Looking at Tarsus

4th Jan '17 by John McHale

6 comments 5293 reads

Casting a very quick and high level look at Tarsus' company information I notice that:

Valuation; PE stands at around 19.7 but forward PE according to Stockopedia is 10.8 so is now a good time to buy before the next set of results are announced in mid-Feb?

Revenue last year was up to £82m from £50.9m so further research (FR) needed into latest trading updates.

Dividends; have grown consistently and current yield around 2.97%. Forward yield is 3.35% which is still lower than I prefer so I need to think about the potential for this stock to grow. Div cover though exceeds 1.5 which I'll take as a good sign.

Four brokers are saying strong buy so I need to find out how many of these are the house brokers.

The Altman Z1 score is a concern and I don't like the Liquidity Ratio being so low so I need to dig deeper into the liabilities/debt.

Happy with PEG, ROE, Operating margin, market to book, Net Profit Margin.

FR needed on share structure, director buying/selling and the balance sheet.

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EDWARD FORT

4th Jan '17

Tarsus is definitely a very good company.

Something that confuses analysts is that their main event, the Dubai Airshow, is bi-annual. So one year's figures can't be compared to the last.

Tarsus has virtually no exposure to the UK consumer, which is a plus. And all the earnings are non-GBP.

Carey Blunt

The motley fool have tipped it previously as part of the hidden winners service. They like the fundamentals.

gus 1065

5th Jan '17

Tarsus (LON:TRS) is also one of the 2017 picks on Phil Oakley's Sharescope blog discussing a shadow Joel Greenblatt adjusted Magic Formula portfolio. Quite an interesting piece comparing the performance of a basic JB portfolio over 2016 to a couple of variants adjusted to take into account off balance sheet liabilities and one focused mainly on Value metrics. Link here:-

http://www.sharescope.co.uk/philoakley_article134_f.jsp

Gus.

Howard Marx

I’ve owned shares in Tarsus off & on for the past 17 years. The company was set up by Neville Buch in the late 1990’s. He had previously run Blenheim Exhibitions Plc which he sold to UBM in 1996.

In summary my view of the company is:

Negatives

Tarsus has grown mainly from acquisition, so it is difficult to ascertain what the underlying industry growth rate has been & (more importantly) what organic growth is possible in the future.
Cash-flow: the free cash flows generated always appear less than suggested by net income. This is a problem given the high level of net debt.
Balance Sheet: As noted in the opening post, the Balance Sheet is heavily
indebted (Altman Z < 1.8x). In addition, the liquidity ratio is low principally due to a high level of deferred consideration held in Current Liabilities

Positives

The management team appear competent in executing their M/A driven strategy.
The industry is consolidating.Ultimately Neville Buch may wish to sell out just as he did 20 years ago (he owns around 9% of the company). Recent include deals include:
- Tarsus made two acquisitions in December totaling c£58m
- UBM’s acquisition of Allworld for $485m in December
- Informa’s £1.2bn acquisition of Penton in September 2016

They have some Turkish trade fairs, held in Ankara and Istanbul. These are unlikely to do well this year. But they are probably quite a small part of overall revenue.

Rusty2

Thanks for posting that link it interesting, good performance also. I will look into it further. I see Next (LON:NXT) is on 2 of the 2017 lists.

Looking at Tarsus

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John McHale

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