Sportingbet, losing its shine?

What with the potential takeover of Sportingbet by William Hill and GVC Holdings still in limbo you might think that producing a poor set of results could be a negative on proceedings and explains a little why the company share price has fallen to around 45p. Actually, for the purpose of the takeover, parts of today's results are probably welcomed better than others.

The BBC reports;

Online gambling firm Sportingbet has reported a fall in first quarter revenues citing "challenging" conditions."

European online poker revenue collapsed nearly 50% reflecting "continued structural decline" of the game, the company said.

The total amount wagered in the three months to 31 October fell to £594.3m, compared with £693.7m for the same quarter last year.

Group revenue fell £21m to £38.8m.

Group chief executive Andrew McIver said: "It was a challenging first quarter but a very strong November".

Sports margins in Australia had been "particularly strong", the company said, after a 29% increase in active customers and rapid growth in the amount being wagered via smartphones and other hand-held devices.

http://www.bbc.co.uk/news/business-20551977

Looking at that report again we see the word "challenging" being used quite a bit (key words in company reports). Could it also be a signal of challenging conditions for the likes of William Hill and Ladbrokes when they next report? Perhaps not, but 2013 might not be as rosy for them as recent times. (Panorama, undercover in the bookies)

However, it was reported before that William Hill were particularly interested in the Australian growth side of the Sportingbet business and they will look at the "particularly strong" results there with interest. Sportingbet investors hoping for that 60p+ pay off may be hoping that the takeover gets sorted sooner rather than later.

Monitise update - placing is on the cards

When I first wrote about this one a while back I made the point that it wasn't one for widows and orphans, today perhaps shows why. The company announced to the market that it is looking to raise £100 million extra capital, it would seem to expand. The statement was full of positives, but the market seems to have taken a dislike to the news falling around 9% so far. Monitise investors might live with that had it not been for the fact that it has already fallen from a recent high of almost 40p to around 33p before today's news. Looks now that it may well fall below the 30p mark.

Mobile banking technology firm Monitise has admitted it is in discussion to raise up 100m pounds. 

The company said it was talking to Canaccord Genuity and certain institutional and strategic investors "to take advantage of significant opportunities represented by mobile banking, payments and commerce". 

Proceeds from the proposed placing would be used to fund new Mobile Money products for financial institutions and payments companies, the firm said, particularly in terms of mobile commerce capabilities. 

The announcement was forced by press speculation into Monitise's plans to raise money. 

Chief Executive Alastair Lukies said the business was seeing enormous demand for Mobile Money services. 

http://www.digitallook.com/cgi-bin/dlmedia/security.cgi?csi=233171&action=news&story_id=20531938

The trading update was also impressive in terms of potential;

Wood Group sell off, one to watch.

The FTSE100 is feeling slightly more cheery today with the hope of a fiscal cliff deal coming sooner rather than later, but one company is not sharing in the cheer, Wood Group. The oil services company was recently promoted from the FTSE250, but hasn't really shown much in terms of share price performance. However, the price is down around 4% as of writing because of some family selling.

Wood family trust and members of the Wood family have sold 4.4% - 16.3m shares which represent their total stake - at 775p each through Credit Suisse, raising around £126m. Sir Ian Wood, the departing chairman and grandson of the company's founder, said he had no current intention to sell his 2.4% shareholding.

The news has sent Wood Group's shares down 33p to 782p, a 4% decline which makes them the biggest faller in a rising FTSE 100. But Oriel Securities said this was a good opportunity to buy into the company:

Overall we think [its] strong international position in offshore facilities, subsea and production support leaves the company well placed to take advantage of increasing industry spending.

Andrew Whittock at Liberum Capital kept a hold rating and said:

Given the family's apparent lack of interest in the business we would not read anything into this share sale.

http://www.guardian.co.uk/business/marketforceslive/2012/nov/29/ftse-eurozone-us-wood-group

Not more fiscal cliff worries surely? Or even hope?

So, the market news has again been dominated by fiscal cliff worries that either go up or down depending on fears of not enough progress being reported, no news at all, or grabbing the occasional statement from a participant that gives a little hope. Markets the last couple of days have been going up on this hope.

Last night US stocks pared losses after Republican Speaker of the House John Boehner said that he was “optimistic that we can continue to work together to avert this crisis sooner rather than later.” He said that Republicans were willing to put “revenue on the table” as long as it is accompanied by spending cuts. 

Furthermore, Obama told the public in a press conference the same day to pressure Congress to act to avert the automatic tax increases, saying: “When the American people speak loudly enough, lo and behold, Congress listens. 

