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Tom Winnifrith BearCast 8 February - A scallywag to a buffoon, Ken Brooks to Zak Mir & MTV at 0.00p

By Tom Winnifrith

8 February 2016 07:44

A wide ranging podcast starts with comments on Eden Research, Ken Brooks and the abject failure of the FSA/FCA to protect investors. Then it is onto three shite companies starting with the letter M : Magnolia Petroleum (MAGP), Motive TV (MTV) and Mosman (MSMN). I look at Circle Oil (COP), Trinity (TRIN) and Tethys (TPL) as well as Servision (SEV) where my target price remains 0p. Then a brief stockmarket lesson for the Sith Lord on what a dead cat bounce actually means and a look at Aureus Mining (AUE).

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Comments

Martin

8 February 2016, 09:14

Tom,

You should take a quick look at the STAR accounts, bad debt against their receivables is about 20% and inventories are through the roof and they have already admitted that prices are being squeezed on their main product because of competition, I think they will probably have to write the inventories down because of that. They also made a $700k profit in 2013 that was restated as a $1.8k loss a year later after accounting changes.

Martin
Steve

8 February 2016, 11:37

Martin, unlike Servision, STAR are transparent about the reason for their bad debts and is related to the failure of a customer in Ukraine and STAR have provided against it but apparently the customer may possibly still make some repayments.

Inventory should be held on the balance sheet at around cost, so even if margins decrease it should still not lead to write downs – although of course they might end up selling older stock below cost (or chuck it out).

I think there are a lot fewer open questions around STAR compared to Servision.
David Russell

8 February 2016, 16:30

Great Bearcast Tom. Just finished work and my wife noticed R4E as issued more shares I can not look at the RNS because I am already down a fortune. We have not got a chance of making money in this market Tom. The companies am doing opposite to what they say my mate. They will keep issuing shares and consolidate at an unrealistic rate.:(