is no doubt running around the wilds of Indonesia now and won't answer his phone for some ideas on Tullow's (TLW) announcement today. I read it as positive, but I'm not an oiler! Why Rio are not sticking to the plan of change I don't quite know....Rio Tinto extends the tenure of senior executive team. No time also for the Magnolia Petroleum Plc(`Magnolia' or `the Company') Excellent Initial Production at Six Devon Energy Operated Wells in Oklahoma (having promise).
Sadly Ian is no doubt running around the wilds of Indonesia now and won't answer his phone for some ideas on Tullow's (TLW) announcement today. I read it as positive, but I'm not an oiler! Why Rio are not sticking to the plan of change I don't quite know....Rio Tinto extends the tenure of senior executive team. No time also for the Magnolia Petroleum Plc(`Magnolia' or `the Company') Excellent Initial Production at Six Devon Energy Operated Wells in Oklahoma (having promise).
Now my question of the week as tomorrow I depart for a weekend at a stud for debauchery and drink (my first in near 12 weeks) is, when will Victoria Oil & Gas learn stock market values and rules? Would you be consolidating now? VOG share consolidation and final results out today, the latter, nothing special bar the jam. I'm holding in VOG (again) on the basis of the asset performance, not management. I was tempted to inform the management why they should not consolidate yet, but then ...the management clearly haven't done the best for the SP over the years, so what's another issue?
Oil has held well strategically and the denial and ignorance have set in, longmy but ignore (edited 23/10/14) the production increase and the price, we'll just ignore the demand element. Not one party has noticed that the Chinese "national" (read as strategic purchases) are already declining already. Then again why mention the obvious, with the unwinding of a significant position in the red, it'll save them near 84$M. Keep going boys, that's near $4B lost of your nations monies on some dire trading. That's just what I'm aware of...because they'll just refuse to pay up, surely that's never happened!!!!!!
Today's a big day for Dave, he's moving house, only up the road but the saga has finally come to a head with the removals all being done as I type! Best of luck with it Dave and takeaway and beer tonight will assist plus a yellow room for the daughter! Finally, today is a shocker, my technical trading chap has got engaged, the sly dog after near 3 years of "nothing serious" popped the question last night in the company of Ian and Mrs Frenchie whom both of them have been on and off more than my boiler! Ian makes people do strange things but that's near the top of it! All the very best to both of them & Dave + family on the move. May Sarah cope with Hugo making his living in the company of Myself and Ian! Poor you!
Atb Fraser
Oil has held well strategically and the denial and ignorance have set in, long
Today's a big day for Dave, he's moving house, only up the road but the saga has finally come to a head with the removals all being done as I type! Best of luck with it Dave and takeaway and beer tonight will assist plus a yellow room for the daughter! Finally, today is a shocker, my technical trading chap has got engaged, the sly dog after near 3 years of "nothing serious" popped the question last night in the company of Ian and Mrs Frenchie whom both of them have been on and off more than my boiler! Ian makes people do strange things but that's near the top of it! All the very best to both of them & Dave + family on the move. May Sarah cope with Hugo making his living in the company of Myself and Ian! Poor you!
Atb Fraser
Fraser- Hi- I hope you are enjoying gay Paris and providing value for money today :-))
ReplyDeleteRe TSCO- grim as expected, but the accounting issue topped out at just another £13m and apparently recent trading has been encouraging. I like the fact they aren't giving "guidance" as analysts are much too lazy nowadays-- they get most things on a plate or, as you know, cut and paste and then get back to the pub or white powders. I agree that the market in 2015 will stabilise and MRW via its Match and More scheme does appear to cover and match prices with the Aldi and Lidl ranges, according to my own limited analysis here, so they seem to have hit a solution to their immediate problems, as long as they can get customers to trust them to play fair. I might even buy some MRW shares in a month or two, but not the whole company unfortunately :-))
Re VOG- Im long here too but I cant remember a single consolidation that went well, with the share price never increasing by the degree of the consolidation- please let me know if Ive missed one here. In the meantime, the river hasn't been crossed yet and the national power contract is the real transformation deal, for both parties in this case.
Back to watching out for the Horse Hill RNSs that could come out any hour on the hour- we may not be reliant on the North Sea but the weekend if the rampers are right. I would expect Horse Hill petrol stations by the time you get back to Blighty :-))
A votre sante !! The Leggie
Fraser- That's my theory torched- HH appears to have been leaked via Twitter-
ReplyDeletehttps://twitter.com/BrokermanDaniel
Cheers. The Leggie
Hey Leggie, you could explain all the messages today and confirming my earlier statements about leaky ships! Its amazing the companies haven't announced as is their requirement. This was well known "allegedly" earlier this morning...I did not know anything being at the bottom of the food chain until 16:00hrs ish. Lets see the mornings confirmation, it'll be a good day for me either way with no capital exposure but free carry!
