Best of the boards: Tesco, Monitise and Parkmead

In this week's best of the boards, Interactive Investor takes a look at what its users have been saying on the discussion boards.

Tesco

What happened: In a further blow to Tesco's already battered reputation, four senior members of staff were suspended on Monday and auditing firm Deloitte were asked to investigate after the firm overstated its first-half profit guidance by an unbelievable £250 million.

Just as we suspected last month, Tesco was storing more problems for investors. And this is a whopper.

In August, the company confidently predicted that trading profit for the six months ended 23 August 2014 would be about £1.1 billion. Not now, thanks to a massive accounting error blamed on timing differences and "the accelerated recognition of commercial income and delayed accrual of costs."

As the supermarket's share price has since plunged to 190p - its lowest in over 11-years - long-suffering shareholders must be wondering what next? Tesco had already shocked the market with a pair of profit warnings this summer and slashed the dividend, but financial foul-ups like this raise serious questions about the inner working of Tesco, which only further undermine investor confidence.

What users said: Users on the Interactive Investor discussion board were bitterly disappointed with the revelation and the consensus was a 'strong sell'.

'Mr Google' said on Monday morning: "It is unacceptable this has happened and I do hope this brings about stringent accounting practices within Tesco's. Truly pathetic that these professionals paid considerable sums can make such a cockup.

"I hope the new chief executive uses this opportunity to really fix things rather than give Tesco a new lick of paint."

'dave297' struck a similar chord: "Staggering that a company of this size, no doubt employing a very large number of very highly qualified accountants using very sophisticated accounting systems can make such a massive and fundamental error.

"We have come to expect this from small speculate AIM stocks, but not from companies like Tesco."

Some users were slightly more optimistic. 'pipos' said it would be a long road to recovery, but that "Lewis [CEO] is the right man because he is all about brands, and the Tesco brand is damaged and miss-positioned."

There were also some who felt that the news created a buying opportunity.

"May go lower again as known major challenges exist, plus ongoing enquiry regarding overstated profits adds to uncertainties, but this is still a profitable business and, in my opinion, the selling may be overdone on sentiment," said 'jackdawsson'.

"Modest target of 220+ for later this year as recovery unlikely to be without setbacks," added the user.

Monitise

What happened: Monitise shares plunged last week when Visa Inc said it was selling a 5.5% stake in the mobile payments expert. They hit 26.25p at one point, but an army of supporters both inside and outside the City has been mobilised and the price is back up to 35p.

UBS joined the fan club, initiating coverage with a bullish take on prospects:

"Earlier this year, Monitise announced a change in its business model towards a subscription model rather than up-front licensing, with the aim of reducing barriers and accelerating adoption of its platform. This transition limits short-term growth, but will likely increase long-term value. We believe Monitise is well positioned as a partner to banks as they look to serve the mobile channel, and initiate coverage with a Buy rating."

Monitise has certainly had some success in attracting big name customers as it targets 200 million registered users by 2018. It has 30 million already and a new deal with Santander, which has more than 100 million customer accounts, could be big business. It will be a few years before the company turns a profit, but growth should be rapid when it does.

As we've written before, the Monitise story remains intact and the potential is exciting, so the shares look good value long-term. However, in a "quiet period" post results, it will need new contracts and further user growth to generate fresh significant momentum.

What users said: On the discussion boards, 'barno99' said Monitise seemed like a "huge growth stock going forward and at this price a clear buy".

'InvestorBot' told the board that he used to own Monitise shares "some time ago and unfortunately sold at 30p last time they sprung the right issue and before the big jump up to 80p.

"The question is this rise from the recent low a recovery or just a dead cat bounce? The company still isn't making any profit and they are burning their cash reserves at a fast pace. It wouldn't surprise me if they go for another rights issue, question is at what price this time?

"I'll sit this one out until the smoke clears, but does anyone else think another rights issue is on the horizon?

'GCCR' disagreed, "No, they have enough cash in the bank and they know the likely effect on the share price."

Parkmead

What happened: A Dutch gas discovery sent shares in Parkmead gushing over 4% on Wednesday, but it's a relatively small find and probably not the catalyst for a much bigger move. That is expected to come later.

Reaching a total depth of 7,475 feet, the Diever-2 well encountered a 157 foot gas column, exceeding pre-drill expectations in both net pay and porosity values in the Rotliegendes age sandstone reservoir.

The well was targeting the Diever West exploration prospect in the Drenthe IIIb production licence, onshore Netherlands. Parkmead is working with Vermilion Energy, NAM and EBN.

With just a 7.5% non-operated stake in the field, Westhouse Securities reckons Parkmead has an un-risked value of just 1.3p for the well, with the better outcome boosting that to no more than 3p.

"The stock has drifted sideways over the past six months, and while positive, this news is unlikely to be material enough to trigger a breakout," said the broker. But it is bullish long-term, predicting a share price of 400p one day, almost double today's [Wednesday's] price of 223p.

What users said: The user consensus on the Interactive Investor discussion board was a 'strong buy'.

'city watcher' said early on Wednesday: "Looking good and Parkmead appear to have a 15% interest here. Onwards and upwards for the share price today."

While 'earthly' said: "Just love a successful story based on actual facts" and 'OptimistPrime' explained that this is what Thomas Cross (executive chairman) was all about, "30% here 25% there...I'm in for the long run on this share as I really think lighting will strike twice".

'callsignzulu' said he was "interested in investing" but would buy in when he saw a good time for the share price to rise.

However, 'No Wahalla' doubled his holding on Thursday and said: "I expect at the end of this financial year this company will be in a pretty good financial position. Production of 2,300 barrels of oil per day from a politically stable region."

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.