Diary: TLPR

TLPR - Tullett Prebon - Financial Services

Oh, how fickle the markets are. On 18-Oct-2011, Kelpie Capital wrote a piece on TLPR at a price of 365p. He notes: second largest inter-dealer broker, attractively valued, positive catalysts, headwinds, oligopolistic, Asian potential, cash generative, little in the way of capex, director Terry Smith buyer of shares

Terry Smith is well-known to many UK investors, and there is likely to be some buzz around the company given his reputation.

Recently, things have become spicy. On 08-Dec-2011, the operating chief resigns. Speculation is that he had a run-in with Terry.

What prompted me to write about this share is seeing a Twit from spbaines today that Citigroup downgrades TLPR from buy to neutral. I see that in early trading TLPR is down 1.1% to 266.5p - presumably the consequence of the downgrade.

Looking at Sharelock, I see that based on yesterday's close it is on a YLD of 6.2% PER of 5.9. These are decade high/lows. Median decade PBV is 2.57, current is 1.28. It has £48m net cash. Dividend is covered 2.74X, and what a whopper of a yield it is, too. I'm not aware of anything that would suggest the dividend is under threat.

Net profit margins have averaged 11.8% over the decade - which is where we stand now.

Given that the shares are on valuation levels not seen for at least a decade, I can't help thinking that Citigroup is wrong.

Should be interesting to see how this one plays out.