Monday 2 December 2013

Morrison (MRW) ... supermarket sweep

Monday 2nd December 2013

Courtesy of my friends at Cantor, I've managed to pocket a few December 260 Calls in Morrison (MRW, mkt cap £6bn) at 4p. Tesco's has its Q3 IMS due this Wednesday 4th, which may set the scene in the run up to the Call's December 20th expiration. In the meantime, MRW is majorly oversold and has typically bounced around 7% following the last seven occasions into RSI territory down here. Further, at 259p/shr, it's nudged below what has been a rising channel since February last; this may prove a bear trap. The next few days will likely decide if I'm off my trolley, but at 4p per December 260 Call, or a cost of 1.5% (4/259), I find this a risk worth taking. An unexpected bounce could prompt a 3-5x return and a jolly nice Christmas. 

MRW - oversold, bear trap in a rising channel?
Disclaimer: The information, discussions or topics referred to on this blog should in no way be considered “advice” to buy or sell anything. The information which may be referred to is freely available in the public domain and where required the source of information is referenced to for verification. While every effort has been made to ensure the veracity of any information contained within this blog, the author accepts no responsibility for the accuracy of any information contained within this blog or for the sources of information which may be referred to. Readers are responsible for their own actions and interpretation of the information contained within this blog. 

Tuesday 26 November 2013

Market ... danger ahead?

Tuesday 26th November 2013

The charts below have turned me bearish. So I've shorted the major US indices.
 
Valuations close to decade highs
S&P forward P/E approaching 10 year highs
Source: Bloomberg

 Investor sentiment turning down
AAII US Investor Sentiment Bull to Bear ratio compared to S&P
Source: Bloomberg

 Pitiful volume throughout the latest bull market and getting worse
Prior bull markets and associated volume
Source: Bloomberg

 VIX index at lows - is the market complacent?
VIX Index at lows
Source: Bloomberg

 AUDUSD decoupled
AUDUSD compared to S&P - decoupled
Source: Bloomberg

 What is going on in China???
Chinese BBB 5 Year Corp Credit Yield
Source: Bloomberg

 World GDP forecasts cratering while market at all-time highs
World GDP consensus forecasts, %YOY compared to S&P
Source: Bloomberg
Disclaimer: The information, discussions or topics referred to on this blog should in no way be considered “advice” to buy or sell anything. The information which may be referred to is freely available in the public domain and where required the source of information is referenced to for verification. While every effort has been made to ensure the veracity of any information contained within this blog, the author accepts no responsibility for the accuracy of any information contained within this blog or for the sources of information which may be referred to. Readers are responsible for their own actions and interpretation of the information contained within this blog. 

Wednesday 13 November 2013

Avanti (AVN) ... 13 questions for the AGM

Wednesday 13th November 2013

Avanti’s AGM is scheduled for tomorrow at 9am. Only those that can prove they are shareholders are invited. As I am short shares in Avanti, I would not be welcome. However, were any shareholders intending to pitch-up, then here are a few questions I reckon it would be helpful to receive answers to:

************************
The group announced on 27th September 2013, that it had signed a Memorandum of Understanding (MoU) with the European Space Agency (ESA) to acquire the Artemis satellite for a nominal sum. Avanti suggests that the satellite “... has a minimum of a further three years of useful life, occupies an orbital position at 21.5 East and gives the Company access to new opportunities.”

Within the group’s Bond prospectus, it highlights that “We estimate that Artemis has a potential revenue-generating capacity of up to £6.0 million per annum, which we believe (to) [sic] be sufficient to offset the operating costs to be assumed on acquisition of the satellite and could potentially generate a profit.”

  • Does this mean that Artemis is going to cost £6.0m per annum to operate and therefore that Avanti has to find revenues to cover that?
  • How much of the revenues for Artemis have already been signed up?

************************

On 10th July 2013, the revenue guidance miss of c. £10m for 2013 year end was mentioned to be attributable to “... several major contracts in Africa that were expected to close before 30 June 2013 but which are now expected to be completed in the next financial year.” 

Further “At the same time, since the period end, the revenue due from a contract which was signed during the financial year is no longer assured.”