“So today I’m asking Congress to listen to the people who sent us here to serve. I’m asking Americans all across the country to make your voice heard.” 

http://www.digitallook.com/cgi-bin/dlmedia/security.cgi?csi=50058&action=news&story_id=20531224

You can, more or less, read whatever you want into these statements. Boehner is basically saying what he has said before, taxes are on the table as long as there is give on spending cuts. No one knows how big a "give" though, or whether the price of Republican support on tax hikes for the rich, means much bigger cuts in more Democratic supported social programs. Obama's appeal to the people can also be seen as a negative, suggesting that he wants to put pressure on Congress from voters to get the deal done. The positive side is that both are still talking sooner rather than later on a deal, but they've only got a few weeks to do it.  After that, no deal and you can be sure that the markets will throw another fit of displeasure and probably head south.

The markets do seem to be in a set pattern of behaviour when it comes to picking the potential crisis as an excuse for the latest sell off.  All of these crises, at least since 2008, never quite reach absolute crisis proportions, but do enough to leave uncertainty, much of it more to do with the markets own fears of what potentially might happen rather than what actually does happen.

FTSE100 - running on or out of steam?

As we start a new week it will be interesting to see if the markets can maintain the upward momentum of last week as we go in to December. I've added the momentum indicator to this chart which suggests that the current bounce is somewhat weak. If we are going to see a December rally that leads up to a Santa rally then the markets will probably need to find some good news from somewhere. An early US fiscal cliff deal will probably seal it, but right now the current move looks weak with price hanging around a faltering 50dma. If there is any conviction in last week's move then any pullback needs to be a small one, perhaps not much lower than 5700. Anything below 5650 could indicate a bigger downward trend in place.

FTSE100

 

Video market round up for week ending 23rd November

A week ending round up of the markets from Steve Briggs YouTube channel.

A review of the markets for the last trading week, including FTSE100, S&P, Dow, Dax and CAC. This week also includes a look at UK FTSE100 shares, SABMiller, Vodafone and Barclays.

Links:

Steve's YouTube site http://www.youtube.com/user/sjb5555.

FTSE100 - where next?

FTSE 100 has bounced a little from the falls of last week, is it of the dead cat variety before falling further or a signal that it still wants to go higher? The FTSE hasn't fallen as much as the US markets and even though we have a 20/50 crossover to the downside on the chart it could be leveling off and hasn't been that steep. MACD is also heading upwards, but is still below the zero line. The chart still looks negative, but could go either way at the moment.

And we could be setting up for a Santa rally.

FTSE100

Moody by name, moody by nature, who'd trust a ratings agency?

So, no great market reaction to the downgrade of France by the ratings agency Moody's yesterday.

France said its economy was sound and reforms were on track after credit ratings agency Moody's stripped it of the prized triple-A badge due to an uncertain fiscal and economic outlook.

Monday's downgrade, which follows a cut by Standard & Poor's in January, was expected but is a blow to Socialist President Francois Hollande as he tries to fix France's finances and revive the Euorzone's second largest economy.

"The rating change does not call into question the economic fundamentals of our country, the efforts undertaken by the government or our creditworthiness," Finance Minister Pierre Moscovici told a news conference on Tuesday.

http://uk.reuters.com/article/2012/11/20/uk-france-moodys-idUKBRE8AI17I20121120

Video market round up for week ending 16th November

A week ending round up of the markets from Steve Briggs YouTube channel.

A review of the markets for the last trading week, including FTSE100, S&P, Dow. This week also includes a look at UK FTSE100 shares, Royal and Sun Alliance, Vodafone, SSE and ITV.

Links:

Steve's YouTube site http://www.youtube.com/user/sjb5555.

Is the market setting up for a Santa rally?

Well, it's back to all doom and gloom right now, after all, the markets were not aware of the prospect of a fiscal cliff in the US a few weeks ago were they. That is of course cynicism, but this is the way markets seem to behave, from almost one extreme to another. One minute the market seems to think that the problems out there are going to be solved, any bad news is brushed aside, etc, markets are going up. Next minute, everything is suddenly gloomy again, good news is ignored, put to one side or overlooked in favour of a bit of doom. The bears and gloom and doomers' are back in force, not that they ever go away, but there has been a change in recent weeks that supports the more negative stance.

Charts were telling us of this potential change in trend a few weeks back, the spring/summer upward run seemed to be exhausting itself and now a downward trend appears to be setting in, the question is for how long?

A few weeks back I mentioned whether we would have the traditional Santa rally this year. At that time the market hadn't sold off and it was difficult to see how an upside could be maintained through to the new year. There was the prospect of further bad news, topping it all being the US fiscal cliff talk which is now looming over the market as we head into December.

