I Read The News Today Oh Boy! 8-Nov-2017

Wednesday, Nov 08 2017 by
12

Morning All!

Stadium ( Stadium (LON:SDM) ) – 8-Nov-2017 – 102.5p – £42.6m – PER 8.75

Trading Update  – Expects to report YoY Revenue increase of 15% to £61m (£53.1m last time). Customer delays mean PBT will be below current market expectations (single digit percentage growth). Increased Net Debt also expected. On the plus side, the order book is a record £32m+ (up from £25.8m at 31-Dec-2016) and double-digit revenue and PBT growth is expected next year.

On a PER of 8.75 already, any dip here could be a decent buying opportunity. Although that Net Debt of £6.54m (15% of Mkt Cap) which is expected to increase is a concern – I'm on the fence here.

Innovaderma ( Innovaderma (LON:IDP) ) – 8-Nov-2017 – 229p – £32.5m – PER 16

AGM Statement And Operational Update – Quite a bullish update but no financials mentioned. New product (Roots) will go into 521 Superdrug stores from January 2018. The Executive Chairman states that “Growth prospects remain substantial” – Of course they do!

Since floating about a year ago this share has been on a rollercoaster, from 70p to 400 to todays level. I just have no idea how to take this one. It says it wants to replicate the success of Skinny Tan (with the Roots product for example) – I just have to wonder how successful Skinny Tan has really been.

Tracsis  ( Tracsis (LON:TRCS) ) – 8-Nov-2017 – 500p – £137.9m – PER 21.1

Audited Results For The Year Ended July 2017 – Classed as a “further period of good trading”, Revenue is up 6% to £34.5m (£32.6m last time), Pre-tax Profit is up 14% to £4.6m (£4.0m last time), Cash stands at £15.4m (£11.4m last time) and the full year Dividend is up 17% to 1.4p per share.

On a PER of 21.1 this looks fairly valued around here.

Craneware ( Craneware (LON:CRW) ) – 8-Nov-2017 – 1492.5p – £405.1m – PER 34.9

AGM Statement – A positive start to the 4 months of this year, well positioned to execute the growth strategy.

I do quite like this - Steady increases in Revenue, Profits and EPS here, 5%, 10% and 10% (CAGR) or thereabouts, respectively.  The ROCE is also impressive, consistently around 25% or so. There’s a small (1.5%) Dividend that’s well covered and it’s also got Cash (more than 10% of Mkt Cap).  So, there’s lots to like here but for me, the growth should be better than this to justify a PER of 34.9 – Although I did say this when the SP was 1250p and the PER was 30!

Ricardo ( Ricardo (LON:RCDO) ) – 8-Nov-2017 – 837.5p – £443.2m – PER 13.8

Trading Update – LFL Order intake up £33m to £106m. The CEO is pleased with the start to the year and looks forward to continued progress.

Wondering why this recent update is not more upbeat. On a PER of 13.8, if this increase in order book translates to profit, this looks decent value here. Good ROCE, Operating Margin and a decent well covered 2.5% or so Dividend. The fly in the ointment could be the £37m Net Debt and £18m (I believe) pension deficit - Although at less than 15% of Mkt Cap, that doesn’t seem over the top.

Nothing overly exciting here today for me!


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Stadium Group plc is a provider of integrated electronic technologies. The Company operates through two divisions, including Technology Products, which incorporates wireless, interface and displays, power and stontronics, and integrated Electronic Manufacturing Services (iEMS) provided through design and manufacturing operations in the United Kingdom and Asia. It offers various services, such as design (electronic, mechanical and software), prototype, new product introduction (NPI), global procurement, in house tooling and molding, printed circuit board (PCB) assembly, box build and test, packaging and global logistics. It provides wireless machine-to-machine (M2M) connectivity solutions for original equipment manufacturer (OEM) devices in vehicle tracking, telematics, fleet management, smart metering, asset tracking, wearable technology, handheld devices, infotainment and security systems. It serves various manufacturers in the marine, aviation, medical and broadcast industries. more »

LSE Price
121p
Change
 
Mkt Cap (£m)
n/a
P/E (fwd)
n/a
Yield (fwd)
n/a

InnovaDerma PLC is a holding company. The Company develops a range of male and female at-home and clinically proven treatments for hair loss, hair care, self-tanning and skin rejuvenation. It operates through hair and beauty division. Its products include Leimov Personal Hair Laser Starter Kit, Leimov Hair Treatment Pack, Leimov Bio Cleansing Shampoo, Leimov Thickening Conditioner, Leimov Scalp Therapy Day Treatment, Leimov Scalp Serum Night Treatment, Leimov Deep Cleansing Scalp and Body, Leimov Hair Treatment Pack for Her, Leimov Personal Hair Laser Starter Kit for Her, Leimov Vitality Shampoo, Leimov Follicle Boost Therapy, Leimov BioPlex Scalp Serum, Leimov Scalp and Body Exfoliating Spa, Leimo Instant Hair Introductory Pack, Leimo Instant Hair Regular Pack, Leimo Instant Hair Building Fiber, Skinny Tan-Ab Shader, Skinny Tan-Dermabrasion Pre-tan Primer, and Tan and Glow. It operates in the United Kingdom, the United States, Australia, New Zealand, the Philippines and South Africa. more »

