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Kensington Mortgages,anyone Invest?


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I know lots of folk on here are fond of debt collection agencies but Kensingtons share price has nearly doubled in 6 months :o Can`t beat them join them? They must be ripe for a Take Over IMHO ;)

http://firstrung.co.uk/articles.asp?pageid...articlekey=1506

It's a crap sub-prime lender and the Directors have been selling. (If anyone thinks the recent RBS or Barclays bad debt figures are worrying, wait till you see what happens to sub-prime in difficult times.)

Most analysts have a target price of 1000 (currently about 1200).

I wrote an investment brief about 6 weeks ago and gave 'em 650 which I thought generous.

If anyone made them an offer I bet they'd bite their hand off.

SELL.

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It's a crap sub-prime lender and the Directors have been selling. (If anyone thinks the recent RBS or Barclays bad debt figures are worrying, wait till you see what happens to sub-prime in difficult times.)

Most analysts have a target price of 1000 (currently about 1200).

I wrote an investment brief about 6 weeks ago and gave 'em 650 which I thought generous.

If anyone made them an offer I bet they'd bite their hand off.

SELL.

Is it a dog with fleas, and are you Gordon Gekko? :P Seriously 650p?? :o

Edited by Converted Lurker
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Is it a dog with fleas, and are you Gordon Gekko? :P Seriously 650p?? :o

I am Tanqueray Gekko which is very different.

I write for the General Reader (who knows Ancient Greek and Aramaic as Enoch Powell, once quipped).

Numis Securities have a target price of 785 which is only slightly less wimpish than 1000....

A bid is possible. Just before the last property crash in the eighties, banks were buying up estate agency chains (only to close them within two years). Bids gravitate towards overpriced companies in fashionable sectors like drunks to a pretty girl in a bar.

Kensington Directors' recent Sales: Birch 1.3m squiddlies, Jones 650k squiddlies, Tomsett 1m squiddlies, Maltby 1m squiddlies etc. (These figurers are approximate and off the top of my head - er...Directors NEVER take a million quid out of their companies unless they know something. )

THEY KNOW THE QUALITY OF THEIR LOAN BOOK IS DETERIORATING.

(Berkeley, Wimpey and Persimmon Directors have also been offloading - although to be fair to Pidg at Berkeley he's been candid and upfront for a longtime and Berkeley is a smart company.)

If you fancy a punt Sterling Energy is as good as any.

Edited by Euphorion
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I know lots of folk on here are fond of debt collection agencies but Kensingtons share price has nearly doubled in 6 months :o Can`t beat them join them? They must be ripe for a Take Over IMHO ;)

http://firstrung.co.uk/articles.asp?pageid...articlekey=1506

I think it's an error to confuse Kensington with a Debt Collection agency.

Debt Collectors specialising in voluntary insolvency agreements are certainly flavour of the month. But their income stream is not as sound as analysts think.

Kensington doesn't generate its profits from fees linked to debt but from issuing debt itself - this is fundamentally different and on an exponentially higher level of risk. They are completely different.

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  • 8 months later...

Today 805p.

Kensington Mortgages

The idea of moving out of first into second mortgages is bonkers. Sub-prime borrowers are facing less than 2% wage increases and 7% real inflation. They ain't a good bet. So sub-prime lenders, no matter how fancy their actuarial stats get, are the same. Furthermore, to move from first mortgages where you pick up the crumbs that the big banks don't want is fundamentally different from entering the door-stop loan-shark market.

There's much worse to come. I wouldn't buy Kensington at 500p. There are no barriers-to-entry in this market and the relaxation of credit standards in major banks has given Kensington an almighty shove into riskier and riskier lines of business. You can go into riskier stuff if the premiums are there: but they ain't. (Warren Buffett has moved into Extreme Risk markets for example but he ain't 'arf charging you.) Anyone who has been in the markets for 20 yrs + will tell you the same story. The young turks are a) writing new business with no regard to risk and B) accepting returns which assume no risk.

Wrigglesworth is a middle-aged turk. He's also wrong.

In property, in whatever form, you make serious money betting against people who think TWO PAIR is a FULL HOUSE. But they always do. It's like being a primary school teacher. How many cards are the same ? Duh two. So what do you have ? A Full House !!!! ok let's go back to basics and count the spots on the cards.... ah ha.. two pair !! but we thought it was a full house price...oooh dear...

2pearBTL is my new slogan.

The surest sign of a Recession is when you think buying another firm is cheaper than expanding your own capacity. So rather than investing in new capacity, you buy old capacity you think you can improve on. That's about where we are at. There's nothing I want in the 'new capacity' range - it's just too expensive. Marginal Costs are at their highest ratio to Marginal Revenue for 40 years. But the current wave of acquiring 'old capacity' is no better. The MC/MR ratios are still rubbish....unless you are a private equity fund which gears up and exits. But this is the greater fool theory of capitalism, not true entrepreneurial capitalism. Well, the absence of entrepreneurial capitalism and the prevalence of greater fool capitalism sends out a huge BUYER BEWARE signal.

Having put my head on the line on Kensington and the sub-primers, I'll also predict a collapse in the restaurant trade in Central London - another clear sign of recession. Why ? Because as it currently stands, there's no old or new lease, no old or new business, you can buy that will generate the profit/capital outlay ratio you require. This means, in effect, you buy a greasy spoon cafe for 400k and make perhaps 50k a year (12.5% having: cleaned toilets, paid staff, paid accountant, complied Health & Safety,..........the list is endless...........) Now let's supoose you're a great chef and up the revenue... but this isn't going to you , on an accountancy basis it should be allocated to the overpayment you made in the first place....

There are thousands of these fleas jumping all over dogs all over the British economy.

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  • 440 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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