Video. Richard Crow (alias Cockney Rebel) discusses 13 stock ideas.

15th Aug by Paul Hill

13 comments 1562 reads

On today's Exchange live, I was delighted again to speak to UK stock picker Richard Crow (alias Cockney Rebel) – including:

00:00 His investment approach & what he looks for in turnarounds
08:00 Equity outlook & why he’s gone to 80% cash
20:20 Card Factory
23:40 Is the unwinding of the Yen carry trade a sell signal?
25:50 CMC Markets
30:50 Avon Technologies plc
34:25 Capita & recent CFO buying
41:05 Creightons Plc
46:30 Carclo
54:45 Mpac Group
59:15 Reach plc
63:25 Kier Group
66:55 Luceco Group & Dialight
71:05 Beeks Group
74:30 Marks and Spencer

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About the Author

Paul Hill

Premium Member

Stocks owned : EQLS, AGFX, Pfizer, Bristol Myers, Roche, WATR, VCT, MBH, ASTO, IOM, TR25, ESYS, ELCO, IHC, Paypal & AOM Elsewhere, I'm also paid by Vox Markets (as a contractor) to interview interview fund managers, capital market experts & companies (re EQLS, VRCI, BELL, FIN, AVG, AVCT, LLAI, VLG, FADL, SUP, ELCO, LORD , MPAC & ONC). I believe all these stocks are clients of Vox.Lastly my 24 year HIT RATE is only 62%. Meaning 38% of the time I lose money (ie often wrong) - albeit my winners are (on average) 1.5x larger than my losers. Please Do Your Own Research. more »

13 comments

Paul Hill

15th Aug

Valuation benchmarks wrt those stock discussed.

jonno

15th Aug

Hi Paul, according to Richard Crow's substack he has sold nearly all of his shares with one or two exceptions and is now mostly in cash. Richard is an accomplished investor, but whether he is clever or foolish in doing so I have no idea.

As for me I have taken a little profit around the edges, adding to a few holdings and trimming others, but in general remain fairly fully invested, as I did during pandemic and the GFK. I endeavour to focus on the company and not the share price but am not adverse to taking some profit if the price in my view is up with events or adding, subject to the availability of funds, if Mr Market throws a wobbly and offers me what I consider to be a bargain price.

I don't always get it right, but who does?

Paul Hill

15th Aug

Great points Jonno

illiswilgig

15th Aug

Another excellent exchange thank you both!

I have some history with Carclo (LON:CAR) . Many moons ago I bought Carclo (was originally the CARd CLOthing company) for around 20p when they exited their loss-making wiring business, a kind of low margin Volex which had developed from the original wire carding business. Which left them with

Injection moulding operation,
Aerospace OEM machined parts and cable assemblies Brunton/Jacottet business
WIPAC,
a couple of blue-sky ventures (one a Point of Care testing system)
and a joint venture CIT (Conductive Inkjet Technology) with Xaar (LON:XAR) for high speed inkjet printing of touchscreens.

Over the next few years CIT went from strength to strength on the basis of advance purchase orders from US Atmel corporation for huge smartphone contracts which funded the new manufacturing facility in Cambridge and bought out Xaar who supplied the print heads.

The share price rose to almost 500p iirc. I thought I was a genius.

Unfortunately the huge orders never came and Atmel closed the operation down while Carclo sold off CIT for a few bob and some massive write-downs amid a flurry of patent law suits.

The share price collapsed. As it did so the CEO who had put the whole edifice together retired and cashed in a lot of his chips.

Never mind I thought, the Injection moulding, Aerospace, PoC testing and WiPAC - who had by then become a leader in Supercar LED lighting design and production were worth more than the current valuation.

New management got busy. At the time Wipac was the most profitable division and desparate to turn the ship around they moved downwards from Supercar to luxury models and higher volume. But with yield problems at volume the auto majors reamed them with the contracts. Wipac went bust and was taken off their hands by the competition.

By now the blue-sky division with the Point of Care product had also proved to be a loser with no value leaving them with the injection moulding and aerospace divisions, massive writedowns and a huge pension benefit.

The smart money left a long time before I did. From memory I got out at around 50p but after some ill-advised averaging down at a massive loss.

There may be some value in Carclo (LON:CAR) today but I'm not at all sure. The injection moulding market has always been fiercely competitive for Carclo. I doubt that has changed? Though medical contracts can prove quite sticky once won, they have tended not to be very high margin. Probably because CAR has never had the scale of its competitors? I suspect its long been a punt on fixing the pension deficit? There just isn't anything left in the products or markets to provide the kind of profit growth and high rating that the Carclo of old promised but always failed to deliver?