Sportingbet, William Hill, GVC takeover update 2

Looks like this one may go to the wire as William Hill gets an extension on the deadline.

(Reuters) - William Hill (WMH.L), Britain's largest bookmaker, has been given until next month to submit a formal bid for online gaming company Sportingbet (SBT.L) following a 530 million pounds ($841 million) takeover approach.

The Takeover Panel, which oversees mergers and acquisitions, has extended the deadline for an offer until 1700 GMT on December 4 to allow discussions to continue between Sportingbet, William Hill and joint bidder GVC Holdings (GVC.L), Sportingbet said.

http://uk.reuters.com/article/2012/11/13/uk-sportingbet-william-hill-idUKBRE8AC07M20121113

Meanwhile the share price of both William Hill and Sportingbet drift lower, the latter now around the 50p mark, with the potential takeover being 61p.

Is there a chance it won't happen?

The complication for William Hill is to try to separate out the Spanish business from operations in other parts of Europe where the regulations are less clear-cut.

Partner GVC is planning to acquire those operations in "grey markets" where regulatory risks are higher.

http://uk.reuters.com/article/2012/11/13/uk-sportingbet-william-hill-idUKBRE8AC07M20121113

Previous posts;

Will Sportingbet finally get a takeover bid?

Sportingbet, William Hill, GVC takeover update

Vodafone, where's the bottom?

So, Vodafone had another bad day on the markets today. It has just about replaced Tesco as the unloved big behemoth FTSE100 company of the moment by the city. The share price has been consistently falling since hitting a high of around 192p back in August, closing today at a little over 162p.

This morning Vodafone gave its half year report and typical of a company that didn't need to surprise anyone with something that would hit the share price further, the company delivered a nasty surprise.

The Group incurred a total impairment charge of £5.9 billion in relation to the carrying value of goodwill of its operations in Spain and Italy as a result of challenging market conditions and adverse movements in discount rates.

There's that word again "challenging".

Not even the news that a Verizon dividend would actually be payable at the end of the year was enough to save further falls.

Verizon Wireless

VZW, our US associate, achieved organic service revenue growth of 8.0%* in H1 and 7.8%* in Q2. Our share of profits from VZW was £3.2 billion, up 27.4%* year-on-year. VZW's net debt declined from US$6.4 billion at 31 March 2012 to US$1.9 billion at 30 September 2012, despite spending US$3.7 billion (net) on the acquisition of spectrum in H1.

On 12 November 2012 VZW declared a dividend of US$8.5 billion (£5.3 billion), of which Vodafone's share is US$3.8 billion (£2.4 billion). The dividend is due by the end of the 2012 calendar year. The Group intends to commence a £1.5 billion share buyback programme after receipt of the dividend.

http://www.digitallook.com/news/rns/20493394-10097/VOD-Half_Yearly_Report_html

Public Sector Watch, IDOX

So many companies today do business in one form or another with the public sector. Some may rely too heavily on Government contracts while for others it is part of their business. Given the austerity measures that Government is taking right now, it is probably better to find companies that do the latter than the former. Those that rely totally on contracts with the public sector have little to fall back on if the money dries up.

IDOX is an AIM company that reported today in positive terms about its business with the public sector.

The Group's three key metrics being revenue, EBITDA and adjusted* pre-tax profit, are all expected to be comfortably ahead of consensus market expectations for the full year. Like-for-like organic growth has also been particularly encouraging in both the public sector and engineering software divisions which, together with our active acquisition programme, will deliver significant top line revenue growth for the year.

The Public Sector division continues to benefit from assisting local councils to achieve their cost savings and is expected to perform better than forecast, together with organic growth at a higher level than anticipated, due to the successful implementation within UK councils of our managed services and hosting products. The Group has been awarded a framework agreement by the Government Procurement Service for G-Cloud Services following an application and review of its Cloud offerings.

The CEO gives a good description of what is now expected from those companies doing business with the public sector.

"We continue to develop new and innovative methods to drive productivity within the Public Sector, a market which is now focused on managing costs and efficiency. Our strategy to differentiate within the Engineering Information Management sector, by being the only provider to offer a cross platform interoperable solution, is now beginning to show results and, in 2013 this division will continue the process of adding new markets to its North American core. "

The shares are up around 10% today on the expectation that the company looks forward to being comfortably ahead of consensus market expectations for the full year when it reports on 12th December. Looks like one to watch out for.

http://www.digitallook.com/news/rns/20490361-30992/IDOX-Trading_Update_html

IDOX to beat expectations in 2012

Video market round up for week ending 9th November

A week ending round up of the markets from Steve Briggs YouTube channel.

