Second-hand games market

Slashdot article "Anger with Game Content Lock Spurs Reaction From Studio Head Curt Shilling":

"Studios and publishers are fighting back hard against the used game market, with the upcoming title Kingdoms of Amular the latest to declare it will use a content lock. In this case, KoA ups the ante by locking out part of the game that's normally available in single-player mode. Gamers exploded, with many angry that game content that had shipped on the physical disc was locked away and missing, as well as being angry at the fact that content was withheld from used game players. One forum thread asking if the studio fought back against allowing EA to lock the content went on for 49 pages before Curt Shilling, the head of 38 Studios, took to the forums himself. His commentary on the situation is blunt and to the point. 'This is not 38 trying to take more of your money, or EA in this case, this is us rewarding people for helping us! If you disagree due to methodology, ok, but that is our intent... companies are still trying to figure out how to receive dollars spent on games they make, when they are bought. Is that wrong? if so please tell me how.'"

IDH take profits

I'm new to the whole world of technical analysis. IDH has filled its gap, so I'd be inclined to take profits (remember, this is a paper portfolio, though). It may have a lot further to run though. I don't know.

Notionally bought at 299.5p on 24-Jan-2012 and sold today for 356p. That's a profit of 18.9%. Too bad I can't manage to do this with any kind of consistency.

CRE- Creston

Let's see if I can replicate my success with IDH (Immunodiagnostic) (up 19% since I highlighted it!), with CRE.L (Creston).

CRE was first highlighted extensively in a post by ExpectingValue (many thanks!) in July 2011:

The group itself is a ~£66m market cap, diversified marketing and communications company ... marketing and general consultancy ... advertising, both digital through mobile, social media and general web platforms, offline, and in-store/promotional activity

Sounds like the kind of people for whom you'd slam the phone down mid-conversation.

CRE trades on a PER of 3.3, PFCF 4.5 based on full results. Clearly, all isn't happy in the world of annoying phone calls and jiggling-baloney spadvertising, or whatever it is they really do. Their IMS on 27-Jan-2012 contains the deadly words:

Despite this revenue growth, Headline PBIT is expected to be slightly below that of the prior year

The interims issued on 30-Nov-2011 showed negative net cash flow. It had net debt of £5.8m at the interim stage, and the latest final results showed a net profit of £2.3m, and net cash flows of £8.0m, so we're not at distressed levels.

Over the last 5 days, the share price has dropped 28% off the black of the recent IMS. It reached a hig of about 122p in 2011, and made it down to 46.5p within the last couple of days. Looking at the charts, it seems that from about June 2011 Mr Market was somewhat prescient about the trouble ahead.

The RSI indicates that the shares are heavily oversold (although with a drop of 28%, it would do!), has been in downtrend since July 2011, trades on a PER of 3.3, and I think we've just witnessed an exhaustion gap. So, if you're brave, and don't mind holding your nose, now might be the time to buy.

I just want to emphasise that I have no position in this company.

47.88p

SHG - Shanta Gold update

SHG.L (Shanta Gold).

Update on fundraising : SHG raises 25m USD since Dec 2011 without equity dilution on favourable terms. This funding will allow for operation through to production at the NLGM (New Luika gold Mine) in April 2012. The NLGM is on track for cold commissioning in Feb, hot commissioning in Mar, and production in Apr 2012 , with full production rates being achieved by end of 2012Q2.

Bauhinia Creek update: The creek orebody is the first of several satellite gold deposits  to be exploited at the NLGM in the Chunya district of Tanzania. It is anticipated that the new mining plan will show an increase in strike length and a final depth of 200m versus the current 100m, with an increase in both production ounces and grade. The revised plan is expected to be released at end Apr 2012.

IAE - Ithaca Energy looks interesting

Oil producer IAE.L (Ithaca Energy) is doing the rounds lately, garnering a well-received writeup on TMF's Pauly Pilot's Pub, and yesterday on Stockopedia as a share that might go up 20% in a month. OK, so I'm a bit late to the party.

On 23-Jan-2012 it announced that

it has received a confidential, non-binding
proposal to acquire all of the outstanding shares of the Company

IAE is looking overbought at the moment, having jumped from about 140p to 175p over the last week. A theory is that there should still be enough maneuvering room for a premium price even at these levels.

