Short Cedar Group?

Sharky

Admin
5,626 390
Noticed that three people from a total of five for this weeks competition (entries in before midnight tonight!) have picked Cedar Group as a short for next week. So here's a little more info about the company and a graph attached:

Friday Close
Change (p): 1.0
Change (%): 6.7%
Curr Bid: 16.0
Offer: 17.0
High: 16.25
Low: 14.75
Open: 15.0
Volume: 4,807,506

Sector: Software & Computer Services
Turnover (m): 73.26
Profit (m): -24.443
Norm EPS: -33.8
PE ratio: -0.473
Mkt Cap (m): 10.5
NMS:25000


17th Sept - AGM

LONDON AFX) - Cedar Group PLC said that, although it still expects current full-year revenue to show sound growth over last year, difficult trading conditions in the US and the UK are likely to result in revenue for the current year falling materially below current market estimates.
At the annual general meeting, chairman John Stanley said the company is seeing evidence that decision cycles for investment in and deployment of IT
systems are lengthening and that the balance is shifting from new licences towards lower yielding upgrade licences.
"In the light of this, Cedar is actively reviewing its cost base," Stanley said.

18 Sept - STOCKWATCH

LONDON (AFX) - Shares in Cedar Group PLC slumped in early deals to extend on sharp losses yesterday, after its house broker Merrill Lynch reacted to a huge
profit warning from the specialist software group by cutting its recommendation, dealers said.
At 10.23 am, shares in Cedar Group were trading down 58 pence at 19-1/2, extending their 60 pct fall yesterday.
The broker stressed it is concerned over Cedar's balance-sheet and uncertainty over its working capital facilities. Shares are likely to underperform until these issues are clarified, it said, downgrading its recommendation to 'reduce' from 'accumulate'.
This follows Cedar warning yesterday that lengthening sales cycles would see turnover "materially below" analysts' full-year forecasts of 155 mln stg, and
pretax miss targets of 18 mln stg for the year to March 2002.
The warning came less than 3 months after Cedar gave upbeat analysts' briefings and posted full-year earnings which, although muddied by a change in
accounting policy, were generally seen to match expectations.
This meant Cedar's warning of disappointing turnover was taken particularly hard by analysts; Merrill Lynch said that, given previous guidance, it simply
could not see how this shortfall could have occurred.
Cedar management guided in July that it had an order book of 123 mln stg, of which 75 pct would fall into 2002. License revenue comprised 46.4 mln stg of
this total, with 90 pct falling into 2002.
Management is now seen to be expecting its ESG acquisition to produce 75 mln stg of revenue this year, marginally below expectations. But using a mixture of
new and previous guidance, Merrill arrived at a minimum revenue of 125 mln -- well below the broker's previous forecast of 155 mln stg which Merrill Lynch
believed was "well underpinned".
Yet Cedar indicated to analysts yesterday to expect revenue of nearer 120 mln stg, leading Merrill Lynch to view the licence order book management quoted
at the year end as "not materialising".
Following discussions with management, Merrill slashed its 2002 adjusted EPS expectations to a loss of 29.6 pence, from a profit 21.5 pence previously.
Net debt expectations were widened to 44 mln stg from a former 6.7 mln. The company said in July that it aimed to be debt-free by the first quarter of fiscal year 2003, but this hope now appears to be unrealistic.
This led to analysts' concerns over the balance sheet strength, as Cedar is currently geared for growth. Cedar said yesterday it will cut jobs throughout its European operations, which currently employ about 1,300 people.
Merrill Lynch's net debt forecast of 44 mln stg assumes that earn-outs due this year of 9.8 mln stg are paid in full. The broker also highlighted that Cedar has a 30 mln stg working capital facility in place which will need to be renegotiated.
"Our view is that 2003 will also be poor and the net debt position will remain high," Merrill concluded.

18 Sept - Director Shareholding

Director Michael Harrison bought 100,000 shares @ 10.25p.
 

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waldorf

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waldorf

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More news about CED, should make a good short providing it doesn't open
well down, but then what do i know, after my performances over the last 6
months, being 40% down, hope the good times come to save me soon.
ps sold all my [email protected] 15.1 p so at least profited from them

Col


Cutting from The Times 29/9/01



MERRILL LYNCH, the US investment bank, has resigned as broker to Cedar

Group, the software company, bringing to an end a tumultuous year-long

relationship.

It is understood that Merrill Lynch advised Cedar in June to begin searching

for another broker after questioning the companyÕs forecast that 75 per cent

of a £123 million order book would materialise this year. Cedar has yet to

find a replacement broker.



Earlier this year, Cedar changed its accounting policy to more conservative

US standards, leaving a large chunk of orders that could not be recognised

in its most recent full-year accounts.


Last week Cedar confirmed that its turnover would be less than the £155
million forecast because of a sales slowdown. It is renegotiating a £30
million overdraft facility with Bank of Scotland and expects to make a
number of its 1,300 staff redundant.

That warning, which sent CedarÕs shares plummeting by 83 per cent to a low
of 12p, prompted Merrill Lynch to mark down its 2002 sales expectation to
£120 million and to advise investors to reduce their stakes. CedarÕs shares
closed at 13 p yesterday.

Merrill Lynch took over as broker from Teather & Greenwood last year and
underwrote a £65 million rights issue to fund CedarÕs purchase of ESG.

Mike Harrison, managing director of Cedar, said: ÒMy expectation is that we
now have a different profile than what Merrill Lynch expected our profile to
be.Ó Merrill Lynch declined to comment.
 

MrVibez

Newbie
3 0
Risky

I personally feel there is too much risk versus reward in shorting a stock that has fallen 95% to 13p in such a short space of time. It looks oversold to me I have to say, be careful with this one as all it would take is one bit of positive news from the company for it to be marked up considerably.

A better short prospect IMO would be Interserve (IRV) which has broken the neckline at 480p of a multi-month head and shoulders formation. I will be watching this one Monday for any sign of weakness. Initial target 380p.

Regards,

Mark
 

Prince2Pauper

Newbie
7 0
CED

Cedar Group is up,
But there is no news, Could the chartists out there tell me what it is that has pushed the price up. I mean technically ??

Many thanks

Prince 2 Pauper :(

PS. I am a new poster and new to stock trading so please bear with me
 

waldorf

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Hi, Prince 2 pauper. was going to copy the posting on Advfn BB: Cedar - The truth, but noticed your nick on it, could it be that Mike Hosie's astonishment at the drop in Cedars price,and the rest of the postings answers to why the share price fell is to be believed.
Col
 
 
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