KIER

[monabri]

I just noticed that KIER is now top of the shop in terms of the shorting at 13.82%. The visible shorting was zero on March 10th and has increased quite sharply over the months. Are they playing the "'it looks like Carillion" card or is there a major problem?

[OZYU]

I just noticed that KIER is now top of the shop in terms of the shorting at 13.82%. The visible shorting was zero on March 10th and has increased quite sharply over the months. Are they playing the "'it looks like Carillion" card or is there a major problem?

There is at least one investor who disagrees with the shorters, he/she bought around 55,000 share for about £450k at the back end of trading I noticed! A tad above my self imposed limit on an individual holding!


The last trading statement a few days ago was ok ish I thought. No more mind. But would not warrant in itself that level of increased shorting.


OZYU


I hold with no plans to increase. Sizeable divi coming up next month. I have been right before, and wrong before, like most of us. But I don't see this as another CLLN at the mo. Could be famous last words of course.

[monabri]

I see the uncrossed trade but not sure if I can see any buys of that level though..I might simply be looking at the wrong time slot.

16:35:01 20-Nov-2018 814.00 GBX 55,233 449,596.62 Uncrossed Trade

I've had a look at the financials and forecasts and it's a puzzle regarding that ( visible) shorting level.

[Alaric]

I've had a look at the financials and forecasts and it's a puzzle regarding that ( visible) shorting level.

Not a Company I follow, but I did notice in
https://www.kier.co.uk/media/2408/kier- ... t-2018.pdf

that Intangible Assets at 30th June 2018 (page 146) consisted of

Goodwill 560.2
Intangible Contract Rights 274.5
Computer Software 151.6
for a total of 986.3

If these assets were to become wholly or partly valueless, it would make a big hole in the balance sheet.

[Gengulphus]

I see the uncrossed trade but not sure if I can see any buys of that level though..I might simply be looking at the wrong time slot.

16:35:01 20-Nov-2018 814.00 GBX 55,233 449,596.62 Uncrossed Trade

For those who don't know the technicalities involved and wants to (*), when a stockmarket 'auction' happens (at market opening, noon and market close each day, and very occasionally in response to unusually rapidly-moving prices at other times), normal trading is suspended for a short period (typically 5 minutes or so). During that time, the stockmarket systems just accumulate limit orders (**) without trying to match buy orders up with sell orders to form trades when the limits allow a mutually acceptable price. As a result, the 'bid' price, which is the highest limit price of any buy order, can become greater than or equal to the 'offer' or 'ask' price, which is the lowest limit price of any sell order - something which is impossible in normal trading, because it would immediately result in orders being matched and the resulting trade eliminating one or more of them because they've been satisfied. That impossible-in-normal-trading state of the bid price being >= the offer/ask price is known as the market being 'crossed' (I don't know the exact origin of that term, but I can see why it might be considered reasonably appropriate).

If the market is crossed at the end of the auction, the stockmarket system settles on a price that allows orders for as many shares as possible to be matched (with various tiebreakers if there's more than one such price) and then does a trade that jointly performs all these matched orders at that price. It is a trade potentially involving multiple buyers and multiple sellers - e.g. A buying 3000 shares, B buying 1000 shares and C buying 6000 shares, satisfied by X selling 4000 shares, Y selling 4000 shares and Z selling 2000 shares, and all that is actually definitely known about it is that the total number of shares sold equals the total number of shares bought: nothing breaks it down further into a load of trades involving individual buyers buying from individual sellers (obviously it could be broken down that way, but any such breakdown would be completely arbitrarily chosen from typically many possibilities unless there happened to be only one buyer or only one seller involved, so it isn't). That one trade brings the crossed market to an end, i.e. 'uncrosses' it, and so is known as an 'uncrossing trade'. That's encoded in the original trade report as the trade having type "UT", and I imagine the description of it in monabri's post as an "Uncrossed Trade" rather than "Uncrossing Trade" is the result of a minor infelicity in whatever software converted that code to more human-readable form...

(*) I see no reason why the vast majority of HYPers need to pay attention to trade reports at all - in particular, normal broker accounts don't have the facility to enter orders directly into the stockmarket system at all (the broker can generally do so, and might choose to in the process of executing client orders, but even if they do, there may well be some translation of order details involved). But if one does want to pay attention to trade reports, it's a good idea to know what they mean if one doesn't want to risk drawing the wrong conclusions from them. Uncrossing trades are rather deceptive in that respect if one doesn't know what their technicalities, as OZYU's interpretation of this one as an investor making a £450k purchase illustrates!

(**) And a few other types, but that's much more detail than I want or need to go into here!

Gengulphus

[Arborbridge]

I've had a look at the financials and forecasts and it's a puzzle regarding that ( visible) shorting level.

Not a Company I follow, but I did notice in
https://www.kier.co.uk/media/2408/kier- ... t-2018.pdf

that Intangible Assets at 30th June 2018 (page 146) consisted of

Goodwill 560.2
Intangible Contract Rights 274.5
Computer Software 151.6
for a total of 986.3

If these assets were to become wholly or partly valueless, it would make a big hole in the balance sheet.

Carrying large goodwill always raises questions about value. It must have some value, that's accepted, but it could be argued that it is sometimes "tweaked" to justify overpaying for the stock of a takeover target. The less of it in the accounts, the better, and in Keir's case it does seem quite large.

[monabri]

My understanding of what happens after 4:30pm (and before 8:00am).

At 4:30pm, buying and selling for Dod's "mere mortals" is over.

