What! - Pendragon Again?

OK, OK - But take a look at this (Pendragon up 8.93% today)!

Pendragon (LSE: PDG) closed today at 15.25p (up 1.25p or 8.93%). So what's got me off my backside to miss tonight's Olympics? Well,have a look for yourselves...

It's this bullish reversal pattern (yellow arrow on graph), with its base on the sloping support line (magenta colour) and the high volume today. In my opinion, this could herald the start of another upward move - following the interim results released on Tuesday 7th August.

It's worth reminding ourselves of the long-term shareprice graph (see below)...

From this, you can see the resistance line, connecting the lower highs, and the lateral breakout that I referred to in my Live TV Broadcast on 7th August. There looks to be a support line developing which, if it remains intact, bodes well for the future of PDG in the DIY-Investors portfolio.

As usual, DYOR and I recommend that this includes you reading the Interim Results and the Analysts Presentation (7th August 2012).

Mick.

DIY-Investors - You're Keeping Me On My Toes!

My thanks to Simon & Mike for getting back to me so quickly, following the DIY-Investors Live TV Broadcast last night. The reason...

I dropped a "Clanger" (albeit a small one) - hopefully proving that I am fallible (and human - or so my Martian friends say). The item in question was the "Pendragon Breakout", wherein I stated that the results were due out on 23rd August 2012 (based on last year's timing - and as carried on Sharescope). This highlights an interesting fact, that Companies lower down the FTSE (and I believe on AIM as well) are not obliged to tell us in advance the date that they intend to release their results. The net effect - I got caught out! Oh well, that'll teach me to not check for announcements, on the day when I'm busy preparing for the TV Show.

So, do the Pendragon Interim Results change my view on anything?

Mike W. pointed me in the direction of a comment, contained within the interims, regarding the cashflow statement. The preamble (page 14 of the interims) stated:

My reading of this...

A slight 'slap on the wrist' by the Financial Reporting Review Panel, which doesn't change the net cash flows (or opening and closing cash positions). In summary, it doesn't change my observations that PDG seems to be turning around (recovering).

My apologies to viewers on behalf of my oversight but I hope you'll agree (particularly if you read the interims) that Pendragon deserves consideration as a recovery stock.

Mick (10.30am, Wednesday 8th August 2012)

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.

British Polythene Industries (BPI, SP=349.5p) - Resuming Uptrend?

BPI closed tonight at 349.5p which, although not in itself a significant rise, does seem to confirm the possible resumption of the uptrend that had been in place from February 2011 to March 2012. BPI has been in a short term (against the trend) drop, indicated by the blue dotted lines on the annotated Sharescope chart (below)...

Note that the OBV has increased significantly this Spring and the Key Metrics (below), show a strong position...

I've underlined some key points, namely:

• Reducing Debt
• Reduction in Net Gearing
• Increasing Profit
• Increasing eps (47.66p in year to 31.12.2011)

The other factor that interests me is the low PSR (0.18), which seems to be low for a Company that has an operating margin consistently 3 to 4% of turnover.
 
As you know, this is one of our Share-Picks for 2012, contained in both the DIY-Investors Passive Portfolios and my Actively Managed Portfolios. It will be interesting to watch BPI's progress over the next few months.

What you think of BPI's prospects?

As usual, my recommendation is to check it out for yourself and make up your own mind as a "DIY-Investor".

Mick.

Mobile Streams - Reversal Signal?

Mobile Streams (AIM: MOS), closed tonight at 25.0p (down 4p - 13.8%). This looks to be a classic Low - high, High - Low reversal and perhaps signals a time to take profits on this young growth Company, current MCAP = £9.1m.

The graph below shows the clear signal...

Since we spotted the breakout on 14th March 2012, when the price was 11.875p, MOS has had a good run - increasing by 13.125p (+110.5%) at the closing price today. However, now seems like a good time to take profits and wait for the next set of results, as I believe the likelihood is that a drift back in the share price is on the cards.

However, with the volatile market and the looming Greek election on Sunday, it would be a brave person that would suggest re-investing before next week!

As ever, DYOR and make up your own mind on Mobile Streams.

Happy Investing - despite the gloomy weather!

Mick.