I agree. This has been oversold and now the RI has been conducted we should start to see a gradual improvement in sentiment towards what is a very good quality business . Its quite possible we will see an upward re-rating from brokers if Management report a positive on target quarter with no more contract own goals !
No less than four separate parties report that they reduced their short positions on
This suggests that they availed of the excess Rights -issue stock coming to the market on that date - to close some of their short positions.
Perhaps they were hoping for a much smaller take-up of the rights issue.
The end result is that disclosed short positions reduced (overall )from 5.28% to 3.72%
Just because stockmarketwire states the opposite of the facts, and for some unknown reason repeats it three times, does not make it correct.
The RNS SAYS (and I quote)
Reason for the notification
Galliford Try plc
Description of the financial instrument, type of instrument
Ordinary shares of 50p each
Nature of the transaction
Acquisition of ordinary shares
Anyone who bases any trading decisions on the likes of stockmarketwire needs their head examining. If you can't read the RNS of a company you are invested in, you'd be better off putting your money in the Post Office.
Am I missing something then - the way the RNS is presented is that they took up their entitlement under the rights issue - why wouldn't they it was hugely discounted, and immediately sold, taking the profit. I dont understand why a purchase of a rights issue would be represented as a sale?
Yes, I'd agree, that they are acquisitions under the terms of the Rights issue.
Is it possible that the StockMarketWire reports as sales because the executed price is way below the quoted buying & selling prices?
Youve got to be pretty pessimistic not to have taken up the rights.
GFRD was hit hard by the fallout from Carillion, so the sharp fall in SP is understandable as is the need for a RI, however these are essentially one off events. The rest of the company operates profitably and there is no apparent reason why underlying trends should not continue to the benefit of us shareholders. The proceeds of the rights issue will compensate for the Carillion related losses and the yield will be strong even allowing for the RI dilution.
Once the next few months are out of the way, I would expect the direction of the SP will be upwards - maybe even earlier - unless something else adverse is reported.
All IMHO of course.
Sorry, I misunderstood. Thought it was a given that anyone who can would take up the RI.
Having bought in the day before the RI was announced, I am happy to report that having taken up the RI, I am back in the black overall without taking into account the dividend paid yesterday. Now, I intend to wait until the 16th and review matters then.
I too am taking up right issue in full. Nil paid rights shot up 19% on Friday. I am confident that GFRD share price will outperform over the next few months and hopefully a lot longer than that. Even if SP goes sideways yield forecast is 9.3%, covered 1.9X, seems like a very good investment to me from income point of view alone. Risk I suppose is another fixed price contract going bad.
NB 's position is also a reasonable bet.
The only reason I ultimately settled for the cautious approach
was the confusing/contradictory signals coming from the market.
Notwithstanding the fact that it seems the rights issue will be very successful-
and Galliford will be free from any risk of breaching lending covenants or going into administration--
the short positions disclosed- increased from 1.16% to 4.6% between 6th March and 4th April.
Peel Hunt advise BUY with a target of 1620 p.(27th March)
But Peel Hunt are listed as a co-underwriter of the Rights issue.
We certainly will not die from boredom as investors in GFRD!
To offer a different route, to prealsasinger's suggestion. Take up the offer with new money if you a) have cash and b) are not already over exposed. My reasoning being, the fall is likely at least a little overdone, and if you have sufficient faith in a recovery to take up the offer at all, then you will recover any losses more quickly with an enlarged holding.
FYI I am putting my money where my mouth is. DYOR
The answer may be-(assuming you are already a holder)- to sell sufficient shares in the market to fund the taking up of your rights.
I did so.
At least you will not have committed any new money to this uncertain situation.
A simple way of looking at it, that if you take up all your rights, that will keep you with the same share % of the company, and theoretically do better should their strategy pay off. I will take up the rights since I am not overexposed to them, and suspect they will be able to get some cash off Aberdeen local govt, for delays that impacted the consortium. It's a two way street. If they succeed, even getting a modest compensation it will help sentiment. Meanwhile they have moved the goalposts on the completion of AWPR yet again .
"Project Updates for the Aberdeen Western Peripheral Route ...
The Aberdeen Western Peripheral Route /Balmedie to Tipperty (AWPR/B-T) is one of the largest infrastructure projects in Scotland. It's part of Transport Scotland's commitment to improving travel in the north east. The new road will be 58km long and is expected to open in Autumn 2018
Since then they have said LATE Autumn with some interpret at Christmas!
