Paddypower C&C bet. No brainer?

BlackIguana

What will the C&C share price be at Summer Time end? C&C Share Price
Singles Only. Applies to the LSE share price close of C&C Group Plc on Friday 26th October 2007.
10 or Above 8 - 11 Below 10 evens

The above bet is taken from paddypower's website. It seems (to me) too good to be true.

The current share price is 8.45 after today's drop. Surely evens that it'll be below 10 in 3 months is a great bet.

Am I missing something? With dividend build-up etc etc? A younger me might have already stuck a ton on this but I'm wary. Is there something I don't know

Any thoughts?

westside

it still has a great product that maybe ripe for takeover, excuse the pun. They are doing alot of marketing as always and I feel that there will be some recovery . if we get a couple of weeks of fine weather then the sp will rise ...but what are the chances of that. I bought them a while back and although all my profit is gone, i still think there is some value to be had...but then again i should have sold when they hit 14 :-(

Tony255

based on the announcement about them yesterday then it doesnt seem too good for them unless the weather gets better, but with the latest advertising etc... this should definately be an interesting one. i think i might take a risk with this one

BlackIguana

yep, I think I'll put a few squids on it myself.

I agree that a takeover is a possibility. I'll be watching the shareprice pretty keenly on Monday. The closing price next Friday will be an interesting (bounce-back often happen incredibly quickly).

I'm not a full subscriber to the 'efficient market' theory but evens that a shareprice won't go up by 17% in 3 months is too much for me....

Gary ITR

Part of the drop could be due to the market being flooded by employee shares now being sold. Each employee was given 300 odd shares for every year they worked there but they went into a trust for 3 years but now they have matured (2-3 weeks ago), a lot of the employees just sold them as soon as the share certificate landed on their doorsteps

flogen

It strikes me that anyone looking for a 1-2 year investment would be a fool not to put it into C&C right now -I'd be willing to bet (if I had the money) that they'll be back over the 12-mark within 12 months.

Sonnenblumen

At € 8.00, C&C would look to be a steal and agree with Flogen, a practical cert to be back up at € 12.00 all going well. The weather will definitely be better next year, in sofaras it cannot possibly be worse. A lot will also depend how market trials in Spain and Germany go.

I'm impressed with the company's committment which is building capacity for future demand, I would be a buyer at € 8.00.

gucci

im going to buy my 1st ever shares this week. have about 400 euro to invest (come on gotta start somewhere!) and il enjoy sitting on these for a while, im not too bothered if it means waiting for 12 months or 2 years

GP

gucci wrote:

im going to buy my 1st ever shares this week. have about 400 euro to invest (come on gotta start somewhere!) and il enjoy sitting on these for a while, im not too bothered if it means waiting for 12 months or 2 years

Don't forget to factor in the tax paid once you sell them off. (23%)... IF the price goes back up to 12 & you investing 400, you're looking at making around €29 after tax and that's not counting in the fees.

daveirl

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eclectichoney

GP, would it not be more than that (ignoring fees as you said), say you invest €400 at €8.50 and it rises to €12 = €564. The capital gain would be €164 less 20% CGT = €131. However presumably no CGT would be payable in this case as it would be under the annual €1270 threshold? Obviously fees would have a big effet on any profit though in addition to this.

martin84

Could some one explain to mean what this means Link

Thanks

Reyman

martin84 wrote:

Could some one explain to mean what this means Link

Thanks

They've bought back some of their shares. It should raise the price - less shares same company value. That's the theory.
Standard practice nowadays when you can't find anything to invest your cash in. Strange one really though because I thought C&C was fairly heavily in debt - you'd think they might pay some of it off in case of wait for it

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"a rainy day"
I wouldn't be too enamoured by their dividend cover either - this is not a completely solid company - just my view

Time Magazine

Anyone else suspicious that Paddy Power might have got wind of this prior to the announcement?

martin84

Thanks Reyman. I put a few quid on this myself. Cant seem to find the bet on PP. I remeber checking it last week and the odds had changed to 4/6.

Sonnenblumen

Reyman wrote:

They've bought back some of their shares. It should raise the price - less shares same company value. That's the theory.
Standard practice nowadays when you can't find anything to invest your cash in. Strange one really though because I thought C&C was fairly heavily in debt - you'd think they might pay some of it off in case of wait for it

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"a rainy day"
I wouldn't be too enamoured by their dividend cover either - this is not a completely solid company - just my view

Easy to be nervous on C&C, certainly a one trick pony which doesn't like rain. That said, it's probably still a good gamble.

techguy

Is this bet still on for newcomers? I can't find it on the PP site..

BlackIguana

The market is no longer available.

I put on £100 at evens. I was wondering what made the price spike on Friday. Share buy-back. Typical.

Sounds like someone in PP's knows someone in C&C. I'll be raging if C&C management continue that stragegy until Oct and I lose the bet because of it...

Still Share Price is now 8.80. So a long way to go. We shall see.

martin84

It droped down a fair bit today Link

daveirl

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dotsman

Completely collapsed today! They've also readjusted their expected earnings again.

Looks like your bet is fairly safe (unless we get some pretty amazing weather for the next 2 months).

On a side note, now might be a good time to invest. Share price is half of what it was at the start of the summer (was around €12.50). It can't rain all the time, can it?

Colonel Sanders

was thinking something similar. If you have the balls there are always opportunities in a falling mkt as there often seems to be an over reaction on the way down.

Reyman

There's no opportunity if it's not a good company. It's been built on marketing hype - there's nothing else there!

