SKC fundamental positions

[skc]

Looks intriguing especially if it breaks below 50, could be smashed into oblivion. The last quarter of cashflow looked great but unsustainable, there seems to be a lot of fluctuation in that figure. Going from the comments the next quarter may not look so great which could provide an opportunity as cashflow.

Debt looks manageable, not sure about the long term prospects of the business but definitely looks like it might be worth a look when the dust settles.

The volumes weren't great on a takeover news... probably only ~20m odd shares. So once they are washed out the selling should ease.

And you are quite right about the fluctuation in the financials. It all looks pretty good on paper but it's trading so cheap you really need to ask if there are flees that you just can't see.

 

[JTLP]

Hi SKC.

Quite enjoyed following this thread - you're a learned fellow and from what I can gather an NBA fan (where else would amazing happen ).

Any updates?

 

[skc]

Hi SKC.

Quite enjoyed following this thread - you're a learned fellow and from what I can gather an NBA fan (where else would amazing happen ).

Any updates?

Thanks Snoopy. I know I said I'd keep this alive.... but the website Smartportfolio recently stopped offering free access and I couldn't be bothered to re-record the transactions. Yes a pretty lame excuse the abandon the thread.

Still doing plenty of buying and selling using similar approach so may be I will revive this some time down the line.

P.S. Yes I am an NBA fan and the NBA league pass broadband makes it difficult to focus on trading during the day!

 

[JTLP]

Thanks Snoopy. I know I said I'd keep this alive.... but the website Smartportfolio recently stopped offering free access and I couldn't be bothered to re-record the transactions. Yes a pretty lame excuse the abandon the thread.

Still doing plenty of buying and selling using similar approach so may be I will revive this some time down the line.

P.S. Yes I am an NBA fan and the NBA league pass broadband makes it difficult to focus on trading during the day!

Ok cool - understandable about the portfolio debacle!

Good to hear about the NBA - the league pass is some insane value!

PS Go Celtics =)

 

[herzy]

Ah what a thread! I've read both yours and Robusta's wtih great interest (am just starting out). Just a question - how do you find mergers, and analyse how likely they are to succeed? Seems like quite a nifty way of making relatively quantifiable profit over a short period of time (e.g. 6% in 2 months).

What a shame you had to end the experiment...

 

[skc]

Ah what a thread! I've read both yours and Robusta's wtih great interest (am just starting out). Just a question - how do you find mergers, and analyse how likely they are to succeed? Seems like quite a nifty way of making relatively quantifiable profit over a short period of time (e.g. 6% in 2 months).

What a shame you had to end the experiment...

To find mergers I just follow all the ASX announcements.

To assess likelihood...
- Who's the acquirer (are they legit with money or are they dodgy). Plenty of Chinese and Indian companies are all talk and no action.
- Who are the major holders of the target and identify if there are potential resistance.
- What sort of commentary are being made by media and holders (forums are good for that).

While it looks like easy money, one mis-hap will cost you plenty (look at CSV on this thread, or those who are in the FMS mess).

 

[herzy]

I will listen to both this:

To find mergers I just follow all the ASX announcements.

To assess likelihood...
- Who's the acquirer (are they legit with money or are they dodgy). Plenty of Chinese and Indian companies are all talk and no action.
- Who are the major holders of the target and identify if there are potential resistance.
- What sort of commentary are being made by media and holders (forums are good for that).

AND this:

While it looks like easy money, one mis-hap will cost you plenty (look at CSV on this thread, or those who are in the FMS mess).

Thanks!

 

[sammy84]

SKC

Have you given up the fundamental trading for now?

Also haven't seen any action in the pairs thread, how is that going?

Cheers.

 

[skc]

SKC

Have you given up the fundamental trading for now?

Also haven't seen any action in the pairs thread, how is that going?

Cheers.

I am still doing both but just not posting on them.

I am quite serious about reviving this thread but just hasn't come across a good stock to get it started.

Pairs trading is still profitable but less so then before. I've had to increase position size to get the same $ returns.

 

[Ves]

Didn't Buffet make 20-25% pa on merger / corporate takeovers and other such "risk arbitrage" events?

 

[nulla nulla]

....Pairs trading is still profitable but less so then before. I've had to increase position size to get the same $ returns.

Been tough the last few months. Shares I trade seem rangebound with an even tighter spread than before. Found we are doubling the size of the position, taking half the movement to extract a reasonable profit. Where we were able to take between 2-3% return on a trade, we are now having to take 1-1.5%. Still, they add up over time.

 

[skc]

Didn't Buffet make 20-25% pa on merger / corporate takeovers and other such "risk arbitrage" events?

You will have to ask him :

The market is actually reasonably efficient when it comes to pricing merger probabilities imo. Usually the first couple of days upon deal announcement there are opportunities for a decent entries (being ~20% annualised, but probably ~5-8% net) when holders who bought at much lower prices cash out at profits. But if the price falls for no reason weeks afterwards, chances are the probability of the deal going through has changed for the worse.

There are several deals in the market at the moment that has unusally high returns, and I bet you some of them won't go through.
- NGF - bid at 27c, last ~23c
- PRH - asset sale to SLR for SLR script in return. Value ~22c, last ~18c
- FMS - crazy Russian games going on

Having said that, if you get into a bidding war by accident, you would be pretty happy. My finger was hovering over the buy button for LDW after the first bid... and that would have been pretty sweet. Oh well.

These few variables determine whether you achieve 30% return or -15% running this strategy.

 

[skc]

Been tough the last few months. Shares I trade seem rangebound with an even tighter spread than before. Found we are doubling the size of the position, taking half the movement to extract a reasonable profit. Where we were able to take between 2-3% return on a trade, we are now having to take 1-1.5%. Still, they add up over time.

You talking about Pairs trading? That sums up reasonably well. Do continue the discussion over at the pairs trade thread if you wish.