I Read The News Today Oh Boy! 26-Feb-2018

26th Feb '18 by matylda

3 comments 2251 reads

Morning all!

I trust you all had a great weekend…

Dialight( Dialight (LON:DIA) ) – 532p – £173.0m – PER 16.7

Final Results For The 12 Months To End December 2017 – Underwhelming.

Remains on my Avoid list.

Quartix Holdings ( Quartix Holdings (LON:QTX) ) – 372p – £177.0m – PER 28.9

Audited Results For The 12 Months To End December 2017 – Revenue up by 5% to £24.5m (2016: £23.3m), PBT up 1% to £6.6m (2016: £6.5m), Diluted EPS down 4% to 12.21p (2016: 12.78p), Net Cash of £7.3m (£6.2m last time), Final Dividend of 11.1p proposed (2016: 9.0p).

OK the Net Cash is good (but nothing spectacular) and the Dividend increase is great (although it’s still only 3.5% or so). For me this is still on a crazy valuation given the actuals and forecasts. Maybe someone can point out what I’ve missed here!

All comments and input most welcome, a great day to all of you.

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MrContrarian

26th Feb '18

My morning smallcap tweet:

Feedback (LON:FDBK), Falcon Media House (LON:FAL), Avation (LON:AVAP)

Feedback (FDBK) H1 rev up 13% but post-tax - £348,079 (-£126,000). Do we need loss to the nearest Pound? "As a small team, we experienced some operational delays over the past 12 months [mentioned in Nov] which slowed our commercial progress, however the first CE marked release of the TexRAD technology in November was a major achievement for the Company and will underpin the next stage of growth."
Falcon Media House (FAL) wins deal to provide live and on demand digital streaming technology to JPR Network, the Mumbai-based cable network provider. First India contract. "Q-Flow overcomes the challenges of congested and slow connections to deliver content to the end consumer using the most efficient and cost-effective route, resulting in seamless streaming over even the most challenging networks and mobile conditions." I doubt that bit of hyperbole. Cap is a chunky £3.7m and Falcon shares have soared like a brick pig since IPO.
Avation (AVAP) H1 rev up 16% but EPS fell 15%. H2 outlook - a "materially increased lease revenue due to increased fleet size."

wildshot

Thanks for the daily updates Matylda. With regard to Quartix Holdings (LON:QTX) a PBT of £6.6m on revenue of £24.5m is a great margin which I like and see as a buffer. However you are right in that the valuation is a little high, I guess the margin helps maintain this but the growth in actual profits is underwhelming.

Strong margin, good cash generation are positives for this stock.

matylda

27th Feb '18

Hi,

You're welcome and thanks for the input.

Graham mentioned this also and I have taken note of both your input. I apply more bias to Rev/Profit/EPS growth than I do to ROCE (and Op Margin) and this example has opened my eyes a little more. Typically I use ROCE (and Op Margin) as a quick "quality" measure, I like to see them above the sector average.

Thanks again, all comment and input is much appreciated.

I Read The News Today Oh Boy! 26-Feb-2018

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Matylda

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