A further bit regarding TUNE. It is quite interesting because when you look at current assest and liabilities. last year the difference was £7m to the bad, this year they are £7m to the good so a £14m swing. I suspect current forward orders are stronger than they are letting on at this point and notice they didn't guide.
Next update in Jan, 4.5 months into H1.
The big drag has been inventories which now seem to have been falling. They will take time to clear still but meanwhile they have been introducing new products, 26 of them I think, which have no inventory build up as such and can be sold, boosting revs and profits while those old inventories sell down.
Getting those inventories down is key to many electronics cos but creating new products that sell helps a lot. While inventories have fallen there has also been a small build from new products so the old product inventories must have fallen even more.
Pre Covid, in 2019 they had circa £20m inventories for around £85m sales. They now have £47m inventories for £158m sales, down from the £55m last year. I think it would be reasonable to assume that pace of decline in inventories could be maintained or increased this year which would have them down to a level below £40m this year which would be much more like the pre-pandemic norm in comparison to sales.
They will be 4.5 months into the new financial year at their Jan t/s .
That's just my view why I think they may have bottomed and of course share prices always start to rise 6-9months ahead of the news as we know so it may not be obvious by what you can see today but may have been obvious when one looks back with hindsight in a year.
This is why you have to have a certain amount of faith with recoveries.
Obviously these are just my fag packet musings and don't take my word for it, do your research, I am way off being accountancy grade, more muppet class.
I think that's the essence of bear and bull markets - in bull markets there are lots of things you want to invest heavily in but you pay a lot more for them. In bear markets you are taking more risk in a sense but the shares are much cheaper usually.
I think finding stocks you'd like to be owning in a bull market that are currently beaten up isn't a bad idea, as long as you believe the bottom may be in.
IGR is one that I think looks worthy, based on their net cash position and what they look like they could potentially do eps wise and a 5.6% yield for next year.
AVON might be another with increasing unrest and with the £ falling v the $ then that should bolster their earnings in £s slightly. They have the added spice that they are most likely to get taken over by a bigger defence company at some point.
I think after a few more co reports over the Jan period the bargains will show themselves a lot more.
Yep, the builders have gallons of tea and coffee, biscuits, cakes, hot sausage rolls and Bacon Rolls on Fridays - think I might need to start shopping at Lidl rather than M&S :-)
I have LUCE on my watchlist but Hornby leaves a lot to be desired. The recent bit about splitting holdings so larger shareholders could buy more - where was the buying then. I've been in them a number of times, I first bought after they crashed from his selling then warning so I know his history.
I think the real thing is these inventories with customers and at the company need to clear. It's going to happen at some point and the sales could whipsaw into a nice increasing curve for some time with many electronics type co's. Hence I really like TUNE because as we go through the year I think the inventories get eaten up and it's best to be in before rather than climb on, so electrical co's and the like are one I'm going to be keeping a close eye on.
XPS - I have watched that great chart sail away but I really don't understand all these financials, the regulation, competition, how they make all their money and whether it's straight forward or complicated. In the end, simple co's are simple especially if they buy stuff or make stuff and sell it. I try to focus on them - simple stocks for't simple folk like :-)
There seems to be waves of 6-8 weeks when the stock rallies so I suspect you are right and it will likely rally again in 10-14 days or so if that repeats imo
the 50 day isn't something I use for sells. I basically look at the left hand side of the charts and sell if the right side clearly looks like it has failed. Nothing that scientific, it depends how fast the share is falling and how deep. A feel basically, rather than any set formula.
Some will go wrong, I know that and accept it, I just move on and as long as the vast majority come good you are winning.
Many thanks Rebel and I hope the building work is progressing nicely. Regular teas and coffees with the occasional bacon roll does wonders for the crew's morale! It's amazing how many little extras they will do without charging!
I'm a big fan of following good CEO's, i.e MKS, W7L. FCH and hopefully CAR etc, although not a big fan of Luceco anymore. I used to be until they sold shares before big falls in the price. However, what does the chart say about a potential recovery trade from here? I have bought some as a trade.
Do you also have any thoughts on XPS. I don't think this is your normal sector but recently delivered good results and have done particularly well over the last 2 years with possibly more to come?
In this period I see several potentially interesting ideas, but I cannot find any idea where I really want to invest substantially. If you can share, do you have any "top idea" or any holding where you still see substantial upside?
Thanks as always Richard. It’s great to appreciate your analysis of possible share opportunities. Judging from Lee Wild’s theory about Winter trading tending to be stronger than Summer’s, it could be that we are in for a seasonal climb in share prices across the board subject to the usual pull-back perhaps before take-off.
Thanks Richard for all your posts , it’s my go to with my we end reviews of all media and stocks. I have a question for you if you could kindly answer. if or when a stock fails the bowl is you sell a drop below the 50ma ?
In my uneducated way does it look like the 50 day moving average for GYM has support at the current level and maybe a good time to buy? Or are the 100 or 200 day averages more accurate indicators?
A further bit regarding TUNE. It is quite interesting because when you look at current assest and liabilities. last year the difference was £7m to the bad, this year they are £7m to the good so a £14m swing. I suspect current forward orders are stronger than they are letting on at this point and notice they didn't guide.
