timsk
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Hi dr.blix,
Doubtless you've read loads of posts about bottom picking and catching falling knives etc., so you're aware that going long these two stocks is a risky business! Because you listed them in the thread title, I looked at the charts before opening and reading the thread. My initial thoughts were that ITV appears to have found support at 25 so I wouldn't want to be short right now. Equally, there's nothing about it that would make me go long. Yell is a similar story, although it has hit fresh lows this week and, if I had to be in this stock, I'd rather be short than long. To paraphrase my buddy Tom Orton (here on T2W), I don't want to buy/sell something that no one else wants to buy/sell. And there isn't sufficient evidence to suggest that anyone is very interested in buying either these two stocks just yet.
Tim.
Doubtless you've read loads of posts about bottom picking and catching falling knives etc., so you're aware that going long these two stocks is a risky business! Because you listed them in the thread title, I looked at the charts before opening and reading the thread. My initial thoughts were that ITV appears to have found support at 25 so I wouldn't want to be short right now. Equally, there's nothing about it that would make me go long. Yell is a similar story, although it has hit fresh lows this week and, if I had to be in this stock, I'd rather be short than long. To paraphrase my buddy Tom Orton (here on T2W), I don't want to buy/sell something that no one else wants to buy/sell. And there isn't sufficient evidence to suggest that anyone is very interested in buying either these two stocks just yet.
Tim.
dr.blix
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i have a bad habit of trying to pick up bargains...not very useful when all you really need to do is jump on in the middle of a healthy trend.
i'm assuming that the downloadable trading plan on T2W was put together by you tim? if so, thanks for all your work there, i'm going through it now...really useful for us noobs.
i'm assuming that the downloadable trading plan on T2W was put together by you tim? if so, thanks for all your work there, i'm going through it now...really useful for us noobs.
timsk
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you need to understand your fundmentals. some stocks are buffered by hugh pension investments so even if the hedge funds sold there is a medium term bottom. saying that Legal and general are starting to pull some of that medium term bottom weakening the fall. You really need to understand what stock your trading e.g. retail has no bottom in the current market whereas some like aal who was top faller on friday is more than likely to bounce up. its not a question of simply picking any stock on a bottom, as the expression goes i love coming in when theres blood on the wall 
dash riprock
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well i wish i'd bought some yell at 12p now
I've found that it is a risky business asking for opinions!
Just work out what you can lose and get on with it!
Those penny shares can make you lose a lot of capital, to be sure, though, and the spreads have to be watched, too.
dr.blix
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ok, back to YELL and ITV...
i've missed out a couple of times now by being hesitant pulling the trigger with YELL.
if anyone else watches YELL, or the media sector, either post here, or PM me, if you have your own tech analysis and would like to swap opinions.
i've missed out a couple of times now by being hesitant pulling the trigger with YELL.
if anyone else watches YELL, or the media sector, either post here, or PM me, if you have your own tech analysis and would like to swap opinions.
i was lucky to have a bit of a earner with Yell a mth back
i still watch Yell every now and again to see what is going on with share price, i surpose if i held my stocks longer i would make more money but i like to be in and out and move on with the next stock (i must stress i have only being buying shares for about 3 mths)
i still watch Yell every now and again to see what is going on with share price, i surpose if i held my stocks longer i would make more money but i like to be in and out and move on with the next stock (i must stress i have only being buying shares for about 3 mths)
dr.blix
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please take this advice then steve, you've been going long (i presume you're not shorting) in a FTSE up trend that started 9th march. essentially most FTSE100 shares have been going in one direction, which can give a false sense of how easy/hard trading equities is. be very careful about using the same techniques to trade now, as we're rangebound, with a possibility of a retracement and you could quite easily give your gains back. apologies if i'm stating the obvious here.
if you have any tech analysis for YELL i'd be happy to swap views.
thank you for your reply
i totally understand what you are saying i have settled down abit and kept a cash reserve just working out what the markets are doing now
i now know i was lucky when i 1st started because a numpty could of earned money like i did without doing much research, now its time to look carefully when to buy new stocks (ie i have not purchased any new stocks for nr 2 weeks where as i was doing it nearly everyday.
Now nothing is jumping out to me i have in my mind we are heading for some nasty falls(if you have stocks what are jumping out to you? i am happy to hear them)
all the best
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dr.blix
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i have a small portfolio of 8 companies spread across different sectors. i've been monitoring them for 6 months, but i don't have any open positions at the moment.
i've been trying to learn more about markets and indices in general before i go back to equities, as i suffered big drawdowns after market conditions changed in jan (which is why i was warning you about the same).
good luck, and remember to have a good risk management strategy in place.
i've been trying to learn more about markets and indices in general before i go back to equities, as i suffered big drawdowns after market conditions changed in jan (which is why i was warning you about the same).
good luck, and remember to have a good risk management strategy in place.
ukdaytrader
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Gents I would appreciate any comments on my analysis below ;
As at today (22nd June 2009) Yell share price has closed at 25.5pence. This gives a market capitalisation of around £205m.
