Tuesday 9 December 2014

Aberdeen Asset Management (ADN) ... taking the low road

Tuesday 9th December 2014

On the basis of a cursory glance of the price chart, you may reckon on Aberdeen Asset Management (ADN, mkt cap £6bn), having a third pop at 500p/shr. 

Aberdeen Asset Management share price
Source: Bloomberg
However, ADN's management can't put too much faith in this. They lobbed out over 3 million shares between them early last week. 

ADN Director sales after update
Source: Bloomberg
Indeed, approaching 500p/shr appears to have been the magic number to exit stage left over recent years. 

ADN director sales/purchases over recent years
Source: Bloomberg
Lastly, I'm minded to observe the CitiFX Emerging Market Carry Beta Index (CAFZBET4 Index). This leads me to believe that ADN is only going one way; perhaps 400p/shr for starters. So I sold short at 452p/shr.  

ADN as compared to CitiFX Emerging Market Beta Index
Source: Bloomberg
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6 comments:

  1. I see where you are coming from Matt. I would add though that the Aberdeen board quite often sell post results before setting up more options to restore their economic exposure.......

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    1. I like their style Neil. I like their style! I'm sure ADN is a fine business. It's management do seem to provide a good steer of when to take money off the table and what with everything going on in the oil market and other commod markets probably makes EM exposure somewhat more risky for the time being. So this is just a little trading call I've put on for a short while.
      Best
      Matt

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  2. Avanti recently went parabolic.
    Most likely you have seen the Ennismore note.
    http://www.ennismorefunds.com/documents/OEIC/Newsletters/2014/NL%20OEIC%20Oct%2014.pdf

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    1. Yes, it would appear that the price shot up on a spurious article indicating some sort of involvement with Facebook, and the cost of borrow going through the roof from a stock recall. It still looks as bust to me as ever.

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  3. Fully agree. Time will tell. You probably heard that before, I see similarly high downside at DIA. January could bring a massive profit warning (like last year) when I look at illusionary consensus estimates.

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    1. I sold short DIA yesterday at 785p/shr in expectation that you will prove correct.
      http://lordshipstrading.blogspot.co.uk/2014/12/dialight-dia-here-we-go-again.html

      Best
      Matt

      Delete