Goldbug100 Connaught PLC (CNT.L) - 7 days later

 

Aug 09, 2010

Shares in social housing maintenance group Connaught (LSE: CNT.L) were sharply lower again as it holds emergency talks with banks over a possible debt-for-equity swap that would wipe out shareholders. At the close 4:35pm: 11.00 p Down ...

 

8:41, Wednesday 11 August 2010 (Reuters) - Hedge fund Breeden European Partners has more than halved its stake in troubled social housing repairs group Connaught (LSE: CNT.L - news) , after the value of its holding plunged by more than 13 million pounds in recent weeks. The shares finished the day 14.13p + 0.73p

 

As mentioned in our previous 2 articles we are watching the shares and were possibly interested in entering at 10p or under but if they reached a distressed price of 5p then we might have taken a gamble

The article about the Hedge Fund appears to have strengthened the share price this week but we have seen this before with Erinaceous Group PLC (ERG.L). The involvement of a Hedge Fund is no guarantee of the survival of a Company. Hedge Funds can protect their interests better than the retail investor by "short selling". It is always the retail investor that will be hit the hardest - remember that.

 

23:05, Friday 13 August 2010 Dominic Midgley reports that Harry Tincknell, a budding racing driver son of Mark Tincknell., Late CEO of Connaught (CNT.L) the website for Harry Tincknell Racing has disappeared. In its place is a simple message : "Apologies for the inconvenience. This site is currently going through development and will be live as soon as possible." Connaught has been telling its shareholders the same thing. Motor racing is expensive (as the author knows having raced in Formula Ford 1600 on a tenth of the budgets of Marc Gene and Pedro Martinez de la Rosa in this Formula in Spain & Portugal). Erinaceous Group PLC lent a director 1.500.000 pounds for a private company of his in a similar line of business as the Public Company. It raises the question as to whether or not there is sufficient regulation of Public Companies whilst trading?

 

The shares finished the week at 16.47p up 0.39p on Friday the thirteenth

 

We would still stay clear of this company until it is know what Harry Tincknell did whilst CEO., whether there will be a rights issue or a deal with the company´s banks. If you are a day trader the wild swings might tempt you but the fund is a long term investor.

 

Graph Courtesy of Yahoo http://uk.finance.yahoo.com/q?s=CNT.L (but take no notice of 1year Target Estimate: Price Earning Ratio or Dividend/Yield - It is history

Goldbug100 CONNAUGHT (CNT.L) A victim of David Cameron´s save 40% policy?

Yesterday the shares fell 13.50p (46.55%) to finish at 15.50p. During the last couple of weeks knowing that the BP dividend would not be restored soon (and if so, despite promises that the oil spill could be paid for & dividends retained at a lower rate) the fund was looking at other opportunities - high yielding stocks. It´s attention was drawn to Connaught about ten days ago It closed at 31.46p (26 July) when Barcap implied that retail investors were diving into the stock. Yahoo gave a 1ull year Target Estimate: 137.33 p. The price was about 31.03p so we seriously considered a small purchase with a limit of 30p but after the Barcap news the shares continued to rise to 36p as the retail investor (we believe plunged in) for the shares had been 445.80p. On thursday there was news that RBS was selling it´s loan book at 37% of face value - we looked away from the stock unless it fell to 20/25p and by the close of business the shares closed at 29p (5 August) Our gut feeling was to stay away and yes the news Friday prooved that the feeling in our stomach had been correct. Earlier mention of a rights issue has been mentioned in yesterdays comments (see links below) and of course this would have brought down the dividend yield, but with yesterday´s news that (a dividend) has gone out of the window. We will continue to follow the compàny - a victim of the David Cameron "Save 40% policy" in part. - this is not one for widows and ophans, but we might consider a gamble at a lower price as deep down I would say that the fund is a contrarian investor

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Connaught Prices

Date Open High Low Close Volume Adj Close* 6-Aug-10 29.20 29.20 13.30 15.50 68,248,500 15.50 5-Aug-10 31.57 31.74 28.79 29.00 6,083,200 29.00 4-Aug-10 33.86 33.86 28.27 32.00 14,848,800 32.00 3-Aug-10 36.00 36.00 31.21 33.36 2,134,200 33.36 2-Aug-10 35.94 37.49 34.30 35.56 2,708,800 35.56 30-Jul-10 35.82 37.90 33.15 35.62 3,584,400 35.62 29-Jul-10 36.00 38.00 33.00 35.52 12,156,600 35.52 28-Jul-10 35.44 35.70 30.00 31.00 8,752,700 31.00 27-Jul-10 32.00 38.00 31.03 33.70 18,531,200 33.70 26-Jul-10 34.40 40.00 19.10 31.46 73,611,100 31.46 23-Jul-10 104.40 105.20 101.70 102.10 705,100 102.10 22-Jul-10 104.80 109.00 102.70 104.00 1,024,100 104.00 21-Jul-10 103.80 104.30 96.10 103.00 1,126,600 103.00 20-Jul-10 106.10 108.50 102.30 103.00 1,025,600 103.00 19-Jul-10 107.20 108.00 105.30 106.50 1,493,900 106.50 16-Jul-10 106.50 108.50 103.70 107.80 5,080,000 107.80 15-Jul-10 115.00 115.00 101.80 105.00 3,461,200 105.00 14-Jul-10 116.30 116.40 112.90 114.10 1,327,600 114.10 13-Jul-10 115.60 115.60 112.80 114.80 1,554,600 114.80 12-Jul-10 114.80 116.40 113.30 113.30 1,110,500 113.30 9-Jul-10 114.20 116.50 110.00 113.30 2,150,400 113.30 8-Jul-10 122.80 122.80 108.40 111.10 3,829,400 111.10 7-Jul-10 118.50 119.40 113.40 118.00 2,040,100 118.00

It is a known fact that unlike Spain there is a housing shortage in Britain and back Sir Roy Gardner´s feeling "may believe that there is a business worth fighting for" at Connaught (LSE: CNT.L)

References

Connaught faces further losses [at Financial Times] FT Times(Fri 8:50pm)

October is too late to find out what's really been going on at Connaught Other (Fri 8:26pm)