Daily Stock Market Report (Mon 27 Jan 2025) - SMWH, GOOD, VLX, COST, SRAD, DOCS

27th Jan by Graham Neary

59 comments 6322 reads

Good morning!

It's another positive set of announcements with lots of updates but possibly no profit warnings, with everything either in line or ahead of expectations. This happened several times last week, too. [EDIT: we also have another takeover offer!]

Could it be that economic worries, for the time being at least, have been fully priced into consensus forecasts for most companies?

I doubt this will last come April and the planned tax increases, but let's enjoy it while it lasts!

With the markets we cover arguably offering both a) historically cheap valuations, and b) forecasts that almost all companies are now able to meet or beat, surely the outlook for overall performance can't be bad!

11.30am: wrapping it up there for now, thank you.

Spreadsheet accompanying this report (updated to 17/1/2025)

Companies Reporting

Name (Mkt Cap)	RNS	Summary	Our view (Author)
Johnson Matthey (LON:JMAT) (£2.3bn)	Strategy update	Maintaining focus on PGM, scaling back hydrogen tech, committee to consider capital allocation.
WH Smith (LON:SMWH) (£1.5bn)	Response to press speculation	Confirms w/end press reports that the company is exploring options to sell its High Street business.	AMBER/GREEN (Graham) A positive announcement as this is primarily a travel business now.
Dr Martens (LON:DOCS) (£704m)	Q3 TU	Q3 trading was as expected and FY25 outlook is unchanged. Q3 revenue +3% at constant FX.	AMBER/RED (Graham) Upgrading this as a recovery now seems more achievable although debt and inventories may remain challenging.
Volex (LON:VLX) (£521m)	TU	9M revenue up 21.8% to $789m, inc 9.6% org growth. FY profit exps remain in line with forecasts.	GREEN (Roland) Progress continues at this cabling specialist, with a good mix of organic and acquisitive growth.
Pensionbee (LON:PBEE) (£373m)	AUM update	AUA has reached “over £6 billion” representing >265k customers.
Costain (LON:COST) (£231m)	TU	FY24 in line (adj. op profit £41.9 - 43.4m, net cash £160m. “Forward work” rises by £1.5bn to £5.4bn.	GREEN (Graham) Very impressive growth in the forward work position. If they execute this at expected margins then shareholders should do well.
Stelrad (LON:SRAD) (£180m)	TU	2024 revenue -6% to £290m, but adj op profit marginally ahead of exps at c.£31.5m.	AMBER/GREEN (Roland) I think this radiator business is well positioned for a cyclical recovery, but I’d like to see less debt.
Genel Energy (LON:GENL) (£175m)	Trading & Operations update	FY24 free cash flow of…

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dscollard

27th Jan

Llama from Meta is also Open source: OpenAI (clue is in the name) was supposed to be but that changed mid- flight/funding rounds. Deepseek is very different from an architecture and orchestration PoV - it is very clever and efficient (and powerful, - I had a few goes over the weekend but it seems busy today ;0)

. It's more the nature of disruptive innovation, incumbents get disrupted . this challenges the assumption that huge compute hyperscaler DCs are a must for AI - they may not be .

it's very bullish the broader adoption of AI and its embedding more widely but for example, Nvidia's enormous margins are likely to be pressured: this looks more like a moat shrinking /evaporating from the power of the very thing it was predicated on.... but time will tell .

Meanwhile the market has some discounting to do.. EMH anyone ?

Though I wouldn't rule out the potential for state actors.... not like we haven't seen that already without too much, em Star gazing ;-)

Charles Mitchell

Deepseeks view of Google Gemini as a competitor "In conclusion, DeepSeek could be better than Gemini AI in specific scenarios, such as niche applications, cost-effectiveness, or customization. However, Gemini AI remains a formidable competitor due to its state-of-the-art capabilities and integration with Google's ecosystem. The choice between the two would depend on the specific needs and priorities of the user or organization.

ken mitchell

Surely if that’s genuine eParo, Smiths News (LON:SNWS) had to announce it via an RNS. Telling investors to look out for “exciting new collaboration with a HUGE household brand” is against the rules. Also the share price is unchanged which also questions the validity of that LinkedIn post.

MattH

My main issue with Stelrad (LON:SRAD) is there is little to no moat. The technical aspects of a radiator are pretty simple, and one radiator manufacturer is much like the next. Not much pricing power there from what I can see.

