Details provided by an administrator show the now defunct UK seafood supplier had 40% of its turnover tied up with a contract from Samworth, which was canceled in early April Trading platforms like Robinhood are rising in popularity with retail investors as a side effect of Covid-19’s disruptions to sports and other activities, says Dan Egan, managing director of behavioral finance and investing at Betterment. Salesforce.com (CRM) stock is up after announcing a strategic partnership with German-based Siemens
The loss of a substantial contract with UK food group Samworth Brothers was behind the financial failure of shrimp and whitefish supplier Pick Fisk, a report from the administrator DFW Associates shows.
According to the report, the Samworth issued a notice in early 2020 that they would be terminating their contract in early April. The group had been one of Pick Fisk’s largest customers, accounting for approximately 40% of the company’s turnover.
Samworth declined to comment on the decision when contacted by Undercurrent News, citing company policy.
Pick Fisk would ultimately file for administration on March 31, a decision which Undercurrent first reported later in April.
Previously, during February and March, the impact of the COVID-19 pandemic had left a marked impact on Pick Fisk’s market, as foodservice customers reduced or stopped orders under the government-imposed lockdown.
“As a consequence, turnover fell rapidly to an unsustainable level with the company unable to meet creditor payments and pushing it into a loss-making position,” DFW Associates administrator, David Wilson, writes.
At this stage, the directors of Pick Fisk — who did not respond to comment when contacted by Undercurrent — reportedly sought advice from Wilson’s administration firm.
“The view was that although it was unlikely that the business could be sold, enhanced realizations would be obtained for the stock by a relatively brief period of trading which was best done under the protection of an administration order,” Wilson continues.
At this stage, Pick Fisk’s Dutch 50% co-owners Primstar — themselves owned 50% by the Dutch seafood giant Cornelis Vrolijk — were contacted by DFW Associates.
“A possible rescue of the business was considered in conjunction with the shareholders, Primstar, which ultimately did not progress,” Wilson adds in the report.
According to Richard Oerlemans, CEO of Primstar, the company was given exceedingly short notice in which to decide whether to come to the financial aid of Pick Fisk, at a time when COVID-19 had made travel impossible.
“We were initially not informed about it; when we finally discussed it [with DFW Associates], that they’d filed for administration, we had to decide within 24 hours whether to proceed with that or not,” Oerlemans told Undercurrent. “The administrator came with a very high amount of cash as the only way of avoiding administration. So this thing was confirmed at such a late stage we were more or less with our backs against the wall.”
Primstar does not intend to bid on any of Pick Fisk’s equipment or processing machinery, Oerlemans added, noting that his firm has no plans at this stage to go directly into business in the UK.
The administrator’s document also revealed Primstar has expressed concern that Pick Fisk’s stock has been continuously overvalued in the accounts, thereby falsely inflating the value of the company’s assets.
“It would also appear from company records that the accountants have previously expressed concerns over the stock valuations when they have been preparing the annual accounts,” Wilson added. He said that an investigation into Pick Fisk’s stock position will be held by DFW Associates in its overall review of the company’s activities.
“This could have a significant impact on previous accounts and in particular dividends that have been paid against those period profits,” continues the report.
Primstar reportedly asked for access to Pick Fisk’s company records for the purpose of investigating the case further, but were denied as UK data protection legislation denies access to third parties in such situations.
“At the moment, we are not sure what to believe, we have not seen the audited accounts, because from the Dutch side, we were not actively involved in the day-to-day management,” Oerlemans told Undercurrent. “Of course, we got accounts which stated a certain stock value, and having contacted the administration and having seen what physical stock was still available, the administrator is going to do some additional investigation on the stocks.”
“Everything I know is from the administrator,” Oerlemans added. “From the figures I get from him, it appears the deficit will be quite substantial.”
Wilson the administrator did not respond to a request for comment when contacted by Undercurrent.
As reported by Undercurrent on June 15, at the time when Pick Fisk went into administration it was left owing £2.80m to 68 different companies.
After adding amounts outstanding to employees and others, the total the company owes is closer to £2.93m, and DFW Associates estimates that there will be a deficit of £2.28m when the company’s stocks and assets are divested.
