Selling Stagecoach -30%

Decided to sell stagecoach – quite a heavy loss of 30% (adjusted for dividends paid).

Catalyst is strike news (though I dont think this will really have much effect) but actually for a while I have thought I was too early with my decision to go into this.

The logic is correct but I am much too soon.

I will look to re-enter at a more favourable price / time.

 

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Stagecoach Group – under-valued with a few moats

Just bought approximately a 10% weight in Stagecoach.

I think they are very good value at this price.  To break down the business they are a bus and train operator.

Income statement here:

So 73% profit Regional + London bus 21% rail 9.7% North America – less group costs / a few other bits.

Shares have fallen from a high of 420 in mid 2015 to 260 now – a near 40% fall.  They have been particularly punished due to their December trading statement which stated:

“We believe that revenue has been adversely affected by the terrorist attacks in Paris discouraging people from travelling to major cities. We currently anticipate a recovery in those revenue growth rates.“

I guess its possible some people will travel less due to the attacks – but like the post September 11th dip in travel – it will be temporary.