LSE Price
136p
Change
-3.9%
Mkt Cap (£m)
20.3
P/E (fwd)
19.1
Yield (fwd)
n/a

Tracsis plc is a holding company. The Company is engaged in the business of software development and consultancy for the rail industry. Its segments include Rail Technology and Services, and Traffic & Data Services. The Rail Technology and Services segment includes its Software, Consultancy and Remote Condition Monitoring Technology, and also includes Ontrac Limited and Ontrac Technology Limited (together being Ontrac). The Traffic & Data Services segment includes data capture, analysis and interpretation of traffic and pedestrian data to aid with the planning, investment and ultimate operations of a transport environment and it also includes SEP Limited (SEP). It provides software products, consultancy services and delivers customized projects to solve a range of problems within the transport and traffic sector. It specializes in solving a range of data capture, reporting and resource optimization problems along with the provision of a range of associated professional services. more »

LSE Price
622p
Change
 
Mkt Cap (£m)
176.2
P/E (fwd)
25.1
Yield (fwd)
0.3



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


5 Posts on this Thread show/hide all

MrContrarian 8th Nov '17 1 of 5
2

Tracsis (LON:TRCS), Fair Oaks Income (LON:FAIR), Modern Water (LON:MWG), SRT Marine Systems (LON:SRT), OPG Power Ventures (LON:OPG), Avon Rubber (LON:AVON)

Tracsis (TRCS) FY adj EPS up 4% to 23.29p. Investec F/C 22.24p. Outlook good.
Fair Oaks Income (FAIR) plans to place shares at 2% premium to NAV at 31 Oct, to be announced. The issue is expected to close at 12:30 on 16 Nov. Qualified Investors can apply to Numis.
Modern Water (MWG) get sale of All-Membrane Brine Concentration technology to China. No figures.
SRT Marine Systems (SRT) the ever persuasive Simon Tucker will give his thoughts on future jam availability in a live webcast, 14 Nov. I hold.
OPG Power Ventures (OPG) FD replaced today. Internal promotion. That's odd, no RNS of FD's resignation, er his 'retiring from the Board'.
Avon Rubber (AVON) "has received confirmation from the US Department of Defense of the Group's participation under the Joint Enterprise - Research, Development, Acquisition and Production/Procurement contract vehicle ("JE-RDAP"). The JE-RDAP is an $8.2bn, 10 year multiple award framework contract which establishes a group of qualified contractors to compete for orders..."

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Wimbledonsprinter 8th Nov '17 2 of 5

I used to own Stadium (LON:SDM) but sold it some time ago because I lost confidence in the cash flow generation of the company. The normalised PTP figures which are quoted in the trading update regularly have a series of adjustments, which raises questions about their supposed one-off nature. I see N+1 Singer is now forecasting net debt of £12.5 million at year end (versus its year-end forecast of £9.4m, published after the interim numbers). This indicates the problem the company has controlling its working capital this year.

Also, although the trading update is indicating that the main reason for the profit warning is a timing issue, N+1 Singer has also made some significant cuts to its 2018 forecasts (both revenue and profits).

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Damian Cannon 8th Nov '17 3 of 5
3

I looked at Craneware (LON:CRW) a couple of weeks ago and agree with your assessment. This is clearly a well-run, profitable company making great returns on capital. The problems are that it's very highly rated at 36x P/E for steady growth and that the P/E multiple applied to the company has doubled over the last 4 years from a much more reasonable 18x (i.e. the share price has tripled while profits have only risen by 50%). 

I'm sure that the company will continue to execute but I think that the share price is unlikely to triple again unless profits put on a bit of spurt.

Blog: Ambling Randomly
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Beginner 8th Nov '17 4 of 5

In reply to post #237888

All very true Damian, but it is also worth remembering Craneware (LON:CRW) trade mainly in the US and therefore earn in dollars. The way we are heading that has to be a positive!

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Damian Cannon 9th Nov '17 5 of 5
1

In reply to post #238313

Good point - I'm definitely keen on companies with foreign earnings although you do have to be a bit careful to look through the positive FX effects when they talk about buoyant profits!

Blog: Ambling Randomly
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