Well, BB here's another difference between us. Yesterday I fairly summarised your point of view (market's aren't efficient especially in small caps, possible to spot profit opportunities etc) and then explained why I disagreed.
In contrast you make childish, personal and insulting comments perhaps not realising that to a neutral reader this not makes you look like a small person, with ego issues and a thin skin but also undermines the power of your case - if it's so strong, which misrepresent what the other guy says and why try to insult them?
I have never said markets are perfectly efficient. What I have said is the market - aggregating lots of different views and thousands of trades -is more likely to reflect the intrinsic value of a share than the opinion of some mug punter (you or me) on this board. Can you understand that point? It isn't complicated.
Given your strong recommendation at double today's price and having told us all you bought at 185p one might have thought you would display some modesty and admit you can be wrong, as you quite clearly have been on this discussion board. But modesty and admitting possible error doesn't appear to be your style.
Much of what you say is consistent with some of my earlier posts. I currently do not hold any WGB shares but it is a share that I originally inherited from my grandfather so I have been following it for many many years, and according to my records my peak holding was 73,317 shares on 6.10.2010 and the wife some 90,535 shares - if only I had waited for the £2 a share price!!. I used to do some very thorough research including a previously arranged visit to the WGB shop in New York (whilst on holiday!) to understand their different market model there!
Now there were some special reasons why I bought so many shares at that time. I bought as low as 7.24p on 2.4.2009 - but multiple top-ups to around 20p and then started to progressively sell above 50p a share to lock in the profit, rebalence the portfolio and because the risk reward balance was no longer so attractive. Why was the price so low and why did I buy so many shares? The answer is partly because I perceived green shoots of a turn round with the very fortuitous purchase of Sanderson at a knock down price, partly that the price was getting 'silly' (John Sach told me later that the institutions also held that view and also topped up), the reward looked enormous compared to the potential loss, most institutions would have been forbidden to buy the share with such a low market value, and most importantly another investor was buying in concert with me at the same time using level 2 data to buy the available share offerings - our very modest purchases revealed a chronic shortage of shares and we kept on buying up to 13p a share over the next week. Come Sept 2009 the results were looking very encouraging so I had another buying spree.
Coming back to your point about the market price - agreed that this may apply to heavily traded shares, but minnows can be ignored and stay moribund and drift down until something of real note crops up. I had a similar experience with my 10 gonger with Western Canadian Coal.
Why did I sell out? Mainly to lock in profits and because so much assumed profit growth seemed to have been written into the share price. That said WGB seemed to keep throwing the dice and kept on rolling a six. The recent trace back to my mind was a reality check with some faltering sales. I did briefly dip my toe in again in December 2017 but decided to settle on a quick £300 profit in 5 days.
My current view is that WKB is approaching my buying range, but I hold a concern that the housing market and in particular in London high value properties, is stagnating - and so WGB could be entering a down side of this cyclical industry. The significant fall in the value of the £ should help export sales, however much material is sourced abroad, such as from Italy, so it is not a straight forward equation. What really excites me is the significant progressive increase in the licensing income.
I had better end my waffle to say that I used to work in the aerospace industry and now do post graduate research in astrophysics - but have always had an interest in shares.
By the way when you say "Director Buys are about the only indicator which consistently outperforms the market" do you have evidence to support that claim? Many studies have found no such relationship and if it exists we'd simply create a fund which buys shares every time a director does (and presumably sell or short when directors sell) and it would be the best performing fund ever. I wonder why that's not the case.
In the case of WGB if it's such an obvious bargain why aren't the directors buying? I could be wrong but I did a quick scan back three years and I can't see ANY directors buying shares (excluding exercise of share options).
Just for amusement when I did a Goole search 'director dealings' +'outperform' the very first article which comes up (from Mail Online) starts "The HBOS board waded into the market to buy stock - a move that steadied the nerves of investors and prompted frenzied trading, sending the shares soaring 17% at one point on Monday". That went well, didn't it? A few months later and it was bust.
Oh dear, sounds like I have touched a raw nerve. A pity if you're offended by views which don't coincide with your own but it's a discussion board so if you don't like it, go elsewhere. When you say "I also wonder why you post on a board when you are so negative about a stock." are you suggesting a discussion board should only be host to those with a positive view of a share? Not much of a discussion really - 'I like this share', and 'I LOVE this share'. Personally when I own a share I'm much more interested in reading the views of those who don't or who think it is overpriced than the cheerleader crowd yelling 'go on my little beaut'. But maybe your ego is so fragile you need to see people agreeing with you. That's an echo chamber BTW.
