The Lemon Fool

I've just signed up for a trial with Sharepad. Initial impressions are encouraging but there is a learning curve to climb.

Looking at, say, just FTSE100 companies, I see that they are generally marked as "Outperform" ,"Hold" or occasionally "Buy" but there are none marked as "Sell". The same is true when it comes to FTSE350. It seems strange to me that a platform can list shares in this manner but have NO "sells".

Even the likes of Petrofac are marked as "Hold" (one would have no choice in the matter - the share is suspended!)

monabri wrote:I've just signed up for a trial with Sharepad. Initial impressions are encouraging but there is a learning curve to climb.

Looking at, say, just FTSE100 companies, I see that they are generally marked as "Outperform" ,"Hold" or occasionally "Buy" but there are none marked as "Sell". The same is true when it comes to FTSE350. It seems strange to me that a platform can list shares in this manner but have NO "sells".

Even the likes of Petrofac are marked as "Hold" (one would have no choice in the matter - the share is suspended!)

These are just broker ratings and as such pretty meaningless. We all know it takes a lot for a broker to put a sell recommendation on a company because it could harm their access to management. It’s a stupid game and the incentives are all wrong. I would concentrate on using the data but be careful as there are often errors. Only today I noticed all the FCF ratios for Burberry are wrong. Only last week I had to alert them to the Directors Holdings for Hargreaves Lansdown being wrong. Otherwise it’s a very useful tool for bottom up investors who can be bothered analysing a company. The articles on the home page are better than average too.

simoan wrote:

monabri wrote:I've just signed up for a trial with Sharepad. Initial impressions are encouraging but there is a learning curve to climb.

Looking at, say, just FTSE100 companies, I see that they are generally marked as "Outperform" ,"Hold" or occasionally "Buy" but there are none marked as "Sell". The same is true when it comes to FTSE350. It seems strange to me that a platform can list shares in this manner but have NO "sells".

Even the likes of Petrofac are marked as "Hold" (one would have no choice in the matter - the share is suspended!)

These are just broker ratings and as such pretty meaningless. We all know it takes a lot for a broker to put a sell recommendation on a company because it could harm their access to management. It’s a stupid game and the incentives are all wrong. I would concentrate on using the data but be careful as there are often errors. Only today I noticed all the FCF ratios for Burberry are wrong. Only last week I had to alert them to the Directors Holdings for Hargreaves Lansdown being wrong. Otherwise it’s a very useful tool for bottom up investors who can be bothered analysing a company. The articles on the home page are better than average too.

Thank you simoan for coming back to me on this and I can see the incentive for a broker to be cautious. I think broker views have been discussed in the past (perhaps on TLF) and "conclusions drawn". Intetresting that you've picked up on 2 data errors in a short time period.

(The 2025 forecasts for FCF ps for BRBY look a little optimistic).

monabri wrote:

simoan wrote:These are just broker ratings and as such pretty meaningless. We all know it takes a lot for a broker to put a sell recommendation on a company because it could harm their access to management. It’s a stupid game and the incentives are all wrong. I would concentrate on using the data but be careful as there are often errors. Only today I noticed all the FCF ratios for Burberry are wrong. Only last week I had to alert them to the Directors Holdings for Hargreaves Lansdown being wrong. Otherwise it’s a very useful tool for bottom up investors who can be bothered analysing a company. The articles on the home page are better than average too.

Thank you simoan for coming back to me on this and I can see the incentive for a broker to be cautious. I think broker views have been discussed in the past (perhaps on TLF) and "conclusions drawn". Intetresting that you've picked up on 2 data errors in a short time period.

(The 2025 forecasts for FCF ps for BRBY look a little optimistic).

The forecasts are based on broker consensus. The numbers for FY24 are from the most recent results. The summary page for Burberry shows P/FCF = 60 based on FY24. That’s wrong. It’s more like 12.5 based on 83p FCF at the current share price. If you go to the Green side and select the Ratios tab under Financials you will see all the FCF based ratios are wrong for FY24. FY25 FCF is anyone’s guess and I would ignore it.

simoan wrote:

monabri wrote:
Thank you simoan for coming back to me on this and I can see the incentive for a broker to be cautious. I think broker views have been discussed in the past (perhaps on TLF) and "conclusions drawn". Intetresting that you've picked up on 2 data errors in a short time period.

(The 2025 forecasts for FCF ps for BRBY look a little optimistic).

The forecasts are based on broker consensus. The numbers for FY24 are from the most recent results. The summary page for Burberry shows P/FCF = 60 based on FY24. That’s wrong. It’s more like 12.5 based on 83p FCF at the current share price. If you go to the Green side and select the Ratios tab under Financials you will see all the FCF based ratios are wrong for FY24. FY25 FCF is anyone’s guess and I would ignore it.

Quick follow up... having checked the cashflow statement for Burberry it seems the P/FCF shown by Sharepad is correct and it is ~60 based on FY24 results. Apologies for that, but I got really confused because Stockopedia shows P/FCF = 12.5 but it is that figure that is wrong. I checked how Stockopedia calculate FCF and it seems they use the same methodology for all companies and do not include lease payments in FCF, which is clearly absurd for a retailer trading through physical outlets. So, the Sharepad FCF ratios for FY24 are correct.

monabri wrote:Looking at, say, just FTSE100 companies, I see that they are generally marked as "Outperform" ,"Hold" or occasionally "Buy" but there are none marked as "Sell". The same is true when it comes to FTSE350. It seems strange to me that a platform can list shares in this manner but have NO "sells".

Brokers rarely have SELL ratings.

I picked a random broker report and the small print says 3% of their recommendations are sells.
Another broker has no current sell recommendations.

I would disregard their Buy/Sell recommendations and I would disregard the target price as well, as these are often optimistic. The only useful part seems to be their forecast earnings.