Shorting Unite Group

[wjw22]

https://www.bloomberg.com/opinion/articles/2019-01-14/england-s-universities-are-running-short-of-cash

I've opened a short spread bet on Unite, the provider of students' accommodation.  I think a few of the post-1992 universities are going to go bust and won't be rescued by the government.

[Nelsy-Boy]

@wjw22 That's a brave move based on the news. How does the recent price action look? I'm a newbie to this but I did read that a lot of people shorted Tesla and Ocado and didn't do so well. It's a tricky game to play so I hope it's a winner for you.

[wjw22]

Well I might be too early (which, as per The Big Short, is the same as being wrong) but Unite's Quarterly Valuation Update includes this statement:

Quote

The positive valuation performance is supported by a strong start to the 2019/20 sales cycle which is now well underway. 67% of rooms are now sold for the next academic year with 57% being guaranteed by nominations agreements (66% and 56% at the same time last year).

If those universities providing those nominations agreements start to go bust then that should have a material impact on those valuations.

[Caseynotes]

It's an interesting chart, lots of big tails, lots of gaps but certainly on a bullish run though just coming up to resistance before the all time high so would be expecting the bullish run to start to falter around here and start to think about what to do next, shoot for the high or turn down to regroup. Has already had 2 weeks on this straight run up so some flagging at least should be expected. Nelsy is right, it's tricky calling a turn on news without waiting for chart confirmation it often turns into a coin toss. You are right that too early is the same as wrong though surprisingly doesn't seem to bother many as they've been calling the big short since the start of 2016, so best to ignore in my opinion.

Listen to the news and be ready to act as the chart starts to react (if it does). Calling tops and bottoms is hard work but many do make a living out of it. They use strong support and resistance chart levels, their success rate is small but the risk is minimal, stop loss just beyond the entry S/R level, but the rewards can be very big if they catch a new impulse leg in the opposite direction.

[trade247]

great idea.

added to the watchlist and will be monitoring this one looking forwards.

thanks both - will 'follow' this thread as well.

[wjw22]

Unite Group are doubling down.

Acquisition of Liberty Living Group Plc

I still think I'm right, but I'm almost 20% under water!

 

[TheGuru12]

Good idea! It's like buying coffee stocks in the winter 😉 

[TheGuru12]

Interesting article out today.

https://www.zerohedge.com/news/2019-07-04/blain-when-crunch-comes-markets-will-freeze-and-every-corporate-bond-planet-will-be

 

Quote

 While the FT reports one successful student accommodation provider buying another from a major Canadian investor, it also carries the sad tale of another that funded itself from retail promising a 10% return on properties – the receivers are now chasing the individual investors for ground rents and service charges on empty student rooms. Don’t get me started about “mini-bonds” and London Capital and Finance – they give the bond market a bad name.

Which one do you think it is 😉 

[wjw22]

2 hours ago, TheGuru12 said:

Interesting article out today.

https://www.zerohedge.com/news/2019-07-04/blain-when-crunch-comes-markets-will-freeze-and-every-corporate-bond-planet-will-be

 

Which one do you think it is 😉 

You mean this one?

FT Alphaville: How a £100m student accommodation scheme went wrong (registration but not subscription required)

Quote

Buyers from the UK, Asia and the Middle East were offered “effortless” annual returns of 8-12 per cent if they bought student rooms in Stoke, Loughborough, Bradford, Preston, Leicester and Huddersfield. Currently, they are receiving nothing at all.