A review of the markets for the last trading week, including FTSE100, S&P, Dow. This week also includes a look at UK FTSE100 shares, Marks and Spencer, Barclays and BG.

This week's episode also looks at the City Index Trading Academy. I tend to agree with the view that so far there hasn't been much about trading methodology and on what basis the contestants actually make their trading decisions.

Links:

Steve's YouTube site http://www.youtube.com/user/sjb5555.

http://www.cityindex.co.uk/trading-academy/

Buy high, sell higher, the hardest way to invest or trade?

I came across an interesting article today which tells us a lot about our own psychology when it comes to investing or trading. Although the article itself is not about investor or trader psychology, it suggests that the way our mind works isn't always in our best interest when it comes to the investments we make. We like to buy cheap, we like to buy something undervalued and often we are tempted to catch falling knives. In short, we think that cheap is the way to go and look for strategies that fill that desire. Of course, it can work, value investing has its place. Finding undervalued, unloved sectors or companies can pay big dividends if you are prepared to wait, sometimes many years, while avoiding the dreaded value "traps" that the market lays for us.

However, there is another way, but it is a way that most investors and traders almost intuitively try to avoid, buy high and sell higher.

No one likes to buy things that are expensive, that look overpriced, that keep going up and up, sometimes with no logic to it, accept they are going up.

Here are some quotes from the article;

I want to share with you an incredibly simple strategy today... one that has consistently crushed the markets.

Now the fun, or not, begins.

So, perhaps the US markets really did want Romney to win after all?  Obama gets a second term and the markets, after a calm start, have a hissy fit and throw their toys out of the pram. At one stage the Dow was in positive territory, then later hit -300, ending up 312 down. The UK FTSE joined the early celebration party, then caught the bad mood as the day went on.

Was it thoughts of the fiscal cliff ahead or the fact that Europe came in with some less than encouraging economic numbers that gatecrashed the party? Oh, and to top the day off the Greeks, their politicians that is, are voting again on more austerity. Not much of a party going on in Greece right now.

Of the economic numbers, the one that may well have scared the market the most was news that Germany's industrial production contracted at a faster rate than expected in September. Output was down 1.8% month-on-month, instead of the 0.7% fall expected. Now people can probably see why Germany doesn't want to take on the burden of all of Europe's economic woes and why they seem to be standing pretty firm on what others should be doing to clear up their debt mess.

Obama says the best is yet to come, if anything the markets went back to the volatility of the recent past. Fiscal cliff fears will be with the market until the politicians agree on the next cobbled together compromise as surely they must. They probably don't have much of a choice.

Panorama, undercover in the bookies, bad news for William Hill and Ladbrokes?

In recent weeks, what with the Jimmy Savile scandal, the BBC flagship current affairs programme Panorama has had bigger fish to fry than last night's expose' of the UK bookmaking industry. Here's how the BBC set the scene.

Even in recession-hit Britain, the gambling industry is still making a profit - £5.6 billion last year. With casino-style gambling now available day or night at the touch of a button in our homes and on our phones, Panorama explores its popularity... and reveals a darker side.

Reporter Sophie Raworth hears from those who have found their lives spiralling out of control, and from industry insiders who say violence and frustration, linked to fast-paced high-stake gambling machines, are increasing in our high street betting shops. Panorama goes undercover in some of Britain's bookies to test those claims.

http://www.bbc.co.uk/iplayer/episode/b01nm27r/Panorama_Gambling_Nation/
(BBC Iplayer link only available for 7 days, not for those outside the UK)

The fast-paced high-stake gambling machines that is referred to above have been one of the major growth areas for High Street bookies like William Hill, Ladbrokes and others. It is also an area where politicians appear keen to focus on when it comes to increasing the taxation take. The Government in this year's budget made plans for raising more in tax from the gambling machines.

Budget 2012: New gaming machines tax 'puts 11,000 jobs at risk'

Bookmakers fear 11,000 jobs are at risk after the Government unveiled a new tax on gaming and fruit machines, which is expected to cost the industry £50m a year.

It goes on;

Video market round up for week ending 2nd November

A week ending round up of the markets from Steve Briggs YouTube channel.

A review of the markets for the last trading week, including FTSE100, S&P, Dow. This week also includes a look at UK FTSE100 shares, BG Group, Admiral and Burberry.

More videos can be found at Steve's YouTube site http://www.youtube.com/user/sjb5555.

Dow, S&P and Nasdaq, downward trends in place?

Certainly looks like all three of the major US indices are trending downwards as we head into the Presidential election. Who does Mr Market want to win?  A quick search on the web suggest's opinion is divided, but here is one view that just about sums up what is likely to happen regardless of who wins.