I'd place a large bet I've a better understanding of financial markets then thou. Ever been a market maker? Or managed a pension fund? No, didn't think so.
And yes I do tend to ignore buy and sell recommendations. Do you take them seriously?
My point was - and is - that the current share price is a better indicator of value than some mug punter who thinks he's smarter than everyone else. I'd say that of anyone. But in your case as you thought they were a bargain at double today's value and bought shares 65% above today's price it's even more the case.
And yes, that's looking back but because I have not yet completed the construction of my flux capacitor time travel machine, I can only judge you by what you have said in the past (an endless stream of bullish sentiment, while the share price headed south) and not what you do in the future. But somehow I don't think we'll be hailing you as the new Sage of BrownTown any day soon.
Hugh - thanks so much for your patronising advice. It is almost as if you have read a book on how the stock market works - your insight is incredible. I was particularly fascinated by the thousands of trades that determine that a stock is fairly priced at any point in time. So insightful on the workings of AIM stocks - I hadnt realised they traded so frequently. I wonder if you look at every buy or sell recommendation and think that the market knows best so this opinion is pointless. I always also enjoy how perceptive you are after the event and your ability to plot a chart of share performance in the past - as if it were an indicator of share price in the future. I also wonder why you post on a board when you are so negative about a stock.
In reality, these small AIM stock are covered by 1 or 2 analysts only who themselves are covering dozens of companies in superficial detail. they may have met management in person once or twice. They may have visited a factory. They are unlikely to understand what they are looking at. So forgive me if I think the market is imperfect.
For what it is worth, I invested in this stock over 10 years ago following directors buys - I am not sure if you got to that chapter yet HB but Director Buys are about the only indicator which consistently outperforms the market. I am up around 100% on my investment. But clearly I could be up much more if I had sold at a peak (derr why didnt I think of that. I wonder if there is any book that tells investors whether it is good to sell at the peak?). As I have followed the business over at least 10 years I have seen steady progress and good management. In fact I have worked with some of the senior management team here in the past and I think the individual concerned is capable . Decisions have largely been good. The business has been hit by events - insurance claims - rebuilding factories - largely they have handled these issues well. The insurance claim recovered losses and replaced old equipment with new in timely fashion - I call that good management.
The management clearly performed less well on their brands in the past couple of years, but they appear to have a plan - they have replaced senior management - I think this is a reasonable response.
So what is my investment thesis - simple - it is good management with a track record will work their way through the current problems and put the business back on a steady footing. Of course there are other approaches to investment - no doubt they all have their merits. But Hugh - perhaps you need to try to read another chapter in your book about how markets really work.
I beg to differ. I usually buy trackers/ETFs and have said so but occasionally buy shares in company (like Halma) which I think is quality and has strong management and which I expect will continue to do well over the long term. I don't think I have ever claimed to spot a share which is divorced from its economic performance or one which I can see is substantially undervalued but which the market (I.e. no one else) has not spotted because both propositions are quite obviously (a) nonsense and (b) hubris.
And as I have said, the guy claiming to do this magic trick is the same guy who is down 50% from just one of his relatively recent 'strong buy' recommendations for WGB, so what evidence is there he's got any stock picking skills whatsoever.
Get rich slow - follow the market, diversify, buy quality companies if you must buy individual shares at all. This isn't one of them.
Re "I'd characterise it rather differently. On the one side we have someone who believes the share price and economic fundamentals are (or can be) independent of one another and that a share price might not reflect a company's future prospects. It follows that this person thinks he can determine when such situations exist and buy shares which are 'cheap' and likely to move up substantially, providing exceptional profits."
Well, you've just made a compelling argument for either :-
1. Long-term buy and hold of good companies and / or
2. Just buying index-trackers
Both of which are decent enough strategies, but, a quick look at your posting history suggests that you think you are able to spot opportunities and beat the market, which is really all that winningstreak and Biscuit Barrell are trying to do.
It seems to me that you don't practice what you preach and are pretty much cut from the same cloth !
As to whether or not now is a good time to buy shares in Walker Greenbank, then no-one really knows, but if there weren't opposing views, then the market wouldn't work very well.
I'd characterise it rather differently. On the one side we have someone who believes the share price and economic fundamentals are (or can be) independent of one another and that a share price might not reflect a company's future prospects. It follows that this person thinks he can determine when such situations exist and buy shares which are 'cheap' and likely to move up substantially, providing exceptional profits.