Yell faces some challenges in its business model, unfortunately a lot of people, myself included don't use either the paper directory or internet service. The ability to search using google, iphone and many other on the move devices together with telephone business services etc make the business model relatively challenging. Year on Year comparison there has been a reduction in printed directory revenues and an increase in internet advertising. Given the more powerful search alternatives for example google maps which provides location and street views of the business as well, it is debateable whether the internet revenue can continue to increase at the rate it did during 2008/9. Furthermore given you have to pay to appear on Yells internet listing (certainly in the UK) the breadth of business coverage is significantly reduced as some small businesses dont want to pay to advertise on the internet, particularly when you can do it for free.
The current downturn will certainly put pressure on the annual listing subscription as business take the opportunity to review their costs over the next few years.
There has also been an announcement that Yell may need to reset it covenants. (22nd June 2009)
Looking at the total debt of Yell as at 31 March 2009 total loans and other borrowing stood at £4,258.3m of which £3,876.6m is due after more than one year. Surprisingly the interest rates on a large proportion of this debt is around between 2.8-4.1%. This is pretty cheap given the lack of tangible assets on the balance sheet. Any re-negotiation of this debt will likely lead to a significantly higher interest charge.
Of the total debt £381.7m is due to be repaid within one year.
If you take the underlying profit for 2009 ( Revenue less cost of sales less distribution and administration costs) the profit was £536.1m (£575.5m - 2008) . This is a significant reduction in underlying profits for the year, even though there was a slight increase in revenues largely from Internet advertising.
If we assume a P/E ratio of 7 that would value yell at around £3,752m. It debatable at what P/E ratio that could be used to value the business.
If we look at it another way a competitor may be looking for an ROE of around 14% on this type of business, given the reduced growth rate in the industry and increasing competition from players with much deeper pockets. In order to say achieve an ROE of around 14% the total value payable would be around £3,800m.
Both these values fall short of the total debt owed by the company of £4,258m. On this basis the valuation would be a negative £400m some £600m away from the current market capitalisation.
Other noticeable factors that I gauged through looking at the financials was the presence of a final salary scheme, which although looks relatively well funded, adds to the risk of the company.
The current business environment will also add additional pressure on bad debts together with revenue streams.
On that basis I have decided to short this stock at 25.5pence
As at today (22nd June 2009) Yell share price has closed at 25.5pence. This gives a market capitalisation of around £205m.
Yell faces some challenges in its business model, unfortunately a lot of people, myself included don't use either the paper directory or internet service. The ability to search using google, iphone and many other on the move devices together with telephone business services etc make the business model relatively challenging. Year on Year comparison there has been a reduction in printed directory revenues and an increase in internet advertising. Given the more powerful search alternatives for example google maps which provides location and street views of the business as well, it is debateable whether the internet revenue can continue to increase at the rate it did during 2008/9. Furthermore given you have to pay to appear on Yells internet listing (certainly in the UK) the breadth of business coverage is significantly reduced as some small businesses dont want to pay to advertise on the internet, particularly when you can do it for free.
The current downturn will certainly put pressure on the annual listing subscription as business take the opportunity to review their costs over the next few years.
There has also been an announcement that Yell may need to reset it covenants. (22nd June 2009)
Looking at the total debt of Yell as at 31 March 2009 total loans and other borrowing stood at £4,258.3m of which £3,876.6m is due after more than one year. Surprisingly the interest rates on a large proportion of this debt is around between 2.8-4.1%. This is pretty cheap given the lack of tangible assets on the balance sheet. Any re-negotiation of this debt will likely lead to a significantly higher interest charge.
Of the total debt £381.7m is due to be repaid within one year.
If you take the underlying profit for 2009 ( Revenue less cost of sales less distribution and administration costs) the profit was £536.1m (£575.5m - 2008) . This is a significant reduction in underlying profits for the year, even though there was a slight increase in revenues largely from Internet advertising.
If we assume a P/E ratio of 7 that would value yell at around £3,752m. It debatable at what P/E ratio that could be used to value the business.
If we look at it another way a competitor may be looking for an ROE of around 14% on this type of business, given the reduced growth rate in the industry and increasing competition from players with much deeper pockets. In order to say achieve an ROE of around 14% the total value payable would be around £3,800m.
Both these values fall short of the total debt owed by the company of £4,258m. On this basis the valuation would be a negative £400m some £600m away from the current market capitalisation.
Other noticeable factors that I gauged through looking at the financials was the presence of a final salary scheme, which although looks relatively well funded, adds to the risk of the company.
The current business environment will also add additional pressure on bad debts together with revenue streams.
On that basis I have decided to short this stock at 25.5pence
dr.blix
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hi UKDT,
my analysis (purely chart based) has the next res level @ 18p
yell is currently in a down cycle. it may have started to recover (it was showing RSI bullish oscillator divergence), but i think their financial report (released after market hours on friday) put paid to that.
i think the down cycle, the gloomy financial report and the FTSE in a possible rectracement to 4150 (and beyond) makes a short look quite compelling.
my analysis (purely chart based) has the next res level @ 18p
yell is currently in a down cycle. it may have started to recover (it was showing RSI bullish oscillator divergence), but i think their financial report (released after market hours on friday) put paid to that.
i think the down cycle, the gloomy financial report and the FTSE in a possible rectracement to 4150 (and beyond) makes a short look quite compelling.
ukdaytrader
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Good to get another view on this. I will probably put a limit on around 18 - 20p. Will see what happens tomorrow.
ukdaytrader
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Check the price tomorrow, it looks as if the analysis proved wortwhile