So, what does the outcome hold for the global equity and bond markets? Have the markets already discounted the poll outcome?

Says Dr. Andrew Freris, Chief Investment Strategist (Asia), BNP Paribas Wealth Management, “The US presidential election will involve a major political problem in resolving the "fiscal cliff" issues irrespective of who wins.”

“Just like in September 2011 when there was a short-lived bloodbath in the US markets over the related issues of the US downgrade and the raising of the fiscal ceiling, the inability (or unwillingness) of the US politicians to resolve the fiscal issues before the elections, means that after 8 November and till 31 December (the fiscal deadline), there could be a lot of volatility in all equity markets,” he adds.

“There will be some changes in policy, particularly concerning fiscal issues, but overall, despite the fact that Americans are presented with a very clear choice between Obama and Romney, I don’t think we are going to see any big shifts in any particular direction, irrespective of the outcome,” noted Alastair Newton, Senior Political Analyst, Nomura in a report dated October 29.

“For big picture policy, although the election is important, we are still going to be dealing with a deeply divided Washington, where resolving some of the major challenges facing America like long-term debt and deficit issues is going to be a severe challenge,” Newton points out.

http://www.business-standard.com/india/news/web-exclusive-us-pollsits-impactglobal-markets/194421/on

Charts;

FTSE and Eurostoxx treading water

The FTSE100 recovered slightly last week, but still looks to lack any conviction about another attempt on 6000.  US Presidential election week may either give a positive boost to sentiment or knock it the other way. The 20/50 dma crossover on the FTSE is still surprisingly positive although the index seems to be stuck in a tight range at the moment. The 20/50 dma's seem to be reflecting this tightness.

Eurostoxx index shows a rare coming together and staying together of the 20/50 dma. Usually you get crossovers confirmed fairly quickly, even the ones that fail and then go back in the other direction. The dma's being this close together suggest uncertainty. Whether this is also consolidation before another move up remains to be seen.  Still could go either way. Another point to note about the Eurostoxx is the triple top that might be heading for a quadruple top, something has to give eventually.

FTSE100

Eurostoxx50

Is WM Morrison the new Tesco?

At least in the eyes of the city when it comes to being down on a food retailer? WM Morrison is a company which seems to be attracting negative news around the city right now. It looks like the ground is being prepared for disappointment around this one when it updates the market next week. The share price has been falling, brokers have lowered just about everything to do with the company, but is the worst priced in?

Panmure Gordon expects the downgrade cycle will continue at supermarket chain Morrisons, with the group seen under-performing the market all the way into fiscal 2014.

The broker is forecasting third quarter (Q3) like-for-like sales will have declined by 0.1%, which will put pressure on the profit & loss account.

"It has already announced Q1 and Q2 like-for-like sales declines of 1.0% and 0.9% (ex-petrol) respectively. Q3 has a slightly tougher comparable, but we look for a decline of 1%. New space is expected to add around 2.1% to sales growth in H1 [first half], so total sales growth should be just over 1% (ex-petrol). The last Kantar data for the 12 weeks to September 30 had Morrison growing at 0.0%, so the risk to our forecast seems to be on the downside," Panmure Gordon reckons. 

www.digitallook.com

Does the above suggest that any slight bad news will result in a Tesco "profit warning" price fall type day for Morrison next week? Tesco fell almost 20% on the back of a poor showing in its UK market back in January, could the same happen to Morrison if the numbers are even slightly lower than expected? Even though the P/E and dividend yield for Morrison are not that demanding right now, but if the market sees a profit warning coming in then the shorters could have a field day next week.

Comet, another big name UK retailer to bite the dust?

The UK High Street may be about to lose another big name icon retailer with reports that Comet is about to go into administration.

Comet, the electrical retailer, is close to going into administration, putting about 6,000 jobs at risk, reports say.

The company, bought by private equity firm OpCapita last year for just £2, has struggled from the downturn in consumer spending.

Two weeks ago, OpCapita said it was examining a number of potential bids for 240-strong chain.

But there are reports Comet will appoint an administrator imminently.

http://www.bbc.co.uk/news/business-20164228

Comet was once part of the Kingfisher Group, which has managed so far to avoid the fate of other retailers and has actually been a case of steady as she goes with a solid performance over the last 5 years. They clearly saw that the writing was probably on the wall some time ago for Comet, competing in a crowded market place with the likes of Dixons, Currys, PC World, etc. Dixons share price this morning is up around 13% at time of writing, partly due to a last man standing in the High Street approach that suggests that once Comet has gone it will pick up some market share. Same could be said for Home Retail Group.