Next update in Jan, 4.5 months into H1.
The big drag has been inventories which now seem to have been falling. They will take time to clear still but meanwhile they have been introducing new products, 26 of them I think, which have no inventory build up as such and can be sold, boosting revs and profits while those old inventories sell down.
Getting those inventories down is key to many electronics cos but creating new products that sell helps a lot. While inventories have fallen there has also been a small build from new products so the old product inventories must have fallen even more.
Pre Covid, in 2019 they had circa £20m inventories for around £85m sales. They now have £47m inventories for £158m sales, down from the £55m last year. I think it would be reasonable to assume that pace of decline in inventories could be maintained or increased this year which would have them down to a level below £40m this year which would be much more like the pre-pandemic norm in comparison to sales.
They will be 4.5 months into the new financial year at their Jan t/s .
That's just my view why I think they may have bottomed and of course share prices always start to rise 6-9months ahead of the news as we know so it may not be obvious by what you can see today but may have been obvious when one looks back with hindsight in a year.
This is why you have to have a certain amount of faith with recoveries.
Obviously these are just my fag packet musings and don't take my word for it, do your research, I am way off being accountancy grade, more muppet class.
Hi Forsi
I think that's the essence of bear and bull markets - in bull markets there are lots of things you want to invest heavily in but you pay a lot more for them. In bear markets you are taking more risk in a sense but the shares are much cheaper usually.
I think finding stocks you'd like to be owning in a bull market that are currently beaten up isn't a bad idea, as long as you believe the bottom may be in.
IGR is one that I think looks worthy, based on their net cash position and what they look like they could potentially do eps wise and a 5.6% yield for next year.
AVON might be another with increasing unrest and with the £ falling v the $ then that should bolster their earnings in £s slightly. They have the added spice that they are most likely to get taken over by a bigger defence company at some point.
I think after a few more co reports over the Jan period the bargains will show themselves a lot more.
Hi Stephen
Yep, the builders have gallons of tea and coffee, biscuits, cakes, hot sausage rolls and Bacon Rolls on Fridays - think I might need to start shopping at Lidl rather than M&S :-)
I have LUCE on my watchlist but Hornby leaves a lot to be desired. The recent bit about splitting holdings so larger shareholders could buy more - where was the buying then. I've been in them a number of times, I first bought after they crashed from his selling then warning so I know his history.
I think the real thing is these inventories with customers and at the company need to clear. It's going to happen at some point and the sales could whipsaw into a nice increasing curve for some time with many electronics type co's. Hence I really like TUNE because as we go through the year I think the inventories get eaten up and it's best to be in before rather than climb on, so electrical co's and the like are one I'm going to be keeping a close eye on.
XPS - I have watched that great chart sail away but I really don't understand all these financials, the regulation, competition, how they make all their money and whether it's straight forward or complicated. In the end, simple co's are simple especially if they buy stuff or make stuff and sell it. I try to focus on them - simple stocks for't simple folk like :-)
Cheers
Thanks
Hi Stephen
There seems to be waves of 6-8 weeks when the stock rallies so I suspect you are right and it will likely rally again in 10-14 days or so if that repeats imo
Have removed the value metric on TUNE as it was incorrect, apologies.
yep, November to March always seems far stronger imo. Makes sens too as moany investor and traders are on holiday in the summer.
Cheers
Hi Gary,
the 50 day isn't something I use for sells. I basically look at the left hand side of the charts and sell if the right side clearly looks like it has failed. Nothing that scientific, it depends how fast the share is falling and how deep. A feel basically, rather than any set formula.
Some will go wrong, I know that and accept it, I just move on and as long as the vast majority come good you are winning.
Hope that helps
Many thanks Rebel and I hope the building work is progressing nicely. Regular teas and coffees with the occasional bacon roll does wonders for the crew's morale! It's amazing how many little extras they will do without charging!
I'm a big fan of following good CEO's, i.e MKS, W7L. FCH and hopefully CAR etc, although not a big fan of Luceco anymore. I used to be until they sold shares before big falls in the price. However, what does the chart say about a potential recovery trade from here? I have bought some as a trade.
Do you also have any thoughts on XPS. I don't think this is your normal sector but recently delivered good results and have done particularly well over the last 2 years with possibly more to come?
Richard,
Thank you for the good update as always.
In this period I see several potentially interesting ideas, but I cannot find any idea where I really want to invest substantially. If you can share, do you have any "top idea" or any holding where you still see substantial upside?
Thanks as always Richard. It’s great to appreciate your analysis of possible share opportunities. Judging from Lee Wild’s theory about Winter trading tending to be stronger than Summer’s, it could be that we are in for a seasonal climb in share prices across the board subject to the usual pull-back perhaps before take-off.
Thanks Richard for all your posts , it’s my go to with my we end reviews of all media and stocks. I have a question for you if you could kindly answer. if or when a stock fails the bowl is you sell a drop below the 50ma ?
appreciate in advance if you reply.
Richard
In my uneducated way does it look like the 50 day moving average for GYM has support at the current level and maybe a good time to buy? Or are the 100 or 200 day averages more accurate indicators?