Cyclically Adjusted Price / Earnings – CAPE

Here is a good article explaining CAPE. CAPE is basically a way of telling how reasonably priced the whole market is. At the top of a bubble CAPE will be high, and in a slump, low.

If this was boiled down to one lesson it would mean to take caution when CAPE is high, be greedy when others are fearful ie when CAPE is low. This is because historically CAPE returns to its long run average.

http://www.ukvalueinvestor.com/2013/01/an-alternative-to-stock-market-forecasts.html/

UK Value Investor is a great site for those wishing to beat the market investing in large FTSE companies but with little effort. I think there might be a small subscription charge but Johns Kingham’s methods are pure common sense.

Wanna buy a tenner for a fiver? SIGNET GLOBAL FIXED INCOME STRATEGIES – SIGG

I bought some SIGG on Friday after seeing a tweet about it. I’m writing this up quick so i’m vague on the details but go look for yourself. They are a closed fund that hasn’t done too well since it started several years ago. The share price has drifted and now stands a whole lot lower than the NAV. The NAV is 92p or thereabouts and the price to buy is about 55p. Ok so this disconnect between NAV and SP might continue forever…. but we have a potential catalyst.

They announced last year that they were wrapping up and liquidating the fund!! Great news for shareholders. The only catch is it will take a while. Around 35% is planned to be liquidated over 2013 and beyond that timescales are not known. Still there could be a cash return soon and this could spark interest and a narrowing of the SP and NAV.

Limited downside and lots of upside!!

GKP purchase

I’ve added to my Gulf Keystone Petroleum position. Price is travelling upwards over the last few day and i dont see that stopping for now. A lot of short positions are open on this company so i think a bit of a short squeeze will mean the price keeps rising. I think a bit of attention in the newspapers etc over the weekend could help too.

This is my largest portfolio position at present.

Profiting from spin offs oppurtunity ala Joel Greenblatt. ALNT and CKSN

I’ve just finished the chapter in Joel Greenblatts book on Spin-offs and how the canny private investor can profit from them. I did a quick google for ”spin off lse” today and noticed the Cookson group has very recently split into two new companies – Vesuvius and Alent. One is to do with steel, the other ceramics/chemicals i believe. A cursory glance is all i’ve given to this situation to see if Joel’s principles could apply in this spin off situation. The answer is that they do not. Both new companies have large market caps and so are accessible to an institutional investor. This eliminates the small investor advantge.

That’s not to say that either company may not be a good investment on its own merit, but that the opportunity inherent from a specific type of spin off can not be found here on account of the large market caps of both new companies. Never mind, at least i’m putting my new analytical skills into practice.

 

Who’d have thought beer might prove a ‘less bad’ investment

This made me chuckle, which from below would prove a most profitable investment since a year and a half ago:

  • Delta Airlines
  •  AIG insurance company
  • Lehman Brothers
  • Northern Rock
  • Buying and drinking beer

http://www.ukmoneypot.co.uk/lessons-in-investing.htm

Review of recent trades

I’ve been busy starting a new job recently so not had time to blog often but I wanted to do a little round up of recent trades as I’ve been quite successful J

I bought more PVCS as outlined previously. These have seen a decent little rise but im holding tight as I expect more to come.

NTOG bought on a twitter tip has risen 6% and I’m still waiting on the news due soon about two other wells which if positive could spark a big gain.

CAPD has been the star performer and my best ever return. Up 60% (!!!) since buying on Centamins Egyptian problems where it dropped an inexplicable 40%. Centamin has things running again in Egypt and predictably CAPD has recovered well. It is still undervalued by many measures so im continuing to hold. Credit goes to WShak the motley fool boards heavy weight who drew my attention to this one.

My other held shares in GKP have continued to drift downwards, I hope to buy more soon because the court case looks weak and ceteris parabus these will jump on the court case result.

Carpetright continues to defy all known market efficiency theories. Its worth a fraction of its current value. This is undeniable. Recent poor results haven’t knocked it though so im still holding on for the day they fall through the floor…  I might be old and grey first.

Frontier Mining FML – is trickling down unendingly. Poor sentiment about this company and lack of news + mine shut down for the winter have left this drifting. I do believe when production restarts q2 next year these will be higher. Im also thinking of adding more at these prices but I think it will drift lower yet.

A good day!