The largest creditor is Welmar Seafood, another subsidiary of Cornelis Vrolijk dealing in fish supply. Welmar is owed £632,518, according to an earlier document.
Next is Primstar itself, which is owed £609,268. Gambastar, a Spanish shrimp processor which is a sister company of Primstar, is the fifth largest creditor, owed £292,034. Seafood Parlevliet, a Dutch value-added seafood processor acquired by Cornelis Vrolijk in 2016, is also a small creditor, owed £5,628.
The third-largest creditor behind Welmar and Primstar is West Coast Salmon Products, a supplier of salmon by-products, which is owed £413,375.
Then, Grimsby-based primary whitefish processor Kirwin Brothers is owed £311,664. Kirwin was also owed £327,820 by another UK supplier, Inshore Fisheries, when it was recently liquidated.
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Author: By Dan Gibson
June 23, 2020 10:26 BST
Retail investors are playing the stock market for ‘entertainment,’ says behavioral finance pro
“Entertainment investing” is having its heyday.
That’s according to Dan Egan, managing director of behavioral finance and investing at Betterment, who used the term on CNBC’s “ETF Edge” on Monday while explaining retail investors’ recent rush to the stock market and trading platforms like his.
“In March and April, we were definitely seeing people getting a little bit more conservative, especially around having cash positions or emergency funds and wanting those to be available on shorter notice,” Egan said.
A survey of 5,005 U.S. investors conducted by Betterment found that 78% did not take money out of the markets from March to mid-April. Of the 20% who did, nearly half said they would only reinvest when the market was either fully corrected or had begun to correct.
As lockdowns continue into the summer, “people are either voluntarily or involuntarily saving a lot of that money, and they need something to do with it,” Egan said. “We’re starting to see what I would call ‘entertainment investing.'”
With professional sports, film and television productions, indoor activities and other entertainment options largely on hold due to the pandemic, people have been looking for a sense of community, he said.
“The stock market is in the news. People talk about it. It’s more accessible than it’s ever been,” Egan said. “We are definitely seeing people treating it a little bit like a form of entertainment, where they want to come in and be able to talk about what they have and haven’t invested in and how it’s been doing.”
“From a budget point of view, but also from a ‘What else are you going to do with your time?’ point of view, it’s been a good time to be somebody who helps clients manage their money,” he said.
John Davi, founder and chief investment officer of Astoria Portfolio Advisors, warned that the retail investor comeback could just be a fad.
“A lot of retail investors that come into the market not really for a long-term strategic allocation tend to buy very low-priced stocks, penny stocks. It is concerning,” Davi said in the same “ETF Edge” interview.
“I think in investing you should have a very long time horizon, … so I am worried about it,” he said. “I do think that as the economy opens up, sports open up, a lot of these investors that would typically trade for a quick day trade … will go and find other ways to kind of utilize their efforts and their time and their money.”
Author: Lizzy Gurdus
Strategic Partnership Pushes CRM Back Towards Record Highs – Schaeffer’s Investment Research
The shares of Salesforce.com, Inc. (NYSE:CRM) are up 1% to trade at $193.50, inching even closer to their Feb. 20 all-time high of $195.72. This comes after the company announced a strategic partnership with German firm Siemens to develop a new workplace technology suite allowing businesses to safely return to work following months of lockdown measures. The software will ensure a connected physical workplace while aiding in social distancing.
CRM’s return to near-record highs has been nothing short of impressive. The stock has tacked on 67.8% since its mid-March plummet to annual lows, with an early June pullback deftly caught by its 40-day moving average. Year-to-date, Salesforce stock boasts a roughly 18% lead.
Analyst sentiment is overwhelmingly optimistic. Of the 27 in coverage, all but one call the tech stock a “buy” or better. Plus, the 12-month consensus price target of $199.05 has yet to be touched by the security, and represents a 3.9% premium to last night’s close.
Options players have followed suit. This is per CRM’s 10-day put/call volume ratio of 3.46 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 94% of readings from the past year. This means long-term options traders have rarely been more bullish.
Author: by Lillian Currens