The Stock Market Flutter Thread

1

Other than Fingal Raven’s extensive soccer club investment portfolio does anyone else here buy shares ever? I haven’t done so but it’s not going to stop me giving my first tip for a flutter on the stock market:

I was reading today about C%C’s shares dropping by 10% - reason: they’ll have lower profits this year due to investing more in their manufacturing facilities because of the growth in Magner’s in the UK.

Some observations:

  • obviously short term investors have baulked at the notion that current year profits will be expected, but the prospects for growth are enormous
  • the number of people drinking Magner’s in Glasgow is phenomenal. Easily the most popular beverage in any of the pubs I’ve been in
  • While the share price has dropped now as a reaction to the lower profits than expected, those profits will still be well above previous years and there should be a feelgood buoyancy about those results anyway
  • As a long-term prospect Magner’s have only just attacked parts of Britain. They’ve loads more to cover but their record has shown that their product is a huge seller anywhere.
  • Sales figures in the summer are likely to be very impressive as cider is traditionally a bigger seller at that time so again while sales against earlier expectations might not be brilliant other comparatives (e.g. sales versus competitors or sales versus 2006) are likely to be very healthy indeed.
  • When the cider distribution channels have been revamped it’s likely to have a positive effect on sales of Tullamore Dew etc also. River Rock isn’t the biggest selling water because it’s the nicest water - it’s hugely successful on the back of the Coca Cola sales structure. Something similar should happen between Tullamore Dew and Magners.

Conclusion:
Recommend purchase of shares in C&C at 10.55

Background article:

C&C struggles to cope with cider demand
28/02/2007 - 13:40:13

Shares in drinks maker C&C Group sank more than 10% today after the company warned it was facing higher costs as it struggles to cope with soaring UK demand for its flagship Magners cider.

The Irish group announced lower-than-expected profit growth figures due to increased spending as it ramps up production to quench UK drinkers thirst for cider with ice.

Sales of Magners soared 264% in the last year as the drinks popularity was boosted by a high profile advertising campaign and hot summer weather.

However, C&C said UK sales had been held back in the second half of the year due to insufficient manufacturing capacity at critical periods.

Magners was launched across the UK a year ago and the roll out was accompanied by a 30m advertising campaign targeted at young professionals.

The company also warned that it would increase spending on marketing significantly as it attempts to capitalise on the boom in cider drinking in the UK and Ireland.

C&C said as a result of the increased spending it was expecting operating profit growth of between 15% to 25% for 2007/2008 lower than City forecasts.

The announcement came as C&C said it was set to report a 25% increase in turnover for the year to February 28, 2007, from 817m achieved in 2006.

C&C, which also produces whiskey brand Tullamore Dew and sells cider under the Bulmers brand in Ireland, added that it expected to achieve a 6% hike in full-year profit margins.

Maurice Pratt, C&C chief executive, said: Magners in Great Britain has delivered tremendous results for C&C in 2006/07. Our primary focus in 2007/08 will be to enhance our market position in Great Britain.

He added that the company was also planning to carry out market testing of Magners in two other unnamed European markets.

Annual sales at the companys cider division are set to rise by 80% while shipment volumes in C&Cs Spirits & Liqueurs division are expected grow 11%.

Melissa Earlam, analyst at UBS Investment Research, said the profit growth for 2008 would lead to operating profits of between 240m and 260m below forecasts of 284m.

However she added: Nothing in the statement detracts from the Magners brand.

The growing popularity of Magners has contrasted with declining sales of traditional pint Guinness, particularly in Irish and UK markets.

C&C employs around 2,000 staff and has its main manufacturing and distributions sites in Cork, Dublin, Clonmel and Newcastle in Co Limerick. C&C shares dropped 1.05 to 10.55.

2

Heard that C&C are still a good buy, and haven’t peaked yet. Haven’t had time to analyse the share prices since the economic “wobble” in China yesterday sent shares tumbling. But should be some decent value to be had in the next day or 2 when it bottoms out.

Lots of punters panicking and dumping shares. Silly people.

But what about the poor cooonts who’s equity SSIA’s mature today. Wouldn’t be happy if it was me.

3

Folks, going for a job interview next week and my (new) agent has said this crowd typically tries to separate the bluffers from the astute by asking questions such as, ‘if you had eur5m to spend this morning on the stock exchange what shares would you buy?’