RabidDog

I find it hard to believe that supposed ‘disruptive’ software changes have impacted processing and consumption by the magnitudes implied. I can pretty much guarantee that there will be significant compromises and we aren’t comparing apples with apples. Worst case scenario is that work throughput is looked to increase which still requires the targeted compute and power as previously forecast. That said, those AI stocks were looking frothy so any excuse to give them a haircut.

nicholasgill

I asked Chat GPT this question and it answered it perfectly, first time ..?

john2

One of the articles that I read about this suggested that DeepSeek’s future might be as a targeted AI system working from a specific large language model built to answer legal or medical questions rather than as a single massive model designed to function across the whole of human knowledge. It seems very credible to me that this could be done with less hardware. Moreover, rather than breaking words down into syllables it has been built to function with entire words.

Harry Hindsight

DeepSeek Day

Huge important and thanks for flagging here.

All my nuclear trades have been whacked (Centrus Energy (ASQ:LEU) Oklo (NYQ:OKLO) Nano One Materials (TSE:NANO) Lightbridge (NAQ:LTBR) and one on my watchlist Micron Technology (NSQ:MU) Broadcom (NSQ:AVGO) (-18% good lord) ASML Holding NV (NSQ:ASML.

What changed? - some "out of the blue" Chinese knockoff - is the North American AI foundations so built on silicon. I've avoided the MAGS for the 'picks and shovels' were looking at data centre fit-out suppliers but now not so sure.

Over-reactions can give good buying opportunities - good companies on sale - but Mr Market is certainly playing a game.

NVIDIA (NSQ:NVDA) apparently has lost $560bn the largest in Stockmarket history. Meta Platforms (NSQ:META) oddly unaffected.

rmillaree

the problem was 3 months ago it couldnt answer the question without really having full on 6 pints in argument with it till it got bored and agreed for the quiet life - that was despite the fact it was a meme at the time. as it was so well known obviosuly it would be fixed sooner rather than later - the issue is that probably took manual intervention to get fixed - not a great sign that its ultimately "reliable" at anything despite the fact it can do unbelievable amazing complicated stuff - its super clever with zero attention to detail which should be a bit scary

Why? because we will all be drinking more :) but agree after today the bubble hasn't burst but dissipated somewhat.

LeicesterPete

It's a great idea to follow a company you invest in on LinkedIn. You do get to hear about new business or hints new business is possibly being worked on. Last year I recall one company I invested in posting on LinkedIn about a large team trip out to the Middle East, two weeks later a new contract was announced in that region.

Paul Walton

Pretty much all etfs I follow have been hit massively, couldn't understand it, even so called World or Global, energy too IESU for example. Not supposed to happen.

Rusty2

28th Jan

Why is gold down, thought it would go up. Lots of non AI stocks really down as well.

Logical David

Ask DeepSeek about Tianamen Square in China or Taiwan. DeepSeek won't be able to give you an answer because the Chinese have wiped Tianamen Square & Taiwan from its memory/search. DeepSeek just ìnforms you that it is a friendly AI product and the subjects are beyond its current scope.

David.

That's if you can ask it anything at all, seems to down most of the time.

So many AI answers are incorrect. AI software is very hit and miss.

intuitive6191

From the Telegraph today

"A Reddit user managed to persuade DeepSeek to give answers about the Tiananmen Square protests in 1989."

According to the Telegraph, the user substituted numbers in place of some letters and eventually found a description of how the Unknown Rebel became a symbol of resistance.

ezlifeme

My current view of AI is like a trip to your GP. If you can describe your symptoms clearly, they are good at listening and can hone in and ask good follow ups. You may get the right diagnosis!

The answers are wrong. I don't know why AI is used anyway for basic questions. AI probably gets it's answers from the internet, many are incorrect as out of date or just plain wrong.

Just go on a travel forum, see the confusion because people look at answers on goggle or social media.

I was looking the frequency of car ferries from one port to another port, l know there are car ferries, AI butts in and states no car ferries from that port, totally wrong.

peterg

29th Jan

However, deepseek is open source. I'm no expert here, but there is a report, I can't now find, that says that the censorship regarding eg Tianamen is down to the platform it's running on, not the system. I've also had to leave ExTwitter recently as thanks to the actions of it's billionaire owner it's become an ususable cess pit. Problems online come from many sources

Daily Stock Market Report (Mon 27 Jan 2025) - SMWH, GOOD, VLX, COST, SRAD, DOCS

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Graham Neary

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