Quality at a Reasonable Price

[simoan]

No idea. That would be above my pay grade Probably another institution when you see blocks of 140k go through. No big deal either way but these kind of things can suppress the share price for a while. If we’re really lucky it’ll be the acquirer the IC warned us about

An institutional buyer is suppressing the share price?

Fair enough...


GS
[EDIT: Not being funny, I'm not good at interpreting these things and to me that explanation makes as much sense to me as the previous one.]

I’m no expert either but I’ve been told that sometimes two institutions agree for one party to sell a holding (or partial holding) to the other party through a negotiated trade at volume above the normal market size. These trades still have to go through the market but the price is normally agreed and there is normally no (or little) premium to the prevailing market price. If the buying party had to go into the market to buy they would drive the price up, particularly for a small cap share that is relatively illiquid, like Wilmington. Sometimes there are signs of this e.g. today’s 75k and 142k trades were shown as OB (Off Book) i.e. they don’t go through the order book. The latter is a sign of a privately negotiated trade, probably between two institutions. I’m sure dealtn could correct my understanding of this…

[GoSeigen]

An institutional buyer is suppressing the share price?

Fair enough...


GS
[EDIT: Not being funny, I'm not good at interpreting these things and to me that explanation makes as much sense to me as the previous one.]

I’m no expert either but I’ve been told that sometimes two institutions agree for one party to sell a holding (or partial holding) to the other party through a negotiated trade at volume above the normal market size. These trades still have to go through the market but the price is normally agreed and there is normally no (or little) premium to the prevailing market price. If the buying party had to go into the market to buy they would drive the price up, particularly for a small cap share that is relatively illiquid, like Wilmington. Sometimes there are signs of this e.g. today’s 75k and 142k trades were shown as OB (Off Book) i.e. they don’t go through the order book. The latter is a sign of a privately negotiated trade, probably between two institutions. I’m sure dealtn could correct my understanding of this…

Okay, I follow that I think, assuming that by "market" in all cases you mean the exchange/prices being quoted on the exchange. So that the negotiated trade is separate from what is happening on the exchange and therefore at a price the same or different to "the prevailing market price". So far so good.

But then what I wonder is why you identified the initial presumed institutional seller as having made the "wrong" trade, i.e. they are selling when the price is about to rise in your view. That's why I asked if it was a contrarian call -- do you consider institutions as typically buying/selling at the wrong time? Or just this particular one? My usual inference would be that if an insto is selling then it's likely retail traders are buying and the price is more likely to fall thereafter, not rise. Only because it seems to me instos are more likely to be smart money than dumb money... but that may be naïve on my part.

GS

[simoan]

I’m no expert either but I’ve been told that sometimes two institutions agree for one party to sell a holding (or partial holding) to the other party through a negotiated trade at volume above the normal market size. These trades still have to go through the market but the price is normally agreed and there is normally no (or little) premium to the prevailing market price. If the buying party had to go into the market to buy they would drive the price up, particularly for a small cap share that is relatively illiquid, like Wilmington. Sometimes there are signs of this e.g. today’s 75k and 142k trades were shown as OB (Off Book) i.e. they don’t go through the order book. The latter is a sign of a privately negotiated trade, probably between two institutions. I’m sure dealtn could correct my understanding of this…

Okay, I follow that I think, assuming that by "market" in all cases you mean the exchange/prices being quoted on the exchange. So that the negotiated trade is separate from what is happening on the exchange and therefore at a price the same or different to "the prevailing market price". So far so good.

But then what I wonder is why you identified the initial presumed institutional seller as having made the "wrong" trade, i.e. they are selling when the price is about to rise in your view. That's why I asked if it was a contrarian call -- do you consider institutions as typically buying/selling at the wrong time? Or just this particular one? My usual inference would be that if an insto is selling then it's likely retail traders are buying and the price is more likely to fall thereafter, not rise. Only because it seems to me instos are more likely to be smart money than dumb money... but that may be naïve on my part.

GS

You never know what institutions are doing but normally when they sell it is nothing to do with the prospects of the company and I have found in the past that makes it a good time to buy. In this case it is neutral because it looks like a straight swap between two of them. I don’t pay much attention to volume but my Sharescope screen flags when daily volume is well above the 90 day average as it’s a sign that something of interest may be happening. Every time I buy or sell I am being contrarian because I am saying the market price is wrong and a company is too cheap or too expensive, so I don’t understand your point. Anyway, it looks like WIlmington agree with me the shares are cheap as they have announced a small £5m share buyback that starts today. I’m not aware they have ever done a buyback before…

[GoSeigen]

Okay, I follow that I think, assuming that by "market" in all cases you mean the exchange/prices being quoted on the exchange. So that the negotiated trade is separate from what is happening on the exchange and therefore at a price the same or different to "the prevailing market price". So far so good.

But then what I wonder is why you identified the initial presumed institutional seller as having made the "wrong" trade, i.e. they are selling when the price is about to rise in your view. That's why I asked if it was a contrarian call -- do you consider institutions as typically buying/selling at the wrong time? Or just this particular one? My usual inference would be that if an insto is selling then it's likely retail traders are buying and the price is more likely to fall thereafter, not rise. Only because it seems to me instos are more likely to be smart money than dumb money... but that may be naïve on my part.

GS

You never know what institutions are doing but normally when they sell it is nothing to do with the prospects of the company and I have found in the past that makes it a good time to buy. In this case it is neutral because it looks like a straight swap between two of them. I don’t pay much attention to volume but my Sharescope screen flags when daily volume is well above the 90 day average as it’s a sign that something of interest may be happening. Every time I buy or sell I am being contrarian because I am saying the market price is wrong and a company is too cheap or too expensive, so I don’t understand your point. Anyway, it looks like WIlmington agree with me the shares are cheap as they have announced a small £5m share buyback that starts today. I’m not aware they have ever done a buyback before…

Interesting post, plenty to think about there.