Going to (probably) do some research on this myself but anyone got any pearls of wisdom to add to rock’s C&C purchase shout and appendage’s false promise to analyse share prices.

4

Come on guys, don’t leave me hanging here.

Surely geeks like appendage, law and rock have something to say here.

5

Buy AIB for safety, and maybe NTR for the gash remewable energy should be the way forward! Or Glanbia, some major personnel cahnges in the coming weeks could have massive effect on the share price…

Actually fuck buying shares, set up a delta index account and use the 5m to make gazillions of euro from shares going up - and more interestingly down, its a form of spread betting. Potentially fantastic way to lose the 5 million, great fun. Can do a simulation account either.

6

If they ask you what shares would you buy on the stock exchange, I think your first point should be that it depends what your objectives are. Obviously you don’t have 5m, so you must be investing on behalf of others, so your decision will be affected by their expectations.

But whether it is their money or yours, three key factors spring to mind:

  • The level of risk you are willing to accept will to a large extent determine the level of return you can achieve: if you require (say) 90% guarantee on capital, you will look to invest in government bonds or blue-chip shares (banks being a good example as Appendage states), rather than in high-risk shares (start-ups) or derivatives
  • The expected timeframe: obviously it will affect your decision whether you are investing for five years or five days
  • The required level of liquidity: closing out of less liquid positions at short notice can lead to losses; therefore if you envisage having to withdraw large amounts of funds at short notice, you will largely be precluded from investing in these less liquid positions

If he pushes you to commit to what shares you would buy on the stock exchange, check which stock exchange he meets, noting that by diversifying across markets you can reduce your overall risk. Or if you’re limited to the Irish Stock Exchange, note that companies like Elan & CRH are involved in a number of geographical markets, therefore the (geographical) market risk in such companies is itself limited (i.e. a bet in CRH is not simply a bet on the Irish market).

I think this should cover you; best to acknowledge the complexity in the market & show you are aware of it, and of the many methods that can be used to respond to it.

Talk about hedging risk by

7

Just back from a shocking interview there. If anyone of you know steamboatsam, well I was so bad that I came across as a slighty more competent candidate than him.

The stock market one is tomorrow so thanks for this law.

‘Well, in response to your question, the first thing I have to consider is if I want to be risk averse or a risk taker.’

Oh, yes.

8

:lol:

9

Just had a quick look at the C&C stock graph. Rocko has shown himself to be right up there with the best of our stock analysts. :clap:

10

Yes, but is this actual praise or does it just mean he was up there with a crowd of other simpletons and was actually shit?

Please clarify.

11

Please clarify if old man O’Dowd will be banned for bumping this thread

12

I will not be commenting further on this issue.

13

Eh Magners have just announced a massive sponsorship deal with Irish sport so the share price is about to climb rapidly.

14

Kedco on the London AIM… worth a small punt as they did an equity for debt swap recently which tidied up their balance sheet and theyre recent acquisition of a small wind player has given them a bit of diversity.

15

Black Monday redux? Carnage in Asia to be followed by carnage in Europe and further carnage in the US. Squeaky bum time about to become brown underpants time.

16

If you’re cashed up, this is a great opportunity to pick up bargain stocks left right and centre. Gove it a few days and buy, buy, buy…

1 Like
17

Catching a falling knife is dangerous business. We are in the beginning of a bear market so who knows where the bottom is but it could take a few months to get there. The only thing I would buy right now are US treasuries and short everything else. The shorts hold the strong hand right now.

18

Indeed, but a lot of this is governed by panic and also computer based trading. Those selling their shares today are idiots, reacting purely to panic. I would be looking at buying opportunities based on value. Many very well run companies are having their share price fucked today. This presents an opportunity in that the real value of the company is far greater than the current price. You buy now or in the next few days and yes, in all probability, the price will fall further and you may think you should have waited. But that’s trying to pick the bottom, which is a mugs game. If you accept that this may happen and you are still confident that the true value of the company is greater than what a panicky market is doing, you’ll be rewarded. Keeping your head while all around you are losing their’s is the key.

19

Stock market crashes* are the transfer of assets from the weak to the strong.

*Nowhere near a crash yet. Some fairly vicious moves over the weekend though.

20

The Chinese released a portion of their ridiculously massive pension fund to be used to prop up the stock market at the weekend, doesn’t seem to have had the desired effect though.