It's a myth that rights issues give existing holders a preferential price over anyone else buying in the market. Anyone buying today below 835p was getting a better deal than someone buying at yesterday's low of 924p.
There's no 'instant gain' to be had by taking up the rights issue because:-
1) The 'gain' is offset by the fall in value of the GFRD shares today as they went ex-rights
2) The 'gain' is much the same as you'd get by selling your nil paid shares. i.e. the cost of taking up your rights isn't just 568p. It's 568p plus the amount you'd have received for your rights, if you didn't take them up (which currently would be about 300p).
If you plan on taking up your rights in full, it makes no difference to you what price the rights are set at. If you don't take up the rights though, the lower the rights price, the more dilution you'll suffer but the more you'll receive from the lapsed rights (in other words, you've disposed of a larger stake of the company).
"Does the level at which they have set the price for this rights issue indicate that £5.68 is what he management consider to be fair value for these shares?"
Fair value for the shares is the current SP plus whatever your rights are currently trading at. They've picked a price of £5.68 which they deemed attractive enough to shareholders to encourage us to buy more shares. The attraction to us is the discount to the previous SP which, all things being equal, should result in an instant gain when the new shares start trading on 16th April.
I've just done a RI for JLG which was similarly discounted (29%) and the new shares are now trading at a similar profit. That's the sweetener to offset asking us to fund the business plan.
FWIW I'm not going to take up all of these rights as I'm too heavy on GFRD already but I will sell enough rights to buy back a portion of my entitlement.
Having held Galliford for years, I have decided that it is time to go. It is clear that the final cost of these legacy contracts is still not certain but will very likely increase. The mismanagement cost has been huge, requiring the rights issue. Construction and house building do not seem to work due a blurred focus
Rights or no rights, the only thing here delivering profit is the housebuilding arm. Why not just buy a house builder, without the overhang of marginally profitable & still high risk massive construction contracts? Plenty pure housebuilders around or no worse & some arguably better prices.
Galliford's SP is holding up surpisingly well, considering it went xd today! There is surely SOMETHING going on, that we dont know about. I would tick 'Hold' if only IIII hadn't wrecked the layout making the button hidden behind the menu line - !diots?
I have 25 shares in an isa. And another 'portfolio' of about the same number that I am just keeping an eye on. That's almost too much to keep tabs on. I also have trouble disposing of the dogs. Hence the is a lot of red in my current holding, but since I have sold a number of successes, it looks worse than it really is.
The annoying thing is that the ones I have an eye on always seem to do better than my actual holding. I too have been investing for about 40 years, but still get it wrong often. My bottom line is good profit, but it could have always been much better.
Apparently the human mind hurts twice as much at a loss compared to the equivalent gain. For example, you have to profit £10,0000 to counter the sadness of losing £5,000. This is well illustrated by the behavior of contestants on the show "Deal or no deal" It is ironic that it is reported that Noel Edmunds was suicidal after massive losses and he was in the hands HBOS! That is definately attaching too much importance to money.
I sympathise. I have a small handful of shares that are worth very little in total and I hold them in a portfolio labelled 'junk'. Not worth the selling fees and all others are held in isa so no CGT offset benefit to be gained on the losses.
tommy talent, you have misunderstood me. I have 43 share holdings that are worth MORE than £1,000 each (so obviously a minimum of £43K, very bad form if I gave any more detail). I have shares in three companies (EXI, GKP and AGQ) that the holding I have are each worth £913, £36 and £4. I should sell EXI shares and give to charity GKP and AGQ so I can forget about them and move on.
Important message from the Financial Conduct Authority:
Posting inside information that is not public knowledge, or information that is false or misleading, may constitute market abuse.
This could lead to an unlimited fine and up to seven years in prison.
If you have any information, concerns or queries about market abuse, click here.
The content of the messages posted represents the opinions of the author, and does not represent the opinions of Interactive Investor Trading Limited or its affiliates and has not been approved or issued by Interactive Investor Trading Limited.
You should be aware that the other participants of the above discussion group are strangers to you and may make statements which may be misleading, deceptive or wrong.
Please remember that the value of investments or income from them may go down as well as up and that the past performance of an investment is not a guide to its performance in the future.
The discussion boards on this site are intended to be an information sharing forum and is not intended to address your particular requirements.
Whilst information provided on them can help with your investment research you need to consider carefully whether you should make (or refraining from making) investment or other decisions based on what you see without doing further research on investments you are interested in.
Participating in this forum cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you.