It has a market cap of£451m, and a nice cash position of £108m. It trades on a PER of 12.6. Analysts are forecasting an EPS of 41.65p, which would put it on a forward ratio of 4.2. Not bad, even if the bid doesn't work out.

174.1p

IDH - Director Purchases

Ah, don't you just love it when a plan comes together?

An RNS today announced that a concert of directors purchased 1.2m shares in IDH.L (Immunodiagnostic Systems Holdings) on 27-Jan-2012. That's about £3.8m worth. Directors holdings before the purchases was about £6.5m, which is a nice healthy amount.

Halifax T&Cs

In the wake of the collapse of MF Global, where investors lost money due to the fact that their investments were pledged as security, I thought it prudent to start digging through the T&Cs (Terms & Conditions) of my brokerage accounts to see if there are any nasties lurking in there.

Extracts from the Halifax Share Dealing Service Terms and Conditions 1/338070-1 (03/11) (NOTE: if you're using a CFD account, different T&Cs will apply, and may be materially different wrt hypothecation)

From section 7.2:

We will not lend or deposit by way of collateral any investments in your account to a third party without your express permission.

Section 7.7:

We will hold your funds so that we
comply with the FSA Rules. This means
that we will hold your money, along with
money belonging to other customers, in
a pooled client money account with an
approved bank

Section 7.8:

In the event of an approved bank being
declared in default we will make a claim
on your behalf, including, where
applicable, through the Financial Services
Compensation Scheme. Under the
Financial Services Compensation Scheme,
compensation of up to £85,000 of funds
held with the relevant approved bank is
available to eligible claimants. You should
note that the £85,000 limit applies to the
aggregate of all your claims against the
relevant approved bank, including any
claims you may have directly against the
relevant approved bank. As such, you may
lose all or part of your funds.

Section 7.9:

If you ask us to deal in overseas
investments for you, we may hold your
money in a bank account with an approved
bank outside the UK or pass your money
to an intermediate broker or agent,
settlement agent or Over The Counter
(OTC) counterparty outside the UK. In such
circumstances the legal and regulatory
regime applying to the approved bank,
intermediate broker, settlement agent or
OTC counterparty will be different from
that of the UK and, in the event of a failure
of the bank, intermediate broker,
settlement agent or OTC counterparty
your money may be treated in a different
manner from that which would apply if
your money was held by a bank
intermediate broker, settlement agent or
OTC counterparty in the UK. Where we
hold your money in a bank account with an
overseas approved bank, such bank may
be entitled to combine the account with
any other account or to exercise any right
of set-off or counterclaim against money
in that account in respect of any sum owed
on any account of ours.
We will not be liable for the solvency,
acts or omissions of any third party
referred to in this Term.

Section 11.12:

If we appoint a custodian to act as our
nominee in respect of investments that
are subject to the law or market practice
of a jurisdiction outside the UK:
• different settlement, legal and
regulatory requirements may apply
from those in the UK; and
• there may be different practices for
the separate identification of safe
custody investments.

Hmmm, who knows what could be lurking in that statement.

Section 11.13:

We are a participant in the Financial
Services Compensation Scheme (FSCS).
As you have been categorised as a retail
client, you may be able to make a claim
on this Scheme if we default in our
obligations to you. Compensation of up
to 100% of the first £50,000 of assets held
is available to eligible claimants. If you ask,
we will send you a summary of your rights
under the Financial Services
Compensation Scheme. Further
information can also be obtained from
the Financial Services Compensation
Scheme.

Section 11.14:

Your investments will be pooled with
investments held for other clients.
This means that your investments will
not be identified by separate certificates.
Our nominee companies are owned by
us. If our nominee defaults, we accept
full responsibility for it. We will not
disclaim losses arising directly from its
fraud, wilful default or negligence.
We are wholly owned by the Lloyds
Banking Group.

Hmmm, the problem is that in the event of default, we can't be sure that Halifax will be able to make good on this promise.

Section 11.17:

We are not responsible for any loss
incurred as a result of the actions or
omissions of any third party.

Comments? Am I being too paranoid? Not paranoid enough? If you perform an audit of your own brokerage account, then please feel free to link below.