The Lemon Fool

Hi Folks,

In my quest to become a half decent private investor, I have noticed that at times I've bought a share, only for it's value to either go up or down by a reasonable margin fairly soon after my purchase. Or just that a particular holding of ours will see a reasonable 'blip' in it's market price from time to time. Of course, much of the time, we hardly register this, since we only tend to look at our foli either on the last weekend of the month or when we are planning on buying some more stocks.

Anyway, sometimes we decided to investigate the "cause" of the recent blip only to discover that it comes down to some words and numbers and the interpretation of, within a "Trading Statement". Recently I've contemplated whether I should "become more interested" in these TSs. However, with holding about 25 or so different firms, plus a hectic day job and family life, I'm wondering whether this could be a tad too obsessive. I've love to know what others to do, and whether waiting for a TS is "timing the market" etc. etc.

Also, regards what to look for online on companies' investor-related pages, are TSs basically anything that could be mentioned as "interim report", "final results", "Q1, Q2, Q3, Q4 results", "trading updates", "prelimary reports", "H1 results", etc. etc? I have a quick look at 3 of the firms we currently own, Focusrite TUNE, Bodycote BOY and Croda CRDA, at their "financial calendar" sections and it looks as the frequency of publication is not necessarily set in stone across the board, but it's likely that each company itself will have it's own pattern for releasing these pieces of news. By way of example:


So what I was wondering was firstly how worthwhile is this pursuit i.e. reading TSs prior to purchasing a stock (I'm guessing that's company specific), and is there any pattern at all behind when this statements are.

All comments, views, advice welcome,
Thanks Matt

TheMotorcycleBoy wrote:So what I was wondering was firstly how worthwhile is this pursuit i.e. reading TSs prior to purchasing a stock

It comes down to how much due diligence you think you should do.

There's a current example. It's been observed that Centrica, if they maintain their dividend, stands at a 13% yield. There's also an imminent trading statement which it is speculated may make an announcement about future dividends. You could buy before the statement, but then you are taking a risk as to what it might say. If you don't read it and still decide to buy, you are acting on incomplete information.

Alaric wrote:

TheMotorcycleBoy wrote:So what I was wondering was firstly how worthwhile is this pursuit i.e. reading TSs prior to purchasing a stock

It comes down to how much due diligence you think you should do.

There's a current example. It's been observed that Centrica, if they maintain their dividend, stands at a 13% yield. There's also an imminent trading statement which it is speculated may make an announcement about future dividends. You could buy before the statement, but then you are taking a risk as to what it might say. If you don't read it and still decide to buy, you are acting on incomplete information.

Yes, that's what I'm thinking.

Good example too, BTW.

So what's your view regarding the frequency and naming of trading statements? I guess that there is no pattern across the board, but rather that it's just a case of familiarising oneself with the financial calendars' of one's holdings.

Matt

TheMotorcycleBoy wrote:So what's your view regarding the frequency and naming of trading statements? I guess that there is no pattern across the board, but rather that it's just a case of familiarising oneself with the financial calendars' of one's holdings.

Quite a lot of companies put out trading statements covering their first and third quarters of trading.

Examples: Derwent London, Great Portland Estates, Ocean Wilsons Holdings, Smith & Nephew, Unilever.

Unilever used to report quarterly until 2009 when its new CEO decided that this fostered too much of a short-term focus, so he switched to half yearly reporting with statements covering the trading in Q1 and Q3 (article below)

https://www.theglobeandmail.com/report- ... e36538572/

SalvorHardin wrote:

TheMotorcycleBoy wrote:So what's your view regarding the frequency and naming of trading statements? I guess that there is no pattern across the board, but rather that it's just a case of familiarising oneself with the financial calendars' of one's holdings.

Quite a lot of companies put out trading statements covering their first and third quarters of trading.

Examples: Derwent London, Great Portland Estates, Ocean Wilsons Holdings, Smith & Nephew, Unilever.

Unilever used to report quarterly until 2009 when its new CEO decided that this fostered too much of a short-term focus, so he switched to half yearly reporting with statements covering the trading in Q1 and Q3 (article below)

https://www.theglobeandmail.com/report- ... e36538572/

Thanks Salvor,

I choose SN as an immediate example to follow and I went here:
http://www.smith-nephew.com/investor-ce ... s-archive/

this is seems to speak of a fairly well organised firm. Very hierarchical in listings etc. I see the Q1, Q2, Q3, Q4 formats differ very slightly and furthermore I see that the main focus re. the figures is on just the revenue.

