Petrofac (PFC) - Hold or sell?

[grimer]

Petrofac seems to be bleeding again in quite a serious way. Has anybody set stop losses? Have they been triggered? What are your thoughts on the current share price movements?

[kempiejon]

Seems Petrofac is offering an unlikely high yield, as such it's either a great value deal mispriced by the market or the dividend is for the chop. I think there are better places for ones money in the oil and gas market where I think PFC operate. If it is the first of my suggestions it's not a question of hold of sell but a buy, if everyone else shorters included know better a screaming sell.
Holders why not wait for the next results, see what happens to the dividend, wait for knees to stop jerking and have a little wait to see what these short term fluctuations can shake out?

[Wizard]

Seems Petrofac is offering an unlikely high yield, as such it's either a great value deal mispriced by the market or the dividend is for the chop. I think there are better places for ones money in the oil and gas market where I think PFC operate. If it is the first of my suggestions it's not a question of hold of sell but a buy, if everyone else shorters included know better a screaming sell.
Holders why not wait for the next results, see what happens to the dividend, wait for knees to stop jerking and have a little wait to see what these short term fluctuations can shake out?

I guess part of the question is whether we are talking a cut or a full suspension. A 50% cut with a quick recover would still make this a decent share frkm an HYP perspective. Even if there was a 50% cut I wonder if there would be much further capital downside unless it was accompanied by a big profit slide, surely the whole SFO saga is priced in.

Terry.
(Holding, still in small profit and pondering)

[Clitheroekid]

If there's one thing I've learned from the Carillion saga it's that one ignores the amount of shorting at one's peril.

The short interest at PFC has more than doubled since the end of May to 8.67%, and the trend is very much on the up at present.

Like it or not, the people who are shorting are (1) on the inside; and (2) betting vast amounts of money. Compare this with the average private investor who (1) has no inside knowledge - or even access to credible inside rumours; and (2) is investing relatively trivial sums that even if the inclination were there wouldn't justify the hours of intensive research put in by the professionals.

Carillion is a classic example of a share that the professionals knew was in serious trouble, yet right up to the crash there were plenty of perfectly well argued and rational posts from private investors extolling its virtues. The difference was that they didn't know what was really going on.

If it's a toss-up between whose view of the market carries more credibility it's a no-brainer.

I would say that anyone who buys shares that are in the top 10 of the shorting `chart' is a high risk gambler rather than a serious investor.

[Bouleversee]

If there's one thing I've learned from the Carillion saga it's that one ignores the amount of shorting at one's peril.

The short interest at PFC has more than doubled since the end of May to 8.67%, and the trend is very much on the up at present.

Like it or not, the people who are shorting are (1) on the inside; and (2) betting vast amounts of money. Compare this with the average private investor who (1) has no inside knowledge - or even access to credible inside rumours; and (2) is investing relatively trivial sums that even if the inclination were there wouldn't justify the hours of intensive research put in by the professionals.

Carillion is a classic example of a share that the professionals knew was in serious trouble, yet right up to the crash there were plenty of perfectly well argued and rational posts from private investors extolling its virtues. The difference was that they didn't know what was really going on.

If it's a toss-up between whose view of the market carries more credibility it's a no-brainer.

I would say that anyone who buys shares that are in the top 10 of the shorting `chart' is a high risk gambler rather than a serious investor.

If you are correct, that is illegal isn't it? And if they can get away with it, shorting should be banned. Bad enough them selling their own shares but borrowing other people's to sell them short is something else. I agree it's very risky to buy shares which are being seriously shorted but facing up to selling existing holdings in these circumstances is more difficult and by the time one wakes up to it, it is often already too late. I feel reasonably optimistic about PFC but pessimistic about CLLN and IRV. Is there any hope they will recover from their present low point> I see Balfour Beattie has produced better results, though I don't think it has done much for the price, so should we consider that while there's life there's hope or ditch all these losers? I have to say I agree with the poster who is going over to passive investing. I have had more than enough of this caper and would like my life back, what's left of it.

[Gersemi]

Even a 50% dividend cut makes PFC a reasonable divi payer with scope to significantly and sustainably grow the divi pay out once the SFO business is cleared?

One thing I have learned while HYPing is that a share rarely cuts by 50%. Nearly always it either carries on as before or cuts the dividend by 100%.

I've no idea which Petrofac will do, but I'm glad I don't hold this share, I've got enough disappointers in my portfolio.

Gersemi

[Wizard]

...I've got enough disappointers in my portfolio.

Sadly, I seem to be seeing that sort of comment all too often at the moment.

Terry.

[jackdaww]

...I've got enough disappointers in my portfolio.

Sadly, I seem to be seeing that sort of comment all too often at the moment.

Terry.

===========================

there have indeed been many disappointers in many HYP portfolios lately .

how long to self heal ?

[monabri]

If it wasn't for AQR shorting at 4 to 5 times everyone else then shorting levels would be half current (visible at 0.5% and above) levels.

[monabri]

Top up time is getting closer. Might not quite get there, never mind.

Fred - at what point would you consider a top up?

[Bouleversee]

Top up time is getting closer. Might not quite get there, never mind.

Fred - at what point would you consider a top up?

Considering this is still risky, I am looking at 400p or lower. I regret not buying more a few weeks back sub 400p. But I am alert to the risks despite my deep value opinion.

I wouldn't bank on it Fred. Seems to be shooting up this a.m. I doubt it will go down before the div. unless they announce a cut or worse results than expected. My last top up was at 428p and it was back over that when I looked just now, though as we all know, I could be eating my words any minute.

[Bouleversee]

https://www.investegate.co.uk/petrofac- ... 06279193O/

Does this change anyone's views?

[BreakoutBoy]

Couldnt give a stuff about the finding as it appears a fair trial didn't occur.

At this point I don't think a fair trial is likely or possible in an Italian court. Recently Italian justice in action has been depressingly awful: See for example Meredith Kercher case.

[Bouleversee]

It is extraordinary that a court could impose fines and penalties without a fair trial. Where does the European Court of Justice come into this? Shorters paradise, however.

[monabri]

In time the truth will out. Still, a personal fine of that level will have to be offset against the £13 million Asfari family interim dividend.

So that's the total reduced to £12.7m ... problems problems! The timing of this is a bit coincidental with the trading update due.

Still, Italy is such a paragon of virtue in business..it's well known for it!

[Alaric]

It is extraordinary that a court could impose fines and penalties without a fair trial.

I don't think it was actually a court, rather the Italian National Commission for Companies and the Stock Exchange ("CONSOB"), which sounds to be rather more of an FCA style body. The FCA as we know can enact all sorts of penalties and suspensions outside the safeguards of a regular civil court.

[Bouleversee]

I see. So then you have to go to court to get it overturned. Daft that CONSOB doesn't have to hear both side of the story anyway. Perhaps it's all been set up by shorters.

[grimer]

In time the truth will out. Still, a personal fine of that level will have to be offset against the £13 million Asfari family interim dividend.

So that's the total reduced to £12.7m ... problems problems! The timing of this is a bit coincidental with the trading update due.

Still, Italy is such a paragon of virtue in business..it's well known for it!

I think it might actually be €685,000 (€300k fine and €385k confiscation of assets).

[monabri]

You're correct. He'll have to take it out of the final dividend then to spread the load!

He'll probably spend as much defending the case!

[dspp]

As a quick aside didn't Brinded just step down at BHP to fight an Italian legal action. What is it about Italy ?

http://royaldutchshellgroup.com/2017/08 ... -and-king/

regards, dspp