DeleteAn excellent day in gay paris, with some really good company to discuss and learn from. I have been obliged with a bottle to deliver to you from JP if I promised to do it in a timely manner so expect the police in your neighbourhood soon:-).
TC F
Fraser- yes- I suppose the HH issue is that they have been correctly coordinating their RNSs so it just takes one of the companies top men to get man flu or toddle off somewhere and they cant issue. Im in via my RGM stake, it wont get the full impact that DOR, Solo or UKOG (the David Lenigas crew) will get but that's fine by me. It may even help them advance the nickel play?
DeleteA bottle from JP!! -hehe- poor sod- will you be keeping his shirt then :-))) I will alert the gamekeeper and try to ensure it doesn't get caught up in any crossfire here. Unless you don't mind them taking pot shots at JP.....
Cheers. The Leggie
It was with hilarity today that I was talking through the rather obvious trades of some presentations I had done for various parties over the past 4 months. We’ve covered Premier Foods, Tesco/Morrisons Oil (Bowleven) and Foxtons (will maybe come back to a full list in due course).
ReplyDeleteFOXT being one that JP, to his credit and in discussion today actually reduced their positions on based on an "amateur" presentation on with 14 reasons to be short Foxtons. With credit to JP he may not like what was said, or his colleagues for that matter but they at least took the sensible element of taking considerable skin out the game. A credit to JP with his full phone call and email showing a man with a significant level of "new understanding" about longs and shorts. A long only chap that’s slowly learning denial and ignorance don’t always reward…Please correct me if I’m wrong there JP. Expect a bottle to zoom through your window soon Leggie, I'll perhaps keep the one I purchases:-)!. Having since been nicknamed the short destroyer by their office, I’m not sure what part is short…
What was totally obvious today was the lack of Chinese support for the Oil price today, as noted ONLY by myself as it appears traders are absent of anything sensible nowadays. A quick, but expensive call from Li (apparently new EE accounts have a credit limit of £150 or thereabouts) is that the Chinese losses have been taken over the past few days which would explain the technical and fundamental bounces working in unison (credit availability is being significantly impacted). I’m not quite sure how long these types of losses can continue for, blankity blank!
Once I have chance, I’m hoping to catch up with Duncan and cover his commentary on retail. He’s certainly far from an on the fence guy, with a vehement belief in buy Tesco’s. Obviously there’s more to it than that, but the Brokerage should be given the credit its due. Perhaps more on that at a later date.
Finally, having had the seat time to catch up with quite a few AOB items, the Atlas Iron update was unexpected bullish last night…
http://www.atlasiron.com.au/IRM/Company/ShowPage.aspx/PDFs/5405-10000000/Sept14QuarterlyActivitiesReport
Atlas Iron Limited (ASX: AGO) is pleased to advise that it has significantly reduced costs across its operations during the September 2014 Quarter, achieving an all-in cash cost* of A$68.90/wmt CFR (previously $75/wmt) and a C1 cash cost of A$48.10 (previously A$51/wmt). Its worth reading through, you don’t need to be a wizard to see the problems post period with Atlas and their costs as their “realised” prices against the market don’t bode well. This company is still on the bank and these costs have to come down significantly to consider survival.
In my role to educate the masses, the CFR (Cost and Freight) may actually be beneficial in the next quarter as costs (oil) will have reduced. Atlas ship to China around 4K miles away, any reduction is likely to improve their margins. On the flip side, Rio/BLT will be able to discount further…Good luck Atlas you’ll need it. CAPEX down, costs down, the question is are Atlas’s cost able to go lower and be sustainable. All in cash costs of $69’s ozzie…needs to be significantly lower, 55$ would be a positive safety net.
http://www.brrmedia.com/event/127903?embed=true&width=&header=&unique_ts=1414090068
Worth a listen especially wider markets, including Indian
Atb Fraser
Fraser- thanks for that- just reading the HH update and the 20mb find is very disingenuous as they haven't even drill through the lower Portland level that they believe holds 16.8mb and is to the south, so another drill need there and just 3.1mb "found" so far. I wonder how many will have read this right. Could sell a few RGM shortly :-))
ReplyDeleteCheers. The Leggie