Any Renishaw holders out there ....?

25th Jan '18 by gus 1065

3 comments 2218 reads

Little covered so far as I can tell looking at old posts, but wondering if there are any Renishaw (LON:RSW) holders out there? This specialist metrology company has been a strong High Flyer over the last year (up about 80%) but dropped 14.5% today off the back of what appeared to be a pretty good earnings update.

https://www.stockopedia.com/share-prices/renishaw-LON:RSW/news/renishaw-plc-half-year-report-urn:newsml:reuters.com:20180125:nRSY8570Ca/

I suspect it may simply be profit taking or perhaps the realisation that they have material US$ denominated earnings and perhaps a good chance to increase my holding, but wondering if anyone has any views on whether it is something more sinister.

(Wonder also whether the board re-shuffle may have unsettled things with longstanding CEO handing over to Sales Director to become Exec Chairman).

Gus.

Unlock with Email

Unlock with Google

Already have an account?
Login here

doug2500

25th Jan '18

Just looks like a good company with good trading but massively overpriced before, now just very overpriced.

On that sort of valuation any news would have to be 'shoot the lights out' just to sustain it.

All IMO of course, and I doubt I'd sell if I was a holder, but I wouldn't be a buyer even at today's price.

Damian Cannon

I've been watching Renishaw (LON:RSW) for a while and that worries me is the volatility in EBITDA (and thus in margin and ROCE). In a good year these metrics are great, as is the 5y average, but the lumpiness doesn't sit well with such a high P/E. Is this just the nature of the business?

gus 1065

Hi Damian.

I think lumpiness is the nature of this particular beast. Renishaw (LON:RSW) spend a fortune in Capex to maintain their competitive moat and as a specialist capital equipment supplier to various manufacturers their business tends to track the business cycle. Accordingly their revenues and earnings in particular are very much feast and famine.

You might find the attached article by Richard Beddard from last September of interest - it’s quite a good (and humorous) sketch of the company and highlights some its peculiarities.

http://www.iii.co.uk/articles/444296/should-you-hold-renishaw-through-thick-and-thin

I’ve held the stock for a while and file it under the “keep and forget about” category although I agree that its current P/E rating is punchy.

Gus.

Any Renishaw holders out there ....?

Unlock the rest of this article with a 14 day trial

About the Author

Gus 1065

3 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...