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By Tom Winnifrith | Tuesday 15 July 2014
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
What happened to Kevin Ashton the Canaccord analyst who refused to publish a buy note on Quindell (QPP)? He was put on gardening leave. A new gopher is in place and he has resumed coverage with a buy stance (quelle surprise as Canaccord is joint broker) and 354p target. That is a 70% cut in target price. Earnings forecasts for 2014 and 2015. It would be fair to say the Mr Ashton would have regarded such a target price as wildly optimistic. Perhaps that is why Canaccord suspended him.
And new analyst Arun George serves up a caveat or two. Try this one from page 7 of 54:
There are clear risks for a company growing as rapidly as Quindell. We note short and longer term regulatory risks. Also, despite a history of cash collection for Quindell and its peers, past collection is no guide to future collection. There is the risk that Quindell either has or will overpay for acquisitions. There may be further repercussions from the adverse press than we anticipate. The company’s net cash position could dwindle significantly this year due to strong growth, though the Board is confident that is there is no need to raise further funds.
At the request of Canaccord, this link has been removed. We say request we mean that we received an intimidating lawyers letter. Heck if we published shite like this we'd want to keep it under wraps too.
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