  • Have the delayed contracts now been signed?
  • Is the revenue due from the highlighted contract still no longer assured? 
  • Who was that contract with?

************************

Within the group’s 2013 interim announcement to 31st December 2012 (released 12th February 2013), Avanti indicated that “... we have over £40 million of revenue already in backlog for the year to June 2014 with another 18 months of selling still to go, so visibility of future performance is strengthening.”

However, four months later, in the group’s year end trading update to June (released 10th July 2013), the backlog for 2014 was reported to be £42m. 

  • Does that mean that an additional £2m of bandwidth was sold during the period December (or possibly February) to June? 
  • Does this £42m include any (or all) of the £10m of the revenue miss which was delayed from inclusion in the 2013 revenue tally?

The £42m was also reiterated in September. 
  • What is the current backlog revenue figure for 2014?

************************

  • On the basis of the worsening bad debt provision from 2013, will there be a similar provisioning commensurate with the expected £49m of consensus revenue for 2014?

************************

From the 2013 accounts, it appears as though the cash interest on borrowings was below 3%. A total of £5.5m cash interest was paid on £14.9m in current bank loans and £185.9m in non-current bank loans (£200.8m total); or 2.75% cash interest. As highlighted in note 22 of the 2013 accounts, the prior financing agreement with US Exim bank and COFACE was for a total permitted draw-down of $328.2m (c. £205m) at an interest rate of 5.5%. I presume the other 2.75% of interest that was not paid in cash was capitalised.

  • Why did the company raise new debt at an interest rate (the new bonds carry interest at 10% per annum) of more than 3x the current existing cash rate? 

This will presumably cost shareholders over £15m of additional interest in the first year and present an even larger gap in the future on the basis that the debt under the old facility would have been paid down.

************************

The Bond prospectus mentions that Avanti “... will have the right to place a new satellite in the same position [as Artemis] within three years of Artemis being de-orbited, ...” 

  • If the group does not launch a satellite within this period from de-orbit, is the slot lost? 
  • With the long lead time to construct and launch a satellite, will this require raising more finance as it would not appear that financing could be paid for out of prospective cash flow? 
  • As the operational costs whilst in orbit are suggested to be c. £6m per annum, does this include the cost of de-orbit and if not is it material?
************************

Any answers would be welcomed. Thanks. Matt



Disclaimer: The information, discussions or topics referred to on this blog should in no way be considered “advice” to buy or sell anything. The information which may be referred to is freely available in the public domain and where required the source of information is referenced to for verification. While every effort has been made to ensure the veracity of any information contained within this blog, the author accepts no responsibility for the accuracy of any information contained within this blog or for the sources of information which may be referred to. Readers are responsible for their own actions and interpretation of the information contained within this blog.

Thursday 31 October 2013

Serco (SRP) ... not much PECS appeal

Thursday 31st October 2013

I sold short in Serco (SRP, mkt cap £2.8bn) at 556p/shr.

A few months back, Serco got into trouble with the Ministry of Justice (MoJ) for “... recording prisonersas having been delivered ready for court when in fact they were not. This was a principal performance measure for the £40.7m per annum Prisoner Escorting and Custodial Services (PECS) contract. The MoJ are now investigating what may have been fraudulent behaviour.

Unsurprisingly, Serco agreed to a repayment of the profit earned since the contract was renewed in 2011. What is surprising is that this was estimated to be c. £2m. This contract was renewed in March 2011, suggesting that the c. £2m in profit had been drawn over 29 months. This suggests that even using what may have been a fraudulent means of delivery, that the group only achieved a c. 2% margin on the contract. 2%!!! Gawd knows what it would've been in the absence of irregular interference.

Friday last, Serco’s CEO, Mr Christopher Hyman, walked.

Now the American’s are starting to get uneasy. Negative press coverage in the US is on the up. Around 15% of Serco’s sales are attributable to the Americas. Its most recent contract win centres on the high profile Obamacare programme and is worth c. $115m per annum.