And I think that's largely nonsense. For at least two reasons:
(1) the share price is an aggregation of thousands of trades made by hundreds if not thousands of investors seeking to maximise profits, many managing £ millions or billions of equities. All the evidence suggests the share price discounts available information.
(2) the notion that some punter (him or me, I'm not being personal) can look at a share price and divine that it is cheap and offers exceptional profits but the rest of the market cannot is pretty obviously nonsense. And as I have said in this particular case the person in question thought they looked cheap and were a 'strong buy' at twice today's price, so the observable evidence is that his ability to see this fantastic buying opportunity and when WGB shares are 'cheap' is non-existent. In fact it's worse than that: the evidence suggests his analytic ability is worse than a random throw of the dice.
It doesn't particularly matter if I think this company is good or bad (although the fact the board can't write English does not inspire confidence) its just that if people think they can look at the accounts and discard the evidence embedded in the share price then they are deluded and in time will loose money, maybe all of it.
Well, I suppose this thread shows pretty much how the market works.
On one side, we have a negative viewpoint, from someone who doesn't like the company's prospects, or the sp being at half of what it was not that long ago, and, on the other side, we have someone who sees the positives going forward, and sees the current sp as an opportunity
Both views are valid, and the market generally sets a sp according to which view is most prevalentat at the time.
fwiw - I think there's a recovery possibility here, so I bought a few today ( at 115p ), so I plainly fall into the "possible recovery play" team, but that recovery might not happen in the timescale I'm hoping for ( 12 to 18 months ) so I could have just made a poor investment decision.
For example, Biscuit, just over 6 months ago you thought this share a "strong buy". Anyone believing you are able to spot a bargain when you see one would have paid almost exactly double today's price and lost half of their investment.
So you'll forgive me if I don't buy this 'spotting hidden gems amongst the small cap sector' story. The market is a much better indicator and measure of value than you or I.
Ah the 'small stocks are different' argument. But one presumes that if some punter on Interactive Investor can spot that a share like WGB is clearly undervalued and buys them, so too can anyone and everyone else, in which case it can't be undervalued anymore.
Added to which some of those claiming this share is undervalued are the same folk who thought it was cheap when the shares were well north of 115p, so their analytic powers don't seem very impressive, do they?
Look like we'll have to agree to disagree. The share price in a developed liquid market discounts all the available information, which includes past performance and future expectations. It's certainly a better indicator of intrinsic value than one punter (that's you or me, not being personal here) with a calculator and a strong opinion.
If it's so obvious to you when a share price is disconnected from reality then you should be as wealthy as Buffett, which I assume is not the case.
Many a share bought in a deep dip has outperformed the
market. Charts often do not correctly reflect the company's
performance, they often reflect sentiment more than
WGB's profit this year is expected to be much the same as
last year (see management's statement at H1 Results)
and that is despite the lower sales in H1. The growing
income from franchising makes up for the temporary
reduction in sales.
Jolly cheap shares at currently 108p, IMO.
A slightly silly response if I may say so on at least three levels:
(1) the share price doesn't lie - it's the fundamental arbiter of a company's performance
(2) the share price anticipates future performance and cash flow generation, so if historical performance has been strong but the share price tanks, there's a reason for that
(3) we're investors. This is an investment bulletin board. At the end of the day it's irrelevant if (very hypothetically) a company performs like a stallion if the shares perform like a dog - from an investors' perspective its the share price that matters not a set of accounting numbers (which may be misleading or even fraudulent in any case)
As an aside, the company has not performed strongly on fundamentals in any case - EPS is lower than it was four years ago and interim earnings down 18%, against a buoyant economic backdrop. Not exactly shooting the lights out. More poodle than Grand National winner.
This is a chart of share price not of company performance. Obviously related but nevertheless completely different issues. Over a 10 year track this has been a very well managed business with steadily improving performance across all performance measures. In the past couple of years the business has hit operational issues and market challenges. Clearly the brand management was not what it should have been.
The only relevant question is where does this go now? Will management turn this around? What will happen to markets for their premium products?
Generally I have some confidence in management over the medium term to turn this around operationally as brands are strong and manufacturing facilities are well invested following the insurance claims. But I have concerns that the market will be slow to give management credit given the recent disappointments.
So we're agreed the statement was wrong and makes no sense. In which case one has to ask oneself, if they can't write a simple statement (probably the most crucial part of the whole thing) what faith can one have in their ability to turn this wreck around?