GS

[doug2500]

It's also entirely possible in the current climate that someone is suffering redemptions and needs to offload what they can without getting smashed on price.

There's obviously an equal buyer though, although they may be unwilling to get carried away on price and are only interested if they get a bulk at a price.

I'm not sure if the shares are quite cheap enough that I approve of a buyback, but at least they're cheaper than they were which is often not the case with buybacks.

[simoan]

It's also entirely possible in the current climate that someone is suffering redemptions and needs to offload what they can without getting smashed on price.

There's obviously an equal buyer though, although they may be unwilling to get carried away on price and are only interested if they get a bulk at a price.

I'm not sure if the shares are quite cheap enough that I approve of a buyback, but at least they're cheaper than they were which is often not the case with buybacks.

Yes, there’s lots of fund redemptions, particularly in UK Small and lower end Mid Caps currently. Even this morning we’ve seen an institution needing to offload a 5% holding in MEGP via a secondary placing which has provided a 10% discount to the price last close. I took a few at 199p because it’s a good GARP share with no debt and a clear way of growing by accelerating the roll out of the laundry business.

With regard to Wilmington, a £5m buyback is small beer given we know they are on course to have net cash of £45-50m by end of July. It shows willing but the main event is deploying the cash to fund acquisitions.

All the best, Si

[monabri]

Clarkson ( not The Jeremy) fell heavily today...prelim results below.

One of Mr Train's latest additions to his portfolio.


Prelims 10 March 2025 https://www.investegate.co.uk/announcem ... s-/8770048





The shareprice focused on the CEO's comment



Source https://engine-5.sharescope.co.uk/SSWeb ... A6B27F369C



Maybe a consideration?

[simoan]

Clarkson ( not The Jeremy) fell heavily today...prelim results below.

One of Mr Train's latest additions to his portfolio.

Maybe a consideration?

It fails the QARP screen on lacklustre growth in Sales (< 2%) and EPS (< 5%). Can’t see that improving in the next financial year given the comments today. Looks a bit touch and go as to whether they will not actually see sales and earnings drop YoY. It’s been a good investment over the years but I personally avoid companies where so much of the profits accrue to the staff as bonuses. If the latter were not the case you’d be looking at a company capable of paying a 5% dividend yield. You need to look at the accounts, the amount of cash profit that goes to staff as bonus payments is quite extraordinary.

[doug2500]

I grabbed the opportunity to start a position in AJ Bell this week, it's only small as things are so volatile, and I only have a little cash to play with.
FWIW I topped up Tracsis, Volution and F W Thorpe too.

I have very little cash to play with now so I for one kind of hope Trumps done for now and will go back to plotting against Greenland or chasing adult film stars (although I'm sure one of those would also cause markets to take fright).

@Simoan I'm trying to remember a company you have talked about, I think it may have been in defense, or industrial and I just can't find it in any topics. It may have been Cohort but I don't think so. Do you know who I mean?

[simoan]

I grabbed the opportunity to start a position in AJ Bell this week, it's only small as things are so volatile, and I only have a little cash to play with.
FWIW I topped up Tracsis, Volution and F W Thorpe too.

I have very little cash to play with now so I for one kind of hope Trumps done for now and will go back to plotting against Greenland or chasing adult film stars (although I'm sure one of those would also cause markets to take fright).

@Simoan I'm trying to remember a company you have talked about, I think it may have been in defense, or industrial and I just can't find it in any topics. It may have been Cohort but I don't think so. Do you know who I mean?

I’ve not been buying much to be honest. I bought some more Spectra and Fonix before I left for a break in Spain, but that’s it. Also sold my SPT holding as I got cold feet that the Chinese would block the Keysight acquisition, which they may still do. If I’d been home and actively investing, I would have bought some more JD Sports on the midday trading update the other day, but that’s about it. I notice there are already companies pulling earnings guidance given the lack of clarity over tariffs and it looks like there will be another 90 days of uncertainty at least, so I’m probably just going to sit on my hands unless I get handed some obvious stunning bargains. I’m 18% cash currently.

Sorry, I’m not sure what the company was that I discussed previously. I currently only own BA. and QQ. in defence sector although I did own Ultra Electronics before that got acquired. I missed out big time on Cohort for the stupid reason they bought one of my former customers and I wasn’t really convinced that was a good idea. Turns out it was!

All the best, Si

[doug2500]

It was Rotork!!

It was bugging me and I decided to scroll through all companies on the Stock challenge website. I didn't have far to go, it's just outside the FTSE 100.

[simoan]

It was Rotork!!

It was bugging me and I decided to scroll through all companies on the Stock challenge website. I didn't have far to go, it's just outside the FTSE 100.

OK. Yes, I remember some brief discussion with DrunkenMarcus on one of his threads a while back. It’s a good quality company and debt free, just started a share buyback too. I still hold but won’t be adding until the effect of tariffs becomes clearer. I think it’s particularly difficult to work out what the longer term effects may be for industrials with overseas factories and the supply chains they supply into. Same goes for another holding, Diploma.

FWIW Rotork and AJ Bell both meet the GARP filter requirements currently. Along with Next, IG Group, FRP Advisory, Softcat, Yu Group, Foresight Group, MONY Group, Wilmington, Tatton Asset Management and Polar Capital. I hold six of those already.

All the best, Si