Olympic Fever or a Quiet Weekend?

Coming up to this weekend, I've had a difficult decision to make... Olympic Fever or a Quiet Weekend?

We are entrapped (well at least the car is) for the weekend, as Olympic Fever grips Dorking. We're playing host for part of the London 2012 Road Races (men tomorrow and Women on Sunday). The road races include the notorious "zig-zag" road, that snakes up Box Hill, with the men doing 9 circuits of the Box Hill Loop and the women doing two circuits. Both races start and finish on the Mall and are accompanied, for their duration, by overhead (helicopters) and vehicle based security and television crews.

Entering into the spirit of the occasion, we've decided to invite down Jordan (Grand-Son) and to go out to a spot where we can see the Olympic cyclists go past 9 times (twice for the women). The whole area is swarming with visitors, arriving for the event, and there are two noticeable landmarks that have appeared.

The (temporary) Olympic Rings on Box Hill

The Olympic rings are visible for miles around and provide a clear signpost to Box Hill. They look spectacular, when viewed across the rooftops from Dorking (see below)...

Olympic Rings on Box Hill - viewed from Dorking

Fortunately, the other landmark will be permanent - being a sculpture set in the middle of the Pixham Lane roundabout on the A24. This was part funded by our local Mole Valley District Council, with the balance provided by local sponsors.

 "2012 Cycle Race Sculpture" by Heather Burrell 

Well, I hope that you'll understand that I'm going "with the flow" this weekend, so I'll be out there cheering on our lads and lasses, as they go for gold. Come on Cav, Bash on Brad, get nippy Nicole and don't linger Lizzie!

Come on Team GB!

Is Thomas Cook Turning?

Thomas Cook Group (LSE: TCG), closed last night at 16.0p - giving a MCAP of £140m for a Company turning over in excess of £9Billion a year. What caught my attention was the clear breakout from the downtrend (see below)...

In terms of fundamentals, the Sharescope Key Metrics (below), show clearly what has been happening...

From this, you can see that the PSR(h) is only 0.014 (MCAP 140.0m / T.O. £9808m) and the PSR(pr) is 0.015 (MCAP £140.0m / T.O.(pr) £9662m), reflecting it's recent past history.

Surviving the challenges of the recession is the game for Thomas Cook and making money from successful turnarounds is one the great ways for DIY-Investors to beat the markets. So what are the factors that we should take into account in making our decision about whether to invest or not?

Well, from my research this morning, here is the position as I see it:


Technical Analysis

Having suffered a drop from 272p (Spring 2010) to the recent low of 10.2p (22nd November 2011), with a fall of 96.3% in the past 28 months or so (see below), the shares in TCG can truly be said to be "out of favour" with the smart city money.

However, there is a clear breakout from the downtrend, coupled with the following signals which you could argue are the first indications of a change of sentiment (and possible opportunity for us DIY-Investors). The short term graph (below) is very interesting!

From the initial breakout (above the 50 day m.av.), the price drifted back, went sideways but then met resistance from the downtrend line until Tuesday 17th July, when it broke through. It did this very "quietly" with no great volume to announce this to the World. Yesterday, it followed with another tick up, with slightly increased volume (but still nothing to shout about).

However, what sealed it for me was the very slight twitch (up) on the OBV, coupled with the buy signal on the ADX indicators (lower two secondary indicators above). The RSI also started to turn up.

The Debt Problem

TCG have made it clear that lowering debt has been made a priority and the Shareholders Approval (29th May 2012) to "Life Saving Asset Sales", coupled with the appointment of Harriet Green (previously boss at Premier Farnell) as the new CEO to mastermind the recovery (or should it be resuscitation?).

The proposed sale of its Spanish Hotel Chain and a 77% stake in Thomas Cook India, together with proposed sale & leaseback of some aircraft might just be enough to allow the patient to breath.


Summary

There is clearly a lot of risk in investing in TCG but having just re-read Peter Lynch's book "One Up on Wall Street"  during my recent (wet) holiday in Cornwall, I can see potential reward too!

As ever, please "Do Your Own Research" and make up your own mind on this!

Mick.

Webbed Feet!

Like any of you that have been on holiday in the UK for the past fortnight, I have returned home with Webbed Feet! We spent most of the time picking our way through puddles or "squidging" up and down the sodden South-West Coastal Path around Cornwall's Lizard Peninsula!

Just occasionally, the sun popped out through the clouds, to remind us what summer could be like and how picturesque the Cornish coastline is...

Coverack (at low tide)

Our holiday spanned the end of June but I was able to record the DIY-Investors Portfolio Performances, which produced some very interesting results as can be seen in the full report here: DIY-Investors Portfolio Performance (6 months to 30th June 2012)

I'd be interested to hear about your views on whether I'm right to hang on to UK Coal.