Tag: Argentex

Argentex + Podpoint + M&S Problems

My wife has suggested we buy some Marks and Spencer (MKS) shares after the shares fell by 5% after a reported cyber attack. She is one of their customers and certainly the business does seem to have improved in the last year after some years of disappointing results. But on-line orders have been halted which does not bode well for the competence of its IT management. I will study it before making a recommendation but at a glance it looks a quite low-growth business with a low dividend yield so even if it is temporarily cheaper it does not inspire immediate enthusiasm.

Last week the out of the blue bad news for Argentex (AGFX) shareholders was the suspension of the shares after “the company experienced a rapid and significant impact on its near-term liquidity position, driven by, inter alia, margin calls linked to its FX forward and options books”. It clearly needs a bale-out from a trade buyer or other rescue financing. It seems obvious that they had not adequately hedged their FX positions and has come in for criticism for not getting the basics of such a business right. Even experienced investors have been caught as a result and clearly this kind of business might be one to avoid.

Another casualty last week was Pod Point Group (PODP) who announced problems with bad debts and likely takeover offers. It is clearly in major financial difficulties and needs rescuing. Pod Point provides electric car charging devices and services which at a glance should be a major new demand area. The company listed in 2021 but has lost more than 97% on the share price since then. So much for great ideas!

I recall reading the admission document before the IPO and the risk warnings were numerous plus limited information on the competitors which included major energy companies. I did not invest then on the basis it was best to wait and see and it’s been downhill ever since.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Breaches of the Peace and Stockmarket Trends

The demonstrations in London and other cities against Israel are clearly “breaches of the peace” and should have been prevented. They were not simply peaceful demonstrations calling for a ceasefire in Gaza. The police are being way too feeble in enforcing the law and should call in the army if they feel that they do not have sufficient resources to enforce calm.

A ceasefire by Israel is not going to happen unless Hamas releases the hostages they hold and stop firing rockets into Israel – that also requires Iran to stop funding the attacks on Israel by Hamas and Hezbollah.

The demonstrators against Israel are being completely unrealistic in their demands. Palestinians may have some grounds for complaints about their treatment in Gaza but they are not helping to resolve their problems by the recent terrorist attacks on ordinary civilians.

Stockmarket Trends

Have we reached the late stage of bear market capitulation as Paul Scott suggested last week? I certainly get that feeling so far as small cap stocks go. Good news has little impact while bad news causes abrupt share price falls.

Last week the main good news was that I had sold shares in Fireangel (FA.) and Strix (KETL) some time ago thus avoiding big losses, For example Fireangel has received a bid at 7.4p when I sold for a small loss in 2016 (originally bought at less than 300p in 2014). Reason for sale? Total lack of confidence in the management. Strix I held onto for too long resulting in a 36% loss. The company went into “diworsification” with some unwise purchases and the CFO has quit. Moral: it’s never too late to sell.

Safestyle (SFE) has been suspended and is “game over” with a likely nil return which I held briefly in 2016. Incompetent management seemed to be the problem.

CAB Payments (CABP), a payments business that only recently listed lost three quarters of its value after a profit warning last week. Moral: don’t buy new listings – wait until the business model is proven. I did not hold it. Similar problems at Argentex (AGFX) after the CEO left abruptly.

Difficult to justify buying small cap stocks even at current prices when big oil and mining companies are paying such high dividends and interest on cash deposits can be as high as 5%.

Rishi Sunak may have stabilised the UK economy after the Truss debacle but fears of a prospective Labour Government are undermining confidence in the stock market, particularly by foreign investors. With UK taxes too high there are clearly many people sitting on their hands waiting to see which way the economy trends.   

Roger Lawson (Twitter https://twitter.com/RogerWLawson  )

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