With:
  1. The MoJ investigation unlikely to conclude until the end of November,
  2. The police on the scene,
  3. Indications of paltry margins with or without irregularities,
  4. The CEO departed,
  5. And now the Americans getting upset over “schmoozing”. 
I reckon you’d have to be bonkers to be buying Serco right now. Hence I sold short.

And another thing ...

Technically it looks like the share price has hit resistance in the recent down channel. 


Serco share price
Source: Bloomberg
Disclaimer: The information, discussions or topics referred to on this blog should in no way be considered “advice” to buy or sell anything. The information which may be referred to is freely available in the public domain and where required the source of information is referenced to for verification. While every effort has been made to ensure the veracity of any information contained within this blog, the author accepts no responsibility for the accuracy of any information contained within this blog or for the sources of information which may be referred to. Readers are responsible for their own actions and interpretation of the information contained within this blog. 

Tuesday 29 October 2013

Globo (GBO) ... the very low down on downloads

Tuesday 29th October 2013

Some readers have taken issue with my use of Aruba Networks as a peer to Globo in my prior post, within the Enterprise Mobility/BYOD market. Good Technology, MobileIron and AirWatch have been proffered as more appropriate comparators. All three are owned by a range of private equity firms. As such, it is difficult to get any financial information on each company’s performance and standing within the Enterprise Mobility market.

However, ...

As you'd expect, each company (including Globo) has a downloadable app. So I thought it instructive to see if it's possible to work out how many times each app has been downloaded and what the users have to say. Cue Google search “How can I tell how many times an app has been downloaded?” I was pointed to this website: xyo.net

xyo.net is a very helpful website. It indicates how many times an app has been downloaded onto an iPhone, iPad, or Android based platform. So I searched for:

Globo’s EM product, GO!Enterprise;
Good Technology’s EM product, Good for Enterprise;
MobileIron’s EM product, MobileIron Mobile@Work;
Airwatch’s EM product, Airwatch MDM Agent. 

Here is the first search for Globo's GO!Enterprise ...

Searching for downloading of GO!Enterprise onto iPhone
Source: xyo.net
According to xyo.net, Globo's GO!Enterprise app has been downloaded c. 1,300 times as an iPhone app. There will be a margin of error, which is possibly up to 10%. 

This is the result for Good Technology's Good for Enterprise app onto iPhone ...

Searching for downloading of Good for Enterprise onto iPhone
Source: xyo.net
Good Technology's app has been downloaded c. 676,000 times onto an iPhone. 

Another noteworthy feature of these results is that while Good Technology's app gets a rather paltry rating of 3.1/10.0, Globo's app doesn't even get a rating.

The charts and table below highlight how many times each app has been downloaded (according to xyo.net) across iPhone, iPad and Android based systems. Globo's GO!Enterprise results are so small in comparison that they are not visible in the charts, so I have included a table. 

Reported number of downloads to iPhone, iPad and Android, 000's
Source: xyo.net
Total reported number of downloads, 000's
Source: xyo.net
Total reported number of downloads, 000's
Source: xyo.net
According to slide 38 of Globo's recent investor presentation, AirWatch has "an implied market value of over $1bn." 

Globo peers
Source: Proactiveinvestors.co.uk - Globo investor presentation
With AirWatch's MDM Agent app being downloaded c. 325,000 times, that would work out to be a valuation based on c. $3,077 per download. Similarly, as it is currently capitalised at £213m (c. $342m), Globo's valuation would work out to be c. $46,849 per download, or 15x greater than that of AirWatch's.

Disclaimer: The information, discussions or topics referred to on this blog should in no way be considered “advice” to buy or sell anything. The information which may be referred to is freely available in the public domain and where required the source of information is referenced to for verification. While every effort has been made to ensure the veracity of any information contained within this blog, the author accepts no responsibility for the accuracy of any information contained within this blog or for the sources of information which may be referred to. Readers are responsible for their own actions and interpretation of the information contained within this blog. 

Monday 28 October 2013

Globo (GBO) ... wake up and smell the houmous

Monday 28th October 2013

Globo is a £252m market cap company, quoted on the UK’s AIM market. The group describes itself here as “an international leader and technology innovator delivering multi-platform Enterprise Mobility Management and Telecom software solutions.” It has won a raft of awards for its financial performance and innovative technology. Its share price reached an all-time high in early October.

