I Read The News Today Oh Boy! 14-May-2019

Tuesday, May 14 2019 by
18

Morning all!

First of all, please note, there is a Parity PEG Price Report Mello May 2019 Special covering over 20 companies presenting at Mello this week available here (free sign up required to access).

Unlikely to be any updates from me until next Tuesday as I will be at Mello and then in London until then.

Hope to see many of you there.

1Spatial ( 1Spatial (LON:SPA) ) – 36p – £36m – PER 80.9

Results For The 12 Months To End January 2019 – Revenue up 4.1% (to £17.6m), Loss of -£1.8m (£-1.6m last time).

Still not enough here to get me more interested at present.

CML Microsystems ( CML Microsystems (LON:CML) ) – 292p – £50m – PER 12.2

Trading Update For The 12 Months To End March 2019 – Revenue to be down -11% (to £28m), PBT circa £3m, Net Cash at £12.8m. First few weeks of the new trading year has similar headwinds to preceding few months.

I remain on the side-lines, looks potential for another warning, perhaps!

Eckoh ( Eckoh (LON:ECK) ) – 40p – £102m – PER 32.2

Trading Update For The 12 Months To End March 2019 – In-line, Net Cash at £8.3m (£3.6m last time), excellent sales pipeline.

There's a lot to like here but I notice negative EPS growth forecast for 2019E with 2020E still being lower than 2018A – I remain on the side-lines for that reason alone.

Ideagen ( Ideagen (LON:IDEA) ) – 128p – £295m – PER 24.7

Trading Update For The 12 Months To End April 2019 – Strong, expects results to be marginally ahead of market expectations.

Based on a small beat on the current estimates I have, seems about fairly priced here – Will keep an eye out for revisions.

Michelmersh Brick Holdings ( Michelmersh Brick Holdings (LON:MBH) ) – 97p – £89m – PER 12.8

AGM Statement – Robust, confident FY will be in-line.

I still believe forecasts are for negative EPS growth in 2020E. Could be tempted here if those forecasts are revised.

Portmeirion…

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1Spatial plc is a holding company. The Company's principal activity is the development and sale of information technology software along with related consultancy and support. It operates through three segments: Geospatial, Cloud Services and Central costs. The Geospatial segment includes the core 1Spatial Group, including France and Belgium, and Laser Scan Inc. The Cloud Services segment is represented by Enables IT and its two smaller businesses: Avisen and Storage Fusion Limited, and its associate, Sitemap Limited. Its geospatial technology enables organizations to manage, validate, integrate and interpret spatial data from different sources. Its products and services include 1Integrate for ArcGIS, 1Spatial Cloud, 1Spatial Management Suite, Elyx Suite, FME, Geocortex, G-Cloud Services, consultancy, support and training. Its clients include national mapping and cadastral agencies, utility and telecommunications companies, and government departments, including census bureaus. more »

LSE Price
36p
Change
 
Mkt Cap (£m)
39.8
P/E (fwd)
33.5
Yield (fwd)
n/a

CML Microsystems Plc designs, manufactures and markets a range of semiconductor products for use in communications and data storage industries. The Company offers semiconductor products for professional applications within the storage, wireless and wireline communications market areas. It operates in the United Kingdom, the United States, Germany, Singapore and Taiwan. The Company offers semiconductor products for storage applications, such as Industrial flash memory cards (CompactFlash, secure digital (SD) card, multi-media card); solid state drives (SSDs), embedded storage and special function cards. It offers semiconductor products for wireless applications, such as professional and industrial analogue/digital radios (voice centric); wireless data products (radio modems, pagers, telemetry and marine safety). It offers semiconductor products for wireline telecom applications, such as security alarm panels, point-of-sale, health monitors, meter reading and telephone exchange. more »

LSE Price
320p
Change
 
Mkt Cap (£m)
54.6
P/E (fwd)
n/a
Yield (fwd)
n/a

Eckoh plc is a provider of multi-channel, integration and Payment Card Industry Data Security Standard (PCI DSS) payment solutions for contact centers. The Company's segments include Eckoh UK and Eckoh US. It offers secure payment solutions CallGuard and EckohPAY. CallGuard ensures contact centers remain secure and PCI DSS compliant by avoiding sensitive card data from being heard or seen by agents and from being stored on call recorders in network systems. EckohPAY allows consumers to make automated secure self-service payments through mobile devices, interactive voice response or Web. The Company also offers agent-assisted and self-service automation across voice, mobile and Web channels, giving users to choose how and when they make purchases or get in touch with their providers. more »

LSE Price
48p
Change
 
Mkt Cap (£m)
121.9
P/E (fwd)
30.7
Yield (fwd)
1.5



  Is LON:SPA fundamentally strong or weak? Find out More »


11 Posts on this Thread show/hide all

MrContrarian 14th May 1 of 11
5

My morning smallcap tweet: Cellcast - sell fast.