Not often i see this, just the one share letting me down today 🙂

CORRECTION: Carpetright is a short so not so good there – anyway, 7/9 is good enough for me.

http://share-bear.co.uk/wp-content/uploads/2012/12/day-change-happy.png

 

 

Detailed summary of PV Crystalox Solar PVCS – Reiterate BUY

Ok, for those that haven’t heard of PV Crystalox (PVCS) already, here is my summary and the reasons I am invested. I read it as a great opportunity to double your money in 6-9 months.

BRIEF summary: Cash rich company preparing radical restructure and cash return to shareholders 2Q2013.

All figures in Euros.

Background: They are a manufacturer of multicrystalline silicon ingots and wafers. Business took a huge nose dive after cheap Chinese exports flooded the market. Prices fell. Over the last year they cut production, tightened their belts and planned to weather the storm, limping along until global prices picked up in the medium to long term. Share price diving all the while.

Results for 6 months ended 30th June showed….

  • Net assets (majority tangeable) just under 200m
  • Of which 122m euros is cash! (mostly won in court settlement from customer contract cut short).
  • Tiny Pension surplus
  • 32.6m 1H2012 sales,
  • 12.2m EBIT loss on 61mw shipments,(full yr shpments expected to be 100-120mw)

There are another 2 on-going claims but one defendant probably unlikely to pay. I do not know the size of these claims or what payout they could be. From the RNS:

“We have been unable to reach a satisfactory agreement with two long-term contract customers who have been amongst the industry leaders in recent years and we are seeking resolution under the jurisdiction of the International Court of Arbitration. While successful judgements in the Group’s favour are anticipated there is increasing uncertainty as to whether one of these companies will have the financial resources to fully settle its claim.”

They repeated “make the necessary decisions during the remainder of the year to serve the best interests of shareholders.”

19th November Management Statement marks a change in tone from management – importantly they mention return of cash.

“The Group has a strong net cash balance and the Board is continuing to reorganise the Group, to enable the return of cash to shareholders. The Board expects to make a further announcement before the year end.”

Reduced full year volumes expected 100-105mw

And then bingo!

13th December Trading Statement http://www.pvcrystalox.com/scripts/php/rns_viewer.php?id=20563710

“The Board has now completed a strategic review of the business which has taken account of these adverse market conditions and the Group’s significant net cash balance. The outcome of this review is that the Group will carry out a radical restructuring while retaining its core production capabilities and returning excess cash to shareholders.”

“The Group intends to adjust its operations to align with anticipated sustainable short term market demand so that the ongoing business will be broadly cash neutral in 2013.”

“The Group expects to return cash to shareholders during Q2 2013 in a manner that will provide shareholders with an element of choice as to the form in which they receive the cash. Further details on the process will be announced in due course.”

So if we take a guestimate loss for second half 2012 of 20m this leaves cash of around 100m euros at year end. Company planning to be cash neutral in 2013 which I’m guessing means they won’t be burning cash and so will have much reduced need for a cash cushion. They intend to close one German factory and reduce yet further UK and German production. If we say money raised from factory closure/asset sales matches restructuring costs then we still have 100m cash, a company with around 80m net non cash assets and a current market cap of £40m at 9.5p (about 50m euros mkt cap and 11.7 cents – at £0.81/euro)

So we have twice the current share price in cash and once again in tangible assets. They could give away half their cash and you would still be holding the shares and business/assets for free. The remaining court cases could provide an added bonus.

The question remains of course just how much cash they give away but management has certainly changed strategy and language from ‘conserve’ to ‘return’ cash. I’m invested here but would like to hear from others before I plough more in.

 

Shaun

Capital Drilling – CAPD – BUY

I’ve bought some capital drilling this morning after Centamin CEY suspended operatinos in Egypt. CAPD do provide services to CEY but they also have many other customers. The drop of 40% seems well overdone. Admittedly this is only a quick glance but the company seems profitable, has varied customers and i expect some sot of share price recovery sooner rather than later. Additionally we do not know the cost, if any from suspended work for CEY in Egypt. My guess would be that CEY will still have to pay some sort of fees to CAPD.

In at 16.19p

Remember these are all personal best guesses with my own money. Hopefully this website will show how profitable investing has been for me. But of course it might just show the opposite :-/

PVCS – PV Crystalox Solar – BUY!

Statement out today that indeed they plan to return cash to shareholders.

Restructuring, job losses, planning to be cash neutral next year all make me bullish about significant cash return. I have topped up on the fall, which i am very surprised about. Investors taking profits and knee jerk reactions to the loss for the year which is farily unimportant. This is a cash and assets play, ideally for shareholders the company would cease trading and liquidate.

http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11427622