I reckon Globo employs extremely aggressive accounting.

I will attempt to highlight why its accounting could be considered aggressive, through comparison to a peer. I will also attempt to highlight other aspects to the accounts which should make any reader’s jaw drop.

What does Globo do? ...   

Globo has two main product offerings; Enterprise Mobility (GO!Enterprise) and Consumer mobility (CitronGO!).

The Enterprise Mobility products allow for employers to manage users, content, security etc with regards to access to its data. For employees it allows access to their corporate email, calendar, tasks, notes, customer relationship management data etc, through their own mobile device; Bring Your Own Device (BYOD).

The Consumer Mobility products provide the ability to access smart phone services on feature phones (the more moderately priced alternative to smart phones but obviously lacking the smart phone capabilities). The target customer is aged between 17-30, has email, has a feature phone but wishes to access social networking sites, such as Facebook, Twitter, YouTube, which are available on smart phones. I’m 34 years old. I know plenty of people in their twenties. Not one of them has a feature phone. Come to think of it, I don’t know anyone with a feature phone. That aside, the target market also encompasses the developing world, where topography and economic factors impacts the preponderance of feature phones. Developing markets are therefore a principal demand driver for CitronGO!

Strong record of growth ...

Since 2007, Globo has reported remarkable growth. Its last annual report shows continuing 2012 revenues of €46.0m, gross profit of €24.1m, and PBT of €17.2m. It has a gross profit margin of 52%, an EBIDTA margin of 48%, and a PBT margin of 37%.

Globo 2011 & 2012 P&L
Source: 2012 Annual Report

How does this compare? ...

By comparison, the US-listed provider of enterprise mobility solutions, Aruba Networks (ARUN US, mkt cap $2.0bn), had FY 2013 revenues of $600m, with a 71% gross profit margin, a 2% EBITDA margin, and was loss making to the tune of $10m at the PBT level. Coincidentally, each company's revenue growth has been practically the same since 2009 (I have included Globo's discontinued operations in this, i.e. including Globo Technologies - see further below). They're in the same field. Their revenues grow at the same pace. Aruba seems like a good comparator

Here are some charts illustrating how Globo compares to Aruba ...

Globo revenue growth compared to Aruba Networks revenue growth
Source: Globo Annual Reports, Aruba 10-Ks, Bloomberg,
2013 Aruba actual (Jul yr-end), 2013E Globo consensus
Globo gross profit margin compared to Aruba Networks gross profit margin
Source: Globo Annual Reports, Aruba 10-Ks, Bloomberg,
2013 Aruba actual (Jul yr-end)
Globo EBITDA margin compared to Aruba Networks EBITDA margin
Source: Globo Annual Reports, Aruba 10-Ks, Bloomberg,
2013 Aruba actual (Jul yr-end), 2013E Globo consensus
Globo revenue compared to Aruba Networks revenue
Source: Globo Annual Reports, Aruba 10-Ks, Bloomberg,
2013 Aruba actual (Jul yr-end), 2013E Globo consensus
Globo EBITDA compared to Aruba Networks EBITDA
Source: Globo Annual Reports, Aruba 10-Ks, Bloomberg,
2013 Aruba actual (Jul yr-end), 2013E Globo consensus
Globo cumulative revenue compared to Aruba Networks cumulative revenue
Source: Globo Annual Reports, Aruba 10-Ks,
Aruba (Jul yr-end), Globo (Dec yr-end)
Globo cumulative EBITDA compared to Aruba Networks cumulative EBITDA
Source: Globo Annual Reports, Aruba 10-Ks,
Aruba (Jul yr-end), Globo (Dec yr-end)
Globo cumulative operating cash flow compared
to Aruba Networks cumulative operating cash flow
Source: Globo Annual Reports, Aruba 10-Ks,
Aruba (Jul yr-end), Globo (Dec yr-end)
Globo net capex as % of sales compared
to Aruba Networks net capex as % of sales
Source: Globo Annual Reports, Aruba 10-Ks,
Aruba (Jul yr-end), Globo (Dec yr-end)
Globo cumulative net capex compared
to Aruba Networks cumulative net capex
Source: Globo Annual Reports, Aruba 10-Ks,
Aruba (Jul yr-end), Globo (Dec yr-end)
Globo cumulative net borrowings and share issue
compared to Aruba Networks cumulative net borrowings and share issue
Source: Globo Annual Reports, Aruba 10-Ks,
Aruba (Jul yr-end), Globo (Dec yr-end)
Source: Globo Annual Reports, Aruba 10-Ks,
Aruba (Jul yr-end), Globo (Dec yr-end),
Operating and net capex to 2012,
net proceeds includes Aruba actual and Globo consensus 2013,
$ values translated to €'s at 1.38
Globo and Aruba's trade receivables, accrued income,
pre-payments, amounts recoverable on long-term contracts
as % of sales compared
Source: Globo Annual Reports, Aruba 10-Ks,
Aruba (Jul yr-end), Globo (Dec yr-end)

