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Petrofac charts

Clitheroekid
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Petrofac charts

#151241

Postby Clitheroekid » July 9th, 2018, 6:09 pm

I was looking at this article before, which contains a detailed anaysis of the PFC share price movement from a chartist's perspective - https://www.ii.co.uk/analysis-commentar ... -ii506401/

It all sounds to me like pseudo-scientific codswallop! In fact, so incomprehensible are his comments - The dip off the blue trendline is a three-down (corrective) to the Fib 50% support on a momentum divergence - that I'm not even sure whether he's recommending a purchase or not.

As I understand it (which admittedly I don't) chartism is an attempt to predict future price movements by watching trends in the SP. However, no chartist can possibly predict something like the SFO enquiry. Neither do chartists, so far as I know, factor in a prediction for the price of oil, which is of critical importance to the PFC share price. I therefore can't see what possible credibility they can have.

But it's clear that a lot of people do take them seriously, so have any Fools tried using chartism, and if so with what degree of success?

Incidentally, I know that there's a Technical Analysis board, but I've deliberately avoided posting there as by definition the only people who visit it are likely to be believers, and I'm looking for input from atheists and/or or agnostics as well.

More generally, I did very well with some PFC trades recently, and I've been waiting for the SP to drop back further before having another dabble. In the absence of some bad news I can't see it dropping back much below the 520 mark, but I'd be interested to know what others think.

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Re: Petrofac charts

#151326

Postby MrCake » July 9th, 2018, 10:10 pm

It all sounds to me like pseudo-scientific codswallop!


My feelings exactly. I've always thought the charts with their selected periods, lines, dots, shading and "meaningful" analysis could be used to "prove" whatever you wanted.

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Re: Petrofac charts

#216364

Postby spasmodicus » April 20th, 2019, 3:04 pm

Neither Technical nor Fundamental analysis can do much to predict a plunge of 11% like that of PFC last Thursday to 467p as more bribery revelations emerged in Iraq.

I suspect that any competent company seeking contracts and dealing with Johnny Foreigner in the Middle East, or anywhere else for that matter, still probably has a budget for bungs, variously labelled as lobbying, gifts, commissions, expenses, incentives, signing bonuses, tender fees, planning gains, charity, aid, social infrastructure projects and the like, to be dished out when lubrication is needed to the appropriate authorities, agents or organisations. However, companies must exercise great diligence by taking care not to cross the line where any of this may be labelled as corruption. Petrofac itself says "Petrofac has policies and procedures in place designed to ensure that we operate at the highest levels of compliance and ethics."

Jolly good show and of course, none of this bad stuff ever goes on in the UK where our guardians, the SFO, are tirelessly poised 24/7 to investigate, uncover, prosecute and root out corruption and malfeasance before it can degrade our impeccable moral integrity. This article from June 2018 illustrates some of the background to Petrofac’s woes
https://www.theguardian.com/business/2018/jun/25/oil-firm-petrofac-tory-donor-ayman-asfari-refusing-pay-bill
These things do sometimes provide opportunities for investors and I bought a modest holding of PFC, when it last plummeted in February this year to below 400p. Following the SP’s steady rise (to over 500p), I set a stop loss at 450p which was fortunately not triggered on Thursday, as I still think that there is value at that level in this stock.

At the current share price market cap is 1.62bn, book value 1.009bn (end 2018 accounts) giving a price to book of about 1.6. The order books do not seem to have been severely affected and before the scandal broke at the end of 2017, p/b was about 2.7 (3bn/1.12bn) so it would seem that the possibility of a pretty big fine is already cooked into the share price. It wouldn’t be surprising if a fine was never paid, given the SFO’s abysmal record. See

https://www.legalbusiness.co.uk/blogs/serious-failings-first-big-defeat-for-osofsky-as-sfo-fails-in-tesco-prosecution/

I’m holding on to PFC for now.
S


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