Should have stated: "Below the Boards earlier expectations, but current
year's profit still to be above last year's profit".
Last year's profit was good, so a bit better this year will be just fine.
Look at the low PE-ratio, look at the rising handsome Dividend.
WGB is currently seriously undervalued, IMO.
The language is not "absolutely standard" because it is wrong. What they meant to say is that full year results are now expected to be below the board's previous expectations. They can't say they expect something to be lower than their current expectations as that's clearly circular. Well, they can but it's obviously nonsense.
Maybe that's what they meant but it actually says the board expects results to be below their current expectations. Which makes no sense. If they can't even draft a results statement which makes sense, is it any wonder the share is on its knees? What are Buchanan and Investec being paid to sign off such nonsense?
How can the company put out an announcement which - on it's first page - says "the Board expects that profits for the full year will be ahead of last year's but below current Board expectations".
If they expect lower profits that must be there current expectation. The statement makes absolutely no logical sense. Who writes this drivel? Does no one check it? Based on that alone, I won't be buying shares in this company.
Results look good to me. Even the outlook looks good
enough considering the anticipated fast rising income
from the highly lucrative licencing part of the business.
In my view the shares are currently very cheap at 127p.
Could easily rise to 150p+ over the coming months, IMO.
Discounting sales from the acquisition, I would suggest the trading performance of the 'original' WGB is a bit indifferent. Not sure how much this was affected by the fire at Loughbrough. Colefax reported recently and they had some impressive increase in sales to the US - I am not sure if WGB's sales the US have grown that much, albeit a relatively smaller proportion of overseas sales compared to CFX. With last night's big stock market falls in the USA and far East, I am not sure that this trading statement is going to help WGB's share price much today. I am just going to my 'dug-out' to see what happens today on the LSE!
Why should n't poor sales continue into next financial year?What is so special about 30 Jan 2018,start of next financial year,that everything will revert to previous levels?
Was the good demand that the up market products from Standfast factory had enjoyed in the first 9 months of this year the exception perhaps because their products had been in very short supply for the year previous year due to the closure of the Lancaster Standfast factory and merely pent up demand and things have reverted to a more normal demand?After all the feeding frenzy in buying over priced London flats which require kitting out by "investors" in the hope that they could flip them for even more has ground to a near halt certainly would have helped sales.
The Far East "investors" are buying Bitcoins instead!
I thought the shares were expensive at 200p level based on previous figures;Maybe they are reasonable value at present level IF we see an uptick in sales in the near future but it is far from a certainty.The new price may be the right price at best.
IMHO the fire is not the issue. If the maximum profit impact is £0.5m then the indication here is that this is small, some unwelcome distraction, another insurance claim, etc, etc but not a sell signal.
The shares look oversold based on the information shared with us shareholders. A few months of poor sales performance highlight the vulnerability of the business to economic fluctuations but do not halve the value of the business which wasn't trading on aggressive multiples in the first place.
The loss of brand director suggests that the business executives believe that there have been mistakes made and that these can be rectified. Appointing new marketing execs does not lead to immediate changes in fortune , but I believe these brands are pretty resilient and can recover any lost ground. Is there a lot of lost ground? Well there cant be that much given that trading was ok 6 months ago.
So I for one expect the recovery to continue allbeit the 230p share price may not be back for a while
RNS now out:.Spread 126-128p. Volume 502k. A bit of bargain hunting now. WGB seem to be playing down the consequences of the fire claiming that profit loss <0.5m (now that does not sound like a small fire to me!). WGB now seems to be accident prone and that is a bit worrying, plus apparently firing the brands director (so my industry source believes) due to losing their way. Now 127-128p. All the best for those holding on.
"Update re Anstey Wallpaper Company
Walker Greenbank PLC (AIM: WGB), the luxury interior furnishings group, announces that a minor fire at approximately 22.00hrs last night at the Company's Loughborough wallpaper factory, Anstey Wallpaper Company, has damaged one of the factory's printing machines.
Whilst the fire was minor, it is too early to know when the damaged printing machine will be back in production and if there is any potential impact on the Company's performance for the current financial year ending 31 January 2018.
Dependent on the timing of repair, some of the orders planned to be printed on the machine might be delayed into the new financial year. The maximum potential impact on profitability in the current financial year is expected to be less than £0.5m.
The repair to the printing machine, and damage to a small amount of stock, are covered by the Company's comprehensive insurance policy.
The Company will issue a further announcement as soon as possible."
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