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Mark Carter
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Scarcely anything has been pronounced by one learned person the contrary of which has not been asserted by another, and it would avail nothing to count votes for in the matter of a difficult question, it is more likely that the truth should have been discovered by few than by many.

-- Descartes

I've finally watched the final series of Lost. My favourite series of all time. I can't imagine any other telly program living up to it. Battlestar Galactica was good, too, though.

CPP.L (CPP Group) added to sticky situations at 126.5p. The Company focuses on providing customer assistance during stressful life events, such as the loss or theft of a wallet, purse, mobile phone or keys, as well as providing support in the event of identity theft.

Current PER is less than 7. Yield 5.8% Market cap is £214m, or which directors own £123m (57%). Share price dropped from 282p on 28 March to 148p on 6 April (down 48%) on investigation by FSA into its sales tactics. Barclaycard subsequently requested syspension of sales to their customers.

FTAS is 2578.

TALK.L (TalkTalk Telecom) gets added to sticky situations fund.

The attraction to it is that it's a demerger from CPW (Carphone Warehouse). It has posted its first trading result, and there is heavy management ownership. Director holdings amount to a whopping £398m. The total market cap is 1219m. So directors own 33%. It is trading on a PER of 9.8, with an EV/EBITDA of 5.3. It's not the cheapest fixed line communication company, but the level of insider ownership gives me a higher conviction than the likes of CW. (Cable & Wireless Worldwide), which is having tremendous problems at the moment.

Earnings projections look good, and there isn't much chatter on the boards (a helpful sign).


As usual, no performance indicators are available yet as I still haven't gotten around to programming the necessary features. Stay tuned.

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ExpectingValue has mentioned HWDN (Howden Joinery) http://bit.ly/p2Aob9 . I have created a spreadsheet so that you can follow the "magic formula" numbers ROC and UEY for it. http://bit.ly/nxcuch The spreadsheet automagically updates for the current share price. At 102.6p, the ROC=50.0%, and UEY=17.6%, which seem like pretty good values. I do have some concern, though, that the EBIT value used for the calcs may be near some high point, though.

Great quote I found at Motley Fool:

"In 1887 Alexander Tyler, a Scottish history professor at the University of
Edinborough, had this to say about the fall of the Athenian Republic some
2,000 years prior:

"A democracy is always temporary in nature; it simply cannot exist as a
permanent form of government. A democracy will continue to exist up until
the time that voters discover that they can vote themselves generous gifts
from the public treasury. From that moment on, the majority always votes for
the candidates who promise the most benefits from the public treasury, with
the result that every democracy will finally collapse over loose fiscal
policy, (which is) always followed by a dictatorship."

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CWK.L (Cranswick) gets added to the "sticky situations" fund. Mucho kudos to ExpectingValue for doing a lot of the number crunching and general descriptive work (http://bit.ly/nhQtpm). Looks like a solid company. Comes off well on Magic formula with ROC of 31% and EY of 13.6%. Brewin Dolphin downgrades it from add to hold, which I take as a good contrarian indicator. Investors are concerned about the market backdrop and infaltion. Sales growth petered out in 2011Q1.

Shares dropped about 12% earlier this month on the bad news.

Directors own about £2.6m of stock, against a market cap of £307m. Ask price 644p.

Time to take a punt. Software still isn't in place to demonstrate gains (or losses!), so stay tuned to find out how the portfolio is doing. It's very early days for the portfolio anyway, so there's nothing much to report. Pace seems to be doing well so far (up about 5% since entry) . SHG is about breakeven - the shares have mostly been up, but there's a big spread on the prices, so I use the ask price to determine my entry point. So I'm not cheating!

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CWK looks interesting. Many kudos go to ExpectingValue for his write-up on the meat processor. Shares tumbled 13% so far today on latest IMS http://bit.ly/qkI6ER . Like-for-like sales were up, which you would have thought was quite bullish. Raw material increased during the quarter, which doesn't help.

CWK seems like a sold company, with good ROEs over the last decade, and a great balance sheet. It reminds me of RWD (Robert Wiseman Dairies).

I'm not brave enough to pull the trigger on this one at this point, although my interest is definitely piqued. I suspect we haven't seen the low yet.

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PIC (Pace) released its IMS. I haven't fully digested it yet. There's some good stuff, some bad. Revenues are up. Key seems to be acquisitions, where the gross margins are higher. Net debt is down a little, which is nice to see. Gross margins are stable. Return on sales from acquisitions looks pretty good. Inventory, receivable and payable days look pretty good, and are stable.

Divvies up 12%. I do like my dividends.

http://bit.ly/oGZTGU

Great quote that I found that I think sums it all up: "Just ask yourself a very logical question: Do you really find a solution to debt by incurring even more debt?"
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