Several observations from the charts above:
  1. Each company’s revenue growth has been practically the same since 2009 (I have included Globo’s discontinued operations in this, i.e. including Globo Technologies).
  2. Aruba’s annual revenues are roughly 6x that of Globo’s.
  3. Aruba achieves a superior gross profit margin to Globo.
  4. While Aruba’s gross profit is superior, its EBITDA margin is paltry compared to Globo’s. In fact it’s never been above 6%, while Globo’s has never been below 38%.
  5. During the period 2009-12, while Globo reported a cumulative €158m in revenue and €70m in EBITDA, Aruba reported €1,379m (c. €1,000m) in revenue and $3m (c. €2m) in EBITDA. Globo is clearly doing something right!
  6. Globo has been investing heavily since 2009, so that as a percentage of sales, net capex has averaged 28% per annum. Aruba has been somewhat more pedestrian, spending an average 2% of sales on capex per annum.
  7. On a total cumulative basis, Globo has spent €41m on net capex during the period 2009-12. This compares to Aruba having spent $33m (c. €24m).
  8. Globo has consistently raised finance through debt and share issuance. Aruba has issued equity but also bought it back.
  9. Globo's trade and other receivables have run at 93% to 115% of sales. Aruba's have never been above 23%. 

Oh by the way, Aruba Networks also expensed $140m (23% of sales) as research and development costs during FY 2013 to its P&L. And regularly expenses c. 20% of revenue per annum as R&D. 

Eyebrow raising accounts ...


In comparison to its peer, Globo seems to capitalise a vast amount of cost, has raised significantly more finance through equity and debt, and has a receivables problem. 

In 2011, Globo appeared to have (and I reckon still has) a trade receivables problem. In 2011, the group had €25m (55% of sales) in trade receivables. Further, other receivables and other current assets, the bulk of which were prepayments and accrued income and amounts recoverable on long term contracts, totalled €18.5m. This meant that Globo had €43.5m (96% of sales) tied up in trade receivables, prepayments, accrued income and amounts due on long term contracts. Why amounts due on long term contracts fall into current assets I’m not sure; especially as other receivables classed as non-current in 2011 were de minimis

Globo assets
Source: Globo 2012 Annual Report
By 2012, all these balance sheet items added up to €33.7m or 58% of total 2012 sales, and 73% of 2012 continuing sales. How did this decline?

On 3 December 2012, Globo divested its Greek operations (announcement here). It sold 51% of its subsidiary, Globo Technologies (GT), to a company called, Zipersi Consulting, owned by GT’s management team for €11.2m. This was deferred consideration. In fact the payment schedule seems particularly favourable, with €9.2m of the consideration not due until December 2014 at the earliest and the final instalment in December 2016. Interest at a rate of 5% per annum.

Globo divestment of Globo Technologies
Source: Globo 2012 Annual Report
According to Globo’s 2012 accounts, as at 31 December 2012, GT had €29.7m in trade receivables (including intra group balances), €1.0m in other receivables, and €10.4m in other current assets; a total of €41.1m. GT’s revenue was reported by Globo to be €12.1m to 30 November 2012; hence the €41.1m in trade receivables, other receivables and other current assets, equated to 341% of this 11 month sales figure (2011: 176% on the same basis). 

