[On :freetrade:] Network International (NETW)

Last night I was going over some ‘Short’ Data whilst I did some research on a company and I found quite a large position held by various hedge funds in Network International plc.

I’ve as yet been able to find any truly damning news or updates to support this large position. Does anybody know anything about this?

Im invested in them too.

The directors came out and said there is no reason that they are aware of for a quick drop in price so it could be the short interest driving it down.

Im interested to see what other peoples thoughts are on this

There has been some pretty desperate economic data out of the Middle East & Africa region which is making me think this is related. However, the drop seems excessive to me. I started buying shares this morning.

Can you attach a link (if you have one) for so I can have a read?

There are a few but I found this the most useful - https://www.pwc.com/m1/en/publications/middle-east-economy-watch.html

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Short tracker provides a nice accessible view on short positions

Thanks but I make use of my own data and I’m building my own service similar to this. I find shorttracker to lack a lot of context, eg it doesnt show relative to things like; price, shares outstanding & earnings etc

Thank you for this buddy :+1:

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Saw a note today that said Harding Loevner LP have acquired over 5% of the business in the last few months.

Hopefully this is a positive note as they have a history of acquiring successful businesses in ‘Frontier Markets’

they have a history of acquiring successful businesses in ‘Frontier Markets’

I recall there being a saying about this sort of thinking.

With that many hedge funds in it there must be some information we arent aware of.l

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Yep, I’d be very wary of investing when you’ve got that many funds short (and adding to their shorts very recently).

A lot is happening around this company.

Profits crashed by 90% in the 6 months ended in June. They expect sales will drop as much as fifth in 2020.

The are buying an ecommerce platform in Africa.

The directors are buying shares like it’s on sale.

Buys
Company Director/PDMR Date No. of shares Price (p.) Aggregate value (£) Comments
Network International Simon Haslam (ceo) 21 Sep 20 50,926 216 110,000
Network International Rohinton Kalifa (ch) 18 Sep 20 35,000 291 101,704
Network International Victoria Hull 21 Sep 20 66,319 224 148,517 Average price

Where did you get that profit figure from

To be honest if directors are buying and have no idea why the share price has fallen so much yet all hedgefunds are shorting theres something that one side is missing and it sounds fishy.

Attached are the interims. I’m not sure where that 90% figure came from either but the drop in EPS & Operating was c 100%
network-international-2020-interim-results-18aug2020-rns.pdf (831.4 KB)

Financially I’m encouraged that FCF only dropped by 50% and the more recent news seems to be paint a more positive picture than. Leverage is the elephant in the room I think & perhaps what hedge funds are honing in on. I will ty to do some research on their debt to see how that is trading on the markets.