iSoft - time to buy?

[DuaneJackson]

iSoft shares are now at 40p (down from a year high of 465p. This is due to accounting irregularites, directors being put on 'special leave' and a pending FSA probe.

I'd have thought the share price will recover after the investigation.

Would I be a fool to invest in this company now?

 

[10Yetis]

I have been watching the iSoft situation as the new CEO moved from a really well known company from round these parts.

I suspect their price will continue to drop until they either get bought or are merged with another company. Personally, I suspect their reputational damage is to much. Failed NHS projects, dodgy acounting and now directors suspended... cannot see them surviving in their current form.

 

[cjd]

Big risk - this isn't a big company like M&S that you would expect to recover; sadly the most likely event is they will be bought at a very low price.

 

[FunkyBears]

http://news.bbc.co.uk/1/hi/business/5280756.stm
Agreed a big risk, they could be more damaging news to come, with a posible DTI inquiry. Imagine if you paid £4.65 a share you would be well P***** off now! I'd wait rather than risk getting burnt I can't see any upturn in the foreseeable future.

 

[Cornish Steve]

Forget the scandals published in the news. What are the business fundamentals? Is the business growing? How profitable is its business? How much debt does it carry? What are the ROI, ROE, etc.? Investing based on news articles and on hunches is speculating and very risky.

Sometimes, news headlines can lead to interesting investment opportunities. For example, the day after 9/11, while the price of most stocks were plummeting, the prices of companies that make explosive detection systems were soaring. Think through each headline and think which types of company are likely to benefit.

High fuel prices=>alternative energy
Mad cow disease=>fast food chicken
Pesticide scare=>organic foods

Still, the alternative energy, fast food chicken, and organic food companies must be the best in their respective sectors, with a proven track record and sound business fundamentals.

 

[jklondon]

a good suggested strategy would be to go in with a tight stop-loss if you can go guarenteed on this since if some futher bad news comes out you will get caught out by slippage.

Of course its a high risk punt - but risk and reward go hand in hand ...

 

[DuaneJackson]

I think I'll just watch and either kick myself or be glad I stayed clear : )

 

[jklondon]

I think I'll just watch and either kick myself or be glad I stayed clear : )

im sure someone on here will remind you if you need to kick yourself later..

 

[Emma@Zest4biz]

Telling question is : are they bigger than the NHS contracts? Look at some of the before and after figures and punt on what you can afford to lose

 

[jklondon]

up 30% today - was up 60% at one point this morning.

 

[DuaneJackson]

*kicks*

Long term it might prove to be a dud, but that's a very nice short term return!

 

[cjd]

They posted new accounts showing a loss of about £300m this morning; the critical issue appears to be that the banks have agreed to refinance - had you known that yesterday it would have been a good punt ;-)

Long term is another matter - they still have to deliver the biggest software project in Europe on time.

 

[jklondon]

now they have sorted out their accounts (as the market was clearly waiting for) perhaps we might see a takeover...