Then again I think of Coca Cola - Watered down sugar and the number one brand in the world.
You have to make your own call on this one!

Sonnenblumen

Reyman wrote:

There's no opportunity if it's not a good company. It's been built on marketing hype - there's nothing else there!

You don't happen to have extra large feet and hands? Worse still you've never enjoyed a glass of cider!

daveirl

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Gary ITR

I sold 327 shares in C&C on Monday at ~7.60 a share, glad I did now. Can't see them going back up anytime soon

Afuera

Sonnenblumen wrote:

A lot will also depend how market trials in Spain and Germany go.

I would not expect anything too positive to come from those trials in Spain anyway... After seeing the Magners posters in one of my local bars a short while back I thought I might as well indulge in a "taste of home" but was shocked to find out that they were charging EUR 6 for a pint bottle (a bottle of beer normally costs about EUR 1.50). I have still to see it stocked in a single supermarket so at the moment buying it in a bar seems to be the only way to get your hands on it. Of the few people that I know that have tried Magners over here, they did not rate it that high, saying they prefer the taste of the cider from Asturias. Anecdotal, I know, but does not really bode well for it in these parts anyway.

Sonnenblumen

daveirl wrote:

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Would you also say the same about other single product companies like some homegrown ones eg CRH, Greencore, Tullow Oil etc etc. There are also some notable global giants that fit the ' one trick profile'. In general people are sure cautious/nervous about one product cos and yes many failures but some notable successes also. I'd believe C&C will come good, albeit with a few hickups on the way.

Spain is like most markets and I'd doubt that the 'cheap beer consumers' are the target group for imported Magners/Bulmers. BTW I was in several bars in Lanzarote for New Years and I was amazed how many Eng/Irish and others were drinking the cider.

daveirl

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daveirl

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Afuera

Sonnenblumen wrote:

Spain is like most markets and I'd doubt that the 'cheap beer consumers' are the target group for imported Magners/Bulmers.

Spain is not like most markets though. It already has a lengthy tradition of home grown cider making and is able to provide it cheaply to the local market.

Sonnenblumen wrote:

BTW I was in several bars in Lanzarote for New Years and I was amazed how many Eng/Irish and others were drinking the cider.

I thought they were only doing trials of Magners in Barcelona at the moment? Did not realize it was also available in the Canaries.

You make a good observation on the English and Irish tourist market that could be potential consumers. Though, I am not sure if they could survive with this group as their only revenue stream abroad.

I don't want to turn this into a bashing of the company... just thought that some of you might be interested to hear how the trials have been received so far in Spain. Take what you want from my anecdotal observations.

BendiBus

At the current price they might be of interest to a larger more diversified drinks company that would like to add an established cider brand to their stable.

daveirl

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flogen

While daveirl has some fair points to make I still think they're worth a punt at the current price - a good summer next year will see their value rise significantly, even if it isn't back to the good auld days (IMO).

The fact that they're a potential takeover target helps too - I don't see the shares dropping any more than they did, certainly not for any length of time.

While they may have been overvalued, I think the movement after their profit readjustment was an over-reaction too.

BlackIguana

Well I'm very happy to have turned my £100 into £200 with pp..... (Fingers crossed, and barring a takeover!)

I actually don't know much about the fundamentals of the company but it's certaintly had an interesting few weeks. I don't think that the current price (EUR6.50) is necessarily an overshoot...

For the following reasons...

1) They have opened up the market for cider in the UK. Most definitely. But 'Bulmers UK' (not owned by C&C) are selling very well. There's a lot of nationalism in the UK and a lot of young brits would rather drink 'old english cider' than 'the irish stuff'. It doesn't taste very different and Bulmers probably have distribution advantages...

2) Mangagement have not covered themselves in glory over the past few weeks. The share buy-back programme (now cancelled but not before they spent 120m on shares when the price was between 8 - 12) has been disasterous. Awful timing considering they should have known that some sales difficulties were coming downstream....

3) When it was floated (only 2/3 years ago) the price was around 2.50 euros I think. So it has still come a long way...

Most likely outcome is a takeover. Hopefully not before October though.

Cheers.

Gary ITR

BlackIguana wrote:

When it was floated (only 2/3 years ago) the price was around 2.50 euros I think. So it has still come a long way...

€2.27, I got 654 of them for nothing so I'm still up once they stay above 1cent

Sonnenblumen

One of C & C's main UK competitors Scot & New ie Bulmers have reported record cider sales this summer!! Makes one wonder if there's more than weather affecting C&C's Magner sales in UK etc?

Sonnenblumen

daveirl wrote:

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Bull****, CRH have been dragged through courts in several countries for breaching rules + regs, corporate governance etc. They are like all building companies susceptible to market changes, cyclical or otherwise.

They are a big player and acutely aware of the political spheres.

Terrontress

Sonnenblumen wrote:

One of C & C's main UK competitors Scot & New ie Bulmers have reported record cider sales this summer!! Makes one wonder if there's more than weather affecting C&C's Magner sales in UK etc?

Of course! They created a market for a product and then let everyone else come in and take advantage of that.

5 years ago the only cider being drunk in English pubs was on draught. Now there is bottled cider everywhere. Magners, Bulmers, Strongbow Cirrus, Kopparberg, St. Helier.

I think C&C tried to get too big, too quickly. They thought that as long as they were encouraging people to drink bottled cider in the good weather that they woudl triumph.

daveirl

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Moggaman

daveirl wrote: »

Of course they are susceptible to market changes my point was that by virtue of operating in far more countries they were more robust than C&C.

Any updates on yer forecasts there lad?