Globo's record of Globo Technologies' assets
Source: Globo 2012 Annual Report
However, ...

Globo Technologies’ 2012 accounts can be found here; google does a surprisingly good translation. There are some discrepancies with Globo’s record and GT’s. Whereas Globo has GT’s trade receivables at €29.7m, GT has them at €15.8m as at 31 December 2012. In general, the other asset lines also do not tally, although the discrepancy is not that much. The revenue line differs considerably. Whereas Globo has GT achieving €12.0m in revenues to 30 November 2012, GT reports €35.7m in revenues to 31 December 2012. This discrepancy may be down to the sale back of 2 companies from GT to Globo on 22 November 2012, which is mentioned in note 4.4.1 in GT’s 2012 accounts.

Globo Technologies' statement of assets as at 31 December 2012
Source: Globo Technologies 2012 Annual Report
What is really weird is that in Globo’s accounts, it reports GT’s assets as at 31 December 2012, but reports GT’s liabilities as at 3 December 2012. I have no idea whether this is a typo or by design. If the latter then any clues as to why would be welcomed.

Globo's record of Globo Technologies' liabilities
Source: Globo 2012 Annual Report
Further into Globo’s 2012 accounts, in note 21 (page 93), Globo indicates that its share of GT’s revenue was €810,000, which I reckon is for the period from 3 December 2012 to 31 December 2012. This would imply a revenue run rate of c. €20m for GT, (€810,000 x 12 (months) / 49% (Globo’s share). This is higher than the €12.0m of revenues reported to 30 November but less than the €35.7m of revenues that GT reports to 31 December 2012. I have no idea how this reconciles. Further, whereas Globo has GT reporting a profit before tax of €671,000 on revenues of €12,049,000 to 30 November 2012, according to note 21, its share of profit for the period 3 December 2012 to 31 December 2012 comes to a loss of €297,000 on revenues of €810,000.

By the half year stage to 30 June 2013, GT is reported by Globo, to be achieving H1 revenues of €13.6m and PBT of €1.49m, of which €0.7m is attributable to Globo.

As at 31 December 2012, Globo carried its investment in GT at a value of €10.5m on its balance sheet. It also carried the €9.7m in deferred consideration due as non-current other receivables. At the interim stage to 30 June 2013, the carrying value of this investment appears to have risen to €11.2m, while in light of the remaining €600,000*** in deferred consideration which was due on 15 January 2013 and €500,000 due on 31 December 2013, the other receivables line in non-current assets has fallen to €9.3m.
  
***According to the annual report, in note 15 (pages 85-87), €400,000 of the initial €1,000,000 that was due by 15 January 2013, was received prior to the year end, i.e. before 31 December 2012. Hence this is reflected as a cash inflow, and can be seen in the accounts in the last section of note 15, under the net cash (outflow)/inflow related to GT. However, it would also appear that while €400,000 in cash was received, the €7,061,000 in cash and cash equivalents (I presume all cold hard cash) that was held by GT, went with GT. This resulted in a net cash outflow on disposal of GT, of €6,661,000. This is an altogether odd flow of cash for a disposal. Usually one would imagine that the cash flows from the acquirer to the vendor and not the other way around, albeit with an understanding that it flows back over the years to come.

Net cash outflow upon disposal from Globo to Globo Technologies
Source: Globo 2012 Annual Report
Flow of cash from Globo to Globo Technologies
and anticipated deferred consideration schedule
Source: Globo 2012 Annual Report
What I am struggling to find is a reference within the recent interims, to 30 June 2013, which highlights the receipt of the remaining €600,000 which was due on 15 January 2013. The €400,000 of the €1,000,000 due by 15 January 2013 was received in advance and prior to the 2012 FY end and reported. I cannot find the remaining €600,000 cash inflow referenced in the interim’s statement of cash flows.   


So what's happened? ...

What Globo appears to have done is to have put a load of receivables off-balance sheet, replaced on Globo's balance sheet with deferred consideration and a investment valuation in an associate (Globo Technologies).