I also noticed....that it was also interesting to read the analyst conference call transcripts. Of course some of the answers could well be very "politician style" but I don't know the firm well enough to forthrightly comment as to that. This is very useful further education, perhaps some of you lot will say "Matt you should've have been doing this from day one", since in a few weeks when I next get paid, I'll probably top-up or add a new holding. I've been working on the shortlist of about 4-6 companies, but now I have this information, I can see that I have some additional pointers regarding "making the best choice at the time".

Many thanks
Matt

Matt, what I do is quickly scan the RNS posts on Investigate each morning. I look at the list for FTSE100, FTSE 250 and AIM, which covers most of the shares that I hold. I only look at the titles unless it is a trading statement, results, or something else of interest.

This takes about a minute, but obviously looking deeper takes longer. You might still miss something that fails to appear on Investigate, but usually ADVFN will have it, and I have a list of favourite boards there which usually list news items about that company. You don't have to read the boards, much of which is rubbish anyway.

TJH

tjh290633 wrote:Matt, what I do is quickly scan the RNS posts on Investigate each morning. I look at the list for FTSE100, FTSE 250 and AIM, which covers most of the shares that I hold. I only look at the titles unless it is a trading statement, results, or something else of interest.

This takes about a minute, but obviously looking deeper takes longer. You might still miss something that fails to appear on Investigate, but usually ADVFN will have it, and I have a list of favourite boards there which usually list news items about that company. You don't have to read the boards, much of which is rubbish anyway.

TJH

Many thanks for this TJH,

I wish I had come across this site earlier. This looks really useful. I was also able to confirm that I wasn't "missing something" based on an enquiry I'd been making into a possible addition to our foli (Qinetiq QQ.). I'd been searching for their Q3 trading statement, a PDF with some useful revenue/profit figures, from their investor area in their site. All I'd found thus far was:

QinetiQ Group plc (QinetiQ or the Group) today issued a trading update covering its third quarter.
Then just a few paras of words, no table of comparision revenue or profit figure. Feeling short changed I've been searching around an elusive PDFs. However after your "investigate" suggestion, I discovered, by following a link from there, that what I'd found on the QQ site, was the sum total of that trading update! i.e. from investigate:

https://www.investegate.co.uk/qinetiq-g ... 00035989O/

thanks, Matt

TheMotorcycleBoy wrote:

tjh290633 wrote:Matt, what I do is quickly scan the RNS posts on Investigate each morning. I look at the list for FTSE100, FTSE 250 and AIM, which covers most of the shares that I hold. I only look at the titles unless it is a trading statement, results, or something else of interest.

This takes about a minute, but obviously looking deeper takes longer. You might still miss something that fails to appear on Investigate, but usually ADVFN will have it, and I have a list of favourite boards there which usually list news items about that company. You don't have to read the boards, much of which is rubbish anyway.

TJH

Many thanks for this TJH,

I wish I had come across this site earlier. This looks really useful. I was also able to confirm that I wasn't "missing something" based on an enquiry I'd been making into a possible addition to our foli (Qinetiq QQ.). I'd been searching for their Q3 trading statement, a PDF with some useful revenue/profit figures, from their investor area in their site. All I'd found thus far was:

QinetiQ Group plc (QinetiQ or the Group) today issued a trading update covering its third quarter.
Then just a few paras of words, no table of comparision revenue or profit figure. Feeling short changed I've been searching around an elusive PDFs. However after your "investigate" suggestion, I discovered, by following a link from there, that what I'd found on the QQ site, was the sum total of that trading update! i.e. from investigate:

https://www.investegate.co.uk/qinetiq-g ... 00035989O/

thanks, Matt

Like TJH, I scan Investegate every morning. FT100, FT250 and a few other specific companies that I hold. It only takes a few minutes - unless there is a serious announcement to digest.

I read statements but just to keep myself informed, almost never to actually do something about them in a knee-jerk sort of way. Trying to follow all of them and react accordingly is a waste of time and a mug's game IMO.


GS

To be clear, what I don't want to do is increase my workload or my blood pressure by frequently reading TSs and reacting to changes. Though I do think that TJHs hint on "investegate" was a useful one, so thanks, it's probably an easy central place to catch up on company activity.

I think my best take away from this (like Alaric stated) is how much "due diligence" I should be applying prior to a stock purchase. And so a good action for me is to be more mindful of the financial calendars of my holdings and keep abreast of recent Q1, H1, and related announcements and hence the underlying "feelgoodness" of a company. Like I mentioned earlier in my reply to Salvor, the Smith+Nephew site which lists transcripts from recent analyst conference calls is a very useful feature indeed I think, for relative newbie such as I, to get more of a feel for what I'm investing in.

thanks
Matt