De La Rue - buy

3 weeks ago I wrote an article on shareworld about De La Rue.  The share price had suffered due to some quality problems, and although I thought it looked cheap, I was looking for a better entry point than 700p - preferably 600p.

Today De La Rue announced an update on the quality problems.  To me this looks like good news - the recognized financial impact so far has been a meagre £35m before tax (£25m after tax) vs a drop in market cap of almost £300m.  Although the final bill will likely be higher, I find it hard to believe it will be more than 10 times higher.

The market disagreed, and at one point De La Rue had dropped almost 10% to 640p.  I didn't manage to move quickly enough to get that price, but I was happy to buy in at 677p.  De La Rue is now just over 4% of my portfolio.

In other news I see that my views on Connaught (that there was an 80% chance of them being worth nothing) seem to have come true.  Today's announcement has put paid to any lingering hope that they might trade their way out of trouble.

Good timing (for once)

After buying a small stake in Southern Cross Healthcare on Monday, news emerges today that they are the subject of a "highly preliminary proposal with relation to a potential offer".  That was enough for a 56% jump in their share price, making them the top riser of the day.

As usual in these matters, events occurred in completely the wrong order.  First there was a 30% jump in the share price, then a statement from Towerbrook announcing an "indicative non-binding offer" (which triggered a further jump in the share price), followed by a sceptical response from Southern Cross: "the Board of Southern Cross has informed Towerbrook that it does not wish to enter into discussions at this time".

That triggered a brief downward blip, but the share price recovered to finish the day on 28.5p, up from 18p at opening.

I briefly thought about selling at 28p, but I've decided to hold on and see what happens.  Southern Cross started off so cheap that Towerbrook could still afford a pretty massive premium over the current price, and I did buy on the basis that they were worth 40-80p.

Southern Cross Healthcare

I picked up a few shares in Southern Cross Healthcare this morning at 19.47p.  This article on shareworld explains why.  SCHE now forms 1.4% of my portfolio.

De La Rue

I just can't stop looking at "bad news" companies.  Although I suppose a shipment of faulty banknote paper is in a different league to a 5 million barrel oil spill.

Today it's De La Rue.

Rok Group and Connaught

Two building services firms have recently seen their share prices hammered after announcing financial mismanagement, write-offs and warning over profits.  But while I think Connaught shares are probably heading to zero, I think Rok offer an opportunity - albeit a risky one.

Full details on shareworld.  (I disclaim all responsibility for the pun in the headline).

Update 16/8/2010:
Bought a very modest amount of Rok Group shares today at 17.97p.  They now form 1.4% of my portfolio.

BP - when to sell?

I've watched BP hit 420p a couple of times in recent weeks and started to think about selling.  So I've had another ponder about BP's value in the light of their recent results, and decided at what price I'll offload my shares.

As usual I've published my thoughts over at shareworld.  In a nutshell I'm going to hold on for 450p-480p, or a profit of about 30%.

Ocado

Ocado are doing an IPO.  Every analyst I can find is slagging it off, and there is speculation that it might not get airborne.  Being a contrarian investor, I decided to....  go along with the crowd.  The price is way too high.  Here are my thoughts:
shareworld - Ocado