"Last month, I promised to consider adding more shares in LSE:ALU:Alumasc to the Share Sleuth portfolio. The portfolio already has a small holding in the company, which designs, manufactures and supplies building products. I think it's a good ..."
After Carillion I checked the cashflow of Alumasc and its not great. Decided to wait and see if there were signs of this being temporary. Instead of seeing signs of cashflow improving they announced the acquisition of Wade. Now this trading statement, 4-5% reduction in projected revenue and 15% reduction in profit.
Note, also that they announced they were taking on additional sales people for Levolux - so they are increasing costs and reducing revenues.
Was management distracted by the acquisition? Is there a bigger problem?
The drop in price is probably about right. Holding to see how this plays out over the summer - for now.
"If you look at LSE:ALU:Alumasc's revenue and profit over the last decade or so, you'll probably be nonplussed. Alumasc doesn't look like a growing business and candidate for long-term investment.First impressions are misleading. The business is ..."
The acquisition was a surprise. Comes with a 52,000 sqft freehold property of unknown value - but from Google street view it is a smart newish commercial warehouse. Pleasing that the company comes with £6m in cash - shows the company has been profitably run over some years. Endole shows Wade International with net assets of 11.2m. Endole also shows uniform growth over 10 years with a minor hiccup in 2016.
More generally the company says results strongly weighted to second half of year. That remains to be seen. However like for like sales down 1.9% but EPS down 15.9%.
Considering the worsening cashflow situation, it begs the question whether increasing dividends is really a good idea.
Interesting that they seem to be struggling when we haven't really hit a construction downturn yet. There has been some levelling off, and Carillion has probably spooked the industry, but you'd expect this 6-12 months into a downturn.
It could get a lot uglier -- I like the company but I think I'll wait for sub £1.
The products that Alumasc is selling address sustainability concerns. Water, drainage, shading, green roofing. These are things that architects are increasingly concerned with and it is largely architects that will specify Alumasc's products.
"Companies analyst Richard Beddard gives us his view on this good business which is expected to do well over the very long-term.Alumasc's just published its annual report. It's in your Share Sleuth Portfolio Richard. What's good about Alumasc ..."
On the down side there is a substantial pension defecit, and sometimes a large spread. Also building products seem especially unloved at the moment, despite the uptick amongst the builders.
Plentiful working capital available.Recent institutional buying, even if it was tiny!
Interim results in February gave an order book up 42% and EPS up 10% 9though profits HAD fallen).
Down 4% today on small volumes. Results are not due until early September.
a bit surprised at reaction to agm s'ment last week. i thought it informative, a bit disappointing but not at all surprising.
i saw no cause for alarm so the surprise that there seemed some sort of panic selling - or did some have a motive? i had sold a few earlier to release some profit so initially felt quite clever - until i saw extent of damage - when i then felt frustrated to feel i couldn't buy back in 'cos my cash had gone elsewhere and i didn't want to sell anything to release more funds. in the end decided to sit tight and await outcome
ii editor article was no help in my thinking esp. conclusion that pension deficit could go up OR down. well of course it will do one or the other just as tomorrow it will rain OR shine.
not the sort of conclusion to expect from a supposed informed source.
my thoughts are that sp will quickly recover as otherwise an opportunistic bid will arrive.
either case would suit me well
perhaps - tomorrow we may learn what may be behind the v'large dealings today - on which no one has so far commented.
perhaps - no one thinks it worthy of comment
perhaps - its ii editor backing his opinion
i can't think that anyone would want to dispose of such a qty at this time
perhaps - some thing is about to happen
perhaps - some one would like to express an oipinion
perhaps - i'm the only one interested
"Big cyclical firms such as Royal Bank of Scotland GroupÂ and BHP BillitonÂ both operate with commodity-style businesses.
Although large in terms of their market capitalisations, neither firm produces much added value to their product offerings. Go ..."
Who is after us . The share price movement and the number of shares traded in the past 10 days suggests someone is building a stake. The director share purchase last week was too small to have this effect
It seems one of the directors has just woken up to the fact that his ISA has been increasing his holding in ALU over the past 5 years, and without informing the market and thus in contravention of the listing requirements. No big deal , I agree, but doesn't give much confidence in the far more serious issue of his ability in actually directing the company.
"2014 was a year of stability for the manufacturer of building products as it emerges from a period of self-imposed and wider construction market turmoil.The main question facing investors is how far the future is likely to resemble the past. ..."
"Working hard for pensioners Alumasc (ALU) might be a customer of Waterman, the engineering contractor I profiled last week.Working hard for pensioners Alumasc (ALU) might be a customer of Waterman, the engineering contractor I profiled last ..."
"Half year results are a shocker Strewth. Margin pressures overshadow revenue growth... The first line of Alumasc's half year results statement, is a lesson in understatement, which is ironic.At its building products division profit margins are ..."
Well at least it is headed in the right direction. My instinctive feel is that it should have done better, but given the hole that they have had to dig out from, on balance OK. The instinctive 'safety first' approach of management is the biggest impediment, but it probably reflects its investor base. See you all next year the excitement is too much!
"Business hasn't been easy for LSE:ALU:Alumasc, but the firm has still made its biggest profit in five years, driven largely by demand for building products from housebuilders and for refurbishment projects.Losses at the engineering products ..."
It is estimated that over 90% of AIM stocks are INFECTED by short-sellers !
Many highly popular stocks are going down even on GOOD NEWS !
# IF you were a short-seller, BLUFFING, (basically manipulating a shares' price) about a company's overvalued share price, you might not want to *draw attention to yourself since you could get accused of stock manipulation. So you would hope (OR PLAN FOR) others to get involved and to present SEEMINGLY GOOD REASONS to short the stock.
You would want to put AS MUCH FEAR INTO 'LONGS' as possible and would use high volume short trading as well as buying to drive the share price down as low as you can and as long as you can. You really want the longs to fold and to get out of the game. If you are consistently seeing sellers overwhelming buyers driving a share price down as a stock seems to be going up, I can assure you it's probably shorts' selling, since longs are totally motivated to sell their shares at the highest possible selling price. #
IT is easier to tank a share price, rather than make it go UP, by short-selling.
RUINOUS to genuine investors.
They may be able to buy in cheap BUT what's the good, if the stock never really recovers?
AND when they have got you all hooked on the 'lovely' new all-time LOW.....They'll SHORT IT AGAIN !
# ChalieHarper - posted on iii - TRP
IF a fund owns a large share holding in a firm and is long.... whilst waiting for its end game to materialise, it loans out any number of its shares to a shorter...the shorter then manipulate the share price down making £X amount when short ended.... the shorter then gives the loaned shares back and splits the proceeds 50/50.
They both make cash, probably during a time when not much is happening with the sp. IT's a WIN-WIN for them but BAD news for the pi's who as usual may have sold at a loss because the cash has to come from somewhere. #
# Topalov asks on iii Ariana Res-AAU
(to give balance to this debate, i have included his response and Q.s with my reply)
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