Continuing annual sales as stated in Globo 2012 Annual Report
Source: Globo 2012 Annual Report
Total annual sales (including Globo Technologies) and
deferred consideration and investment accredited to Globo Technologies
Source: Globo 2012 Annual Report
In the meantime, Globo continues to raise finance and generate free cash outflows.

Net proceeds from borrowings and share issue
as compared to operating and free cash flow
Source: Globo accounts and Bloomberg 2013E consensus

Further concern ...


Within note 31 of the 2012 accounts, Globo highlights something which should raise further concern.

Source: Globo 2012 Annual Report
It would appear that in raising debt, that the group uses its debtors as security. Selling receivables before the collection date in return for finance is a tried and tested method for manipulating operating cash flow. One interpretation may be that this is precisely what Globo is doing here. Companies sell trade receivables (usually to banks), transferring ownership, and take in the cash up front. The benefit to the cash flow statement is that the raising of finance can be demonstrated as a reduction in debtors and therefore a cash inflow to the operating cash flow section as opposed to a financing inflow.

I note that Globo’s CEO, Mr Costis Papadimitrakopoulos, personally co-guarantees the banks’ credit facilities. This statement is somewhat ambiguous, but I take it to mean that he is a guarantor for the facilities in the event that the receivables do not pay up. The way this is worded sounds more like the CEO is so confident in the quality of the receivables (the security) that he has offered to act as guarantor. Somehow I doubt that this was voluntary. 


Further, I have no idea what securing “major customer contracts in exchange for 60-70% of the contract value” involves, but it doesn’t sound good. 

In summary ...


All of this is more than enough to raise all of my eyebrows and prompt me to get on the phone to Jackie at ETX to short more.



Disclaimer: The information, discussions or topics referred to on this blog should in no way be considered “advice” to buy or sell anything. The information which may be referred to is freely available in the public domain and where required the source of information is referenced to for verification. While every effort has been made to ensure the veracity of any information contained within this blog, the author accepts no responsibility for the accuracy of any information contained within this blog or for the sources of information which may be referred to. Readers are responsible for their own actions and interpretation of the information contained within this blog. 

Sunday 27 October 2013

Tesla (TSLA) ... a roller coaster ride?

Sunday 27th October 2013

I was sent this chart on Friday last by a broker friend of mine. If I was long Tesla (TSLA US, mkt cap $20.6bn), then I'd probably stare at that chart for a minute. Possibly two. No position in either TSLA or CSCO. 

Tesla share price (2011 to current) as compared
to Cisco Systems share price pre and post dot com bubble
Source: Bloomberg  
Disclaimer: The information, discussions or topics referred to on this blog should in no way be considered “advice” to buy or sell anything. The information which may be referred to is freely available in the public domain and where required the source of information is referenced to for verification. While every effort has been made to ensure the veracity of any information contained within this blog, the author accepts no responsibility for the accuracy of any information contained within this blog or for the sources of information which may be referred to. Readers are responsible for their own actions and interpretation of the information contained within this blog. 

Thursday 24 October 2013

Globo (GBO) ... a few piccies

Thursday 24th October 2013

Some select charts on Globo (GBO, mkt cap £264m). 
No comment other than that I am short at 70p/shr.


Source: Globo Annual Reports and recent placing RNS
Source: Globo Annual Reports and recent placing RNS
Source: Globo Annual Reports, recent placing RNS, and market consensus
Source: Globo Annual Reports, recent placing RNS, and market consensus
Source: Globo Annual Reports
Source: Globo Annual Reports
Source: Globo Annual Reports
Source: Globo Annual Reports
Source: Globo Annual Reports
Source: Globo Annual Reports
Source: Globo Annual Reports
Globo share price
Source: Bloomberg
Disclaimer: The information, discussions or topics referred to on this blog should in no way be considered “advice” to buy or sell anything. The information which may be referred to is freely available in the public domain and where required the source of information is referenced to for verification. While every effort has been made to ensure the veracity of any information contained within this blog, the author accepts no responsibility for the accuracy of any information contained within this blog or for the sources of information which may be referred to. Readers are responsible for their own actions and interpretation of the information contained within this blog.