For 5 minutes after this, there is the possibility of buying/selling if you pay for the privilege ( Direct Market Access , I believe is the term). In this window, one can make an offer to buy/sell shares but there are limits such that you can't make a silly offer...it has to be within a fixed (5% I think.) of the average price of a share after normal hours. In the 5 minute period, the computer will try to complete as many buys and sells as possible. The buys/ sells are ordered such that the biggest orders ( buy or sell) get processed first..the aim being to uncross (complete)as high a percentage as possible of buy/sell orders in the 5 minutes.

The uncrossed trade means that the outstanding " sells" on one side of the books (historical term) are matched with existing or new buys on the other side of " the books".

After another 30 seconds, the closing price is calculated taking into account all trades ( normal and in the 5 minute window). Thus we have a closing price.

The next trading day-

Normal trading starts at 8:00am, but there is a window just beforehand of 5 minutes...where those with access can buy/ sell. Same process of buys /orders and outstanding orders not completed from previous day followed by a 30 second period of recalculation to generate an opening price for "mere mortals".

[Gengulphus]

My understanding of what happens after 4:30pm (and before 8:00am).

At 4:30pm, buying and selling for Dod's "mere mortals" is over.

For 5 minutes after this, there is the possibility of buying/selling if you pay for the privilege ( Direct Market Access , I believe is the term). ...

That's the term, yes. You need to get an account that gives you DMA, and when I've investigated in the past, only a few brokers supplied them. Furthermore, they would only supply them to clients they can classify as more than just the usual "retail client" type: IIRC the requirements then were roughly speaking that one was an investment professional or had a sufficient level of recent trading experience or was a high net worth individual. I don't remember the exact numerical requirements or many other details, but I do remember reckoning that only a fairly small proportion of HYPers would meet any of them (I would personally have qualified in the "high net worth" category and might alternatively have scraped through in the "experienced investor" category on the basis of my pretty limited HYP trading plus my not quite so limited non-HYP trading). I don't remember it seeming especially expensive, but it did have a different charging structure to a normal account, and I might have found that it was notably more expensive than a normal account if I'd investigated it in more detail. But I never got that far, because I also found that being classified as a different type of client than "retail client" involved giving up various FCA protections, and I decided that a DMA account wasn't for me because I wanted those protections more than I wanted direct access to the stockmarket system. So basically, no point for me in investigating any further.

... In this window, one can make an offer to buy/sell shares but there are limits such that you can't make a silly offer...it has to be within a fixed (5% I think.) of the average price of a share after normal hours. In the 5 minute period, the computer will try to complete as many buys and sells as possible. ...

Not quite - that only happens at the end of the 5-minute (or somewhat longer if it's extended, as it sometimes is) period. No buys and sells are completed during it. One can detect signs of that in trades lists - e.g. today's list for Kier shows a "UT" trade at 16:35:10, with the last trade before it being an "AT" trade at 16:29:56; yesterday's list was similar, with the times being just a few seconds different (16:35:01 and 16:29:54); Mondays list similar again (times 16:35:29 and 16:29:42).

Also, on a somewhat more pedantic point, it's the number of shares traded that is maximised, rather than the number of buys and sells completed.

After another 30 seconds, the closing price is calculated taking into account all trades ( normal and in the 5 minute window). Thus we have a closing price.

No, there's a 30-second figure around, but it's not a delay after the end of the auction period and before a closing price is calculated. Instead, it's that the auction period isn't actually exactly 5 minutes in length - it's 5 minutes plus a random extra time in the range 0-30 seconds. At the end of that, the system calculates the price at which the maximum number of shares can be traded (with tiebreaking extra criteria if there are multiple prices at which that maximum number can be traded), completes all the buys and sells concerned at that price in the uncrossing trade, and that price also becomes the closing price.

That goes wrong if the market fails to become crossed during the auction period - i.e. the highest price at which anyone is willing to buy is less than the lowest price at which anyone is willing to sell. In that case (which only rarely happens for highly liquid shares, but more often the less liquid a share is), a maximum of 0 shares can be traded, any price at all will result in 0 shares being traded, and IIRC none of the tiebreakers will succeed in choosing a price for an uncrossing trade, but there's no need for such a price because there's no uncrossing trade. There is however a need for a closing price, and there are successive fallback methods to determine it if the market fails to become crossed - I don't remember them in detail, but do remember for instance that one of them involved a Volume-Weighted Average Price (or "VWAP") of trades that were completed towards the end of normal market trading

By the way, the reason for the random extra 0-30 seconds is to ensure that nobody knows in advance exactly when the auction period will end, to make it much more difficult for market participants with Direct Market Access to manipulate uncrossing trades and closing prices by entering extra orders or cancelling existing ones a split second before it closes. Or indeed try to manipulate each other into unwise trades that way, resulting in battles won by the one who can get their computers to split a second most finely!

Normal trading starts at 8:00am, but there is a window just beforehand of 5 minutes...where those with access can buy/ sell. Same process of buys /orders and outstanding orders not completed from previous day followed by a 30 second period of recalculation to generate an opening price for "mere mortals".

Again, it's a random 0-30 seconds added to 5 minutes to decide the exact length of the auction period, not a separate recalculation period. Computers are fast, and the computations needed to compute uncrossing trade, opening and closing prices not that complex: I'm sure they can be completed in a time period sensibly measured in milliseconds, or possibly even microseconds...

Gengulphus

[Walrus]

Personally I wouldn't consider this for the HYP. Too much accounting risk and reliance on the auditors opinion. Low margin and sensitive to estimation errors.

For me these types of share sit in the 'picking up pennies in front of a steam roller strategy. Invest in enough of them and you will get run over. The risk reward for me is just not there on this type of thing.

That being saud it coukd be a very well run company which is prudently run, I do not know. If I was to invest I would be trying to do as much dd on the management as possible.