Craneware:

24th Nov '16 by DJLJ23

16 comments 8123 reads

Anybody got a view on whats happening at Craneware (LON:CRW). Its dropped a lot in the last month, trading volumes are generally fairly low and i can't find any specific negative reports.

Its AGM report, sounded quite positive to me
http://www.stockopedia.com/share-prices/craneware-LON:CRW/news/rns/161108crw5525o.htm/?title=agm-statement

Yes its expensive, but is there something else?

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About the Author

DJLJ23

Premium Member

Southerner living in the North, trained as metallurgist, background in IT, business cases and project management.

16 comments

Brothersinarms

24th Nov '16

Trump's threat to repeal Obamacare may cause uncertainty for their client base - US hospitals. I sold most of mine as soon as he got elected. Having said that, they have very conservative revenue accounting which means that the next 2 years revenues are pretty much in the bag from contracts already won.

I'm hoping for an overreaction so I can buy back.

dustyie

24th Nov '16

currency moves are also affecting this share price .

gus 1065

24th Nov '16

In the absence of company specific news, it looks like a de-rating of a previously well bid stock. Very high Q score and (still) a very low V so probably even more of a downward adjustment to come. Interesting to note Paul Scott was saying it looked expensive at 790p in Jan 2016. - perhaps that level or below is a re- entry point to target.

Gus.

Trigger14

24th Nov '16

I hold Craneware (LON:CRW) - as you say the falls are on low volumes and I expect are the result of the uncertainty from Trump election as brothersinams has said. Personally I don't see this as a very big risk to craneware's business so seems like a good opportunity to top up. Long term this seems like a very high quality business with great long term growth prospects (now at a relatively cheap valuation too imho).

Also the price had risen a long way above long term trend following Brexit (currency benefit) resulting in quite a high valuation so the fallback doesn't seem so extreme in that context. There should be more demand once the price settles I think.

DJLJ23

24th Nov '16

Many thanks for all your comments, Trigger 14, as it reports in $ and i believe develops in UK, cost in £, not sure there is a currency benefit.
i have just found this link, which talks about value based services, which Craneware (LON:CRW) was investing in, so i guess the question is will Trump do away completely with value based charging, if so how much has Craneware (LON:CRW) invested in value based charging?
https://www.healthcatalyst.com/hospital-transitioning-fee-for-service-value-based-reimbursements

Rusty2

24th Nov '16

But revenue is in US$s then surely a benefit?

Trigger14

24th Nov '16

There was a very substantial currency benefit from Brexit as the dollar has risen against pound that hasn't yet flowed through to the results. I think that probably explained the big price rise post Brexit.

Yes agree question is about what Trump might do to value based charging - I am sceptical that he would fundamentally change this though I am not clear on detail of how this links to Obamacare etc. So will look into further - thanks for the link.

Carey Blunt

24th Nov '16

I sold out today. I really like this share and plan to get back in but it met my stop loss conditions and so I got out and will look for another entry point (around 850 maybe?).
I think its a quality company and that Trumps policies aren't likely to effect it but you can't fight against the market sometime.
The key will be to buy in before it suddenly re-rates up again. I need to look up when the next announcement is expected.

DJLJ23

24th Nov '16

I don't know how they price, My assumption is that as they report in $, they probably sell in $, after all US hospitals are not going to want to take the exchange rate risk.
If so no currency benefit to revenue line, but could take a hit on costs, as these need to be converted to $.

Trigger14

24th Nov '16

Other way round - the implication is costs are now less in dollars and profits are worth more in £s

Rusty2

24th Nov '16

I don't agree if your costs are in £ and convert them to $s they will be lower after the devaluation? £ is now only $1.25 not $1.40 or whatever it was. Also revenue in $ will be more in £, either way its a benefit.

Trigger14

24th Nov '16

Snap

DJLJ23

24th Nov '16

accept what your saying about costs, what we don't know is how its sales are structured, i.e. who takes the currency risk, if its the hospitals (unlikely) the revenue will go down to as well.

Food for thought on a number of areas

thanks for all your input.

LE4R

26th Nov '16

Isn't this a good situation of 'run your winners'? I've found that, in the absence of any sector wide or company specific news, I've been better off holding on and waiting for the correction, than trying to call the top and then get back in again later at a lower price. This share has performed beautifully over my hold period and, while this pull back is a little more severe than prior intra-news periods, I'm more than happy to give it the benefit of the doubt. Especially so, as Trigger14 says, because I think the fundamental backdrop for its prospects is great and it's a quality stock

Brothersinarms

27th Nov '16

Well I've just bought back most of what I sold 20% cheaper so it's worked for me this time. I think it depends whether there's an actual trigger or if it's more just some investors taking a profit. I don't do it a lot but in this case a significant pullback (rightly or wrongly) seemed likely once Trump was elected.

Trigger14

9th Dec '16

Seems to have bounced right back now :)

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DJLJ23

16 comments

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