Duke Royalty (LON:DUKE), Cellcast (LON:CLTV), Conygar Investment Co (LON:CIC), Hardide (LON:HDD), Portmeirion (LON:PMP), Microsaic Systems (LON:MSYS)

Duke Royalty (DUKE) defers 2 loans, swaps another for more royalties. Boosts rev by at least £3.7m over 5 years.
Cellcast (CLTV) FY18 poor as foreseen in Nov trading stmt. Poor trading has continued plus higer taxes in Kenya saw reduced fees for our technical and consultancy services to overseas gaming and lottery operators. More cost cuts. "There has therefore been increased focus by the Directors on the long-term viability of the economic model that the group utilises which has prompted the Directors to undertake a review as to the prospects for the group going forward. The Board is currently exploring all options available to the group." What a clunker.
Conygar Investment Co (CIC) H1 big loss due to 100% (£18.5m) write down of Haverfordwest land value due to weak demand there. NAV NAVsh 179p down 22.3p despite buying back 5.4% of shares. How can the land be worth zero? Will help future profit of course. I'm not a fan of the CEO Robert Ware.
Hardide (HDD) H1 rev up 9%, pretax loss doubled to £650k. Guides RY rev at the lower end of market expectations. Blames some short-term disruption with one customer and the unpredictability of larger customer projects.
Portmeirion Group (PMP) A rare warning from this quality outfit. Weak Korean sales means FY pretax will be significantly below market expectations. Will maintain expected divs.
Microsaic Systems (MSYS) Bullish. Orders (not rev) YTD (4.5 months) significantly above whole of prev H1.

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andrea34l 14th May 2 of 11
3

I hold Ideagen (LON:IDEA) but I'd probably agree with you that they are about fairly priced. However, at the interim stage revenue and adjusted EBITDA were up 22% which implies that H2 has been stronger.

Interims from EI (LON:EIG) are out today showing only very marginal increases in profit and NAV, while eps is up to 10.8 vs 9.8 due to daily buybacks. LFL sales are good though at 6%, and better than announcements from competitors recently. The price is up 3% so the market quite likes this.

As suggested by weekend press, the dividend has been quite markedly reduced by Vodafone (LON:VOD) with FY revenue down 6% and operating loss of -951m vs profit 4,299m last time. So glad I sold... :-)

Unfortunately I have been bitten by the shock announcement from Portmeirion (LON:PMP) and am obviously disappointed; am trying to sell them during any dead cat bounce as I write...

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matylda 14th May 3 of 11
1

In reply to post #476056

Morning,

Sorry to hear about Portmeirion (LON:PMP) :(

Blog: Briefed Up
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jonesj 14th May 4 of 11
1

In reply to post #476031

Hardide (LON:HDD) seems to be a never ending story of losses & shareholder dilution to keep the show on the road. No sign of the cycle being broken at the moment.
Even the contract announcement today is for the Airbus A380......

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andrea34l 14th May 5 of 11
1

In reply to post #476061

Thanks :-( One thing it proves is that one shouldn't invest just based on Stockranks... not that I did, but this is rated well at 92, it also has a good ROCE; on the downside, the PEG is too high (1.96)

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matylda 14th May 6 of 11
2

Hardide (LON:HDD) - Number of shares almost doubled in 5 years, Debt and not profitable - Uninvestible for me.

Portmeirion (LON:PMP) - To be fair the metrics actually look reasonably sound (well they did before today), tend to agree PEG is high even taking into account the yield.

Blog: Briefed Up
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LongValue 14th May 7 of 11
2

Zytronic (LON:ZYT) Profits appear to have been hit by a change in the sales mix. With sales to the gaming sector falling, the increase in sales to other areas has not made up the shortfall. It also experienced a 33% increase in stock levels (This does not appear to be seasonal). Presumably, this reflects disappointing sales of its larger, and higher margin, panels. The one issue I have with this is whether they can be sold in the future or is the market changing so rapidly that they could become obsolete? But putting it into perspective, stock has increased by just under a million pounds. However, at the 2018 year end, it had £12.1 million in cash. If we subtract £1.2 million for the interim dividend payable to the 31st March 2019 and it still has around £11 million in cash and that assumes no cash generation but no major capital expenditure.

The upshot is that EPS for the period has fallen by 37% to 7.4p. There could be an improvement in H2 but this is very much a business that is driven by projects outside its control – importantly, it does not have a large customer base. And the management does not appear to be that bullish about the second half.

The big upside and the key factors in my holding the company is a strong balance sheet with plenty of cash, no debt and the maintenance of the dividend. Basically, it looks like a business that can ride out a slump. Incidentally, it's worth noting that both its distribution and administrative costs have fallen compared to the same period last year. It seems to be in control of its costs at a time when it needs to be.

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simoan 14th May 8 of 11
1

In reply to post #476136

...the PEG is too high (1.96)

Don't forget, some of us only use PEGs for hanging out the washing! It's not a metric I have ever used tbh. I once took a look at it many years ago and discovered that screening out based on PEG >> 1 would have kept me out of far too many successful investments. Apart from anything else earnings growth is a future unknown that relies on broker forecasts, and it's well documented how unreliable they are.  I think PEG is a pretty useless metric.

All the best, Si 

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andrea34l 14th May 9 of 11
1

In reply to post #476211

"I think PEG is a pretty useless metric"

Other people, and methodologies, consider it a key filter; I am on the fence...

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simoan 14th May 10 of 11

In reply to post #476236

Other people, and methodologies, consider it a key filter

Apart from Jim Slater and son, who? I don't believe I have ever heard Terry Smith or Warren Buffet mention it. They probably don't even know what it is. However, if you use PEG as a filter, you're highly unlikely to end up owning any shares that they hold.

All the best, Si

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matylda 14th May 11 of 11
2

In reply to post #476251

Each to their own - If we all used the same metrics wouldn't it be fun !

Blog: Briefed Up
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