It's always easy to see with hindsight? If the touchscreens had taken off - it could have been very different. IF Wipac had not been mismanaged it would still have been a winner. A classic study of mediocre management over-optimism coupled with below average ability. A massive and expensive lesson for me. Burnt into my brain.

Thought the backstory might be of interest to anyone wondering how Carclo was ever thought to be worth 500p and looking at the company today?

cheers

Mark

Paul Hill

16th Aug

Many thanks illiswilgig for the kind words.

Richard reckons Carclo is a promising turnaround opportunity. Plus if its DB pension deficit falls materially at the upcoming triennial valuation, then the shares will also look dirt cheap.

The Phoenix

16th Aug

Great vid Paul you must be doing something right with investing when you mentioned the 7 figure drawdown in covid out of interest what size pot did you start out with originally ? I seem to remember your long term yearly return average is double digits

Paul Hill

16th Aug

Yes, covid was really, really painful.... Blew right through my risk tolerance, albeit what doesn't kill you & all that malarkey

illiswilgig

16th Aug

You're welcome Paul, thanks for making the effort to share these - I really like the natural style of the discussions.

if its DB pension deficit falls materially at the upcoming triennial valuation, then the shares will also look dirt cheap.

Oh yes I agree. I didn't mean to be negative about the future. Just to look at what happened in the past. We need highly profitable successful companies in this country. Lots of them. So I wish them great success.

I just don't see it as a long term high margin high quality niche market leader company any more. More struggling to become TT electronics (LON:TTG) Now did you know - the TT stands for Tyzack and Turner, an old Sheffield edge tool making company...... but I digress..... :-)

Richard wondered why they were ever worth 400p (the SP was 500 before adjusting for dilution I think) - I attempted to answer that - primarily due to CIT and also Wipac supercar lighting (not the antennas). But they've gone.

Richard speculated that they might one day get back to 400p. I doubt that. The two remaining businesses are good but operate as contract suppliers in industries where margins won't achieve supercar lighting levels or tech printed touchscreen margins.

There probably is a good opportunity here. I certainly wouldn't bet against Richard.

Might be worth double if they can really get a grip of the pension deficit. Perhaps 90 - 120p if they can fix the pension deficit, reduce contributions and increase operating margins. In which case they'll have 10 bagged again. But that's a lot of if's and things to go right? It just doesn't float my boat - I'm looking for turnaround opportunities where new high margin products are launched into growing markets more than a quick fix? Each to their own?

Speaking of which I'm very pleased to see that Eleco (LON:ELCO) is now firmly back on an upwards track. I may well regret having sold to buy Celebrus Technologies (LON:CLBS)

cheers

Mark

Paul Hill

17th Aug

Many thanks Mark

Luckily I've owned Eleco since 2015, not sold any shares & still believe there's plenty of gas left in the tank.

Indeed I highlighted the stock to investors in Nov'23 at Mello as my #1 stock pick for 2023. Its up 65% since then to 136p from 82p.

Happy days for us both

bullhead

17th Aug

Going by his X account he is extremely unimpressed by our present government and their future plans for the country and it’s impact on share prices this seems at least in part the reason for him moving to cash

Paul Hill

17th Aug

Perhaps another reason for Richard's 80% cash position - could be that his portfolio has done brilliantly since the Oct'23 lows, and he simply wants to bank some profits & have a well deserved rest given the macro risks.

Thus allowing him to sleep soundly at night and reflect on the markets - whilst patiently reloading the gun again, looking for more recovery stocks to buy.

Indeed you haven't got to swing for every pitch.

BnB

17th Aug

I agree Paul. I’ve had a good run on a number of recovery stocks and sold a few last week to buy beaten up quality stocks in the US which fell far harder than UK “trash” in the volatility. I can see the sense in going to cash for a breather if you’re basically a trader, like Richard. Especially if you were concerned the volatility might bleed your way.

bullhead

17th Aug

Here you go Paul this is the post where he says going to cash because of future rise in CGT and a couple more

https://x.com/rebelhq/status/1...

He really really does not like Starmer and personally I agree with him

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Video. Richard Crow (alias Cockney Rebel) discusses 13 stock ideas.

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About the Author

Paul Hill

13 comments

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