Good afternoon!

I've managed to find a quiet corner of Vienna Airport, so will have a quick whizz through the day's RNSs before boarding my flight back home later this afternoon.


Waterman (LON:WTM)

Share price: 90.5p (up 1.7% today)
No. shares: 30.8m
Market cap: £27.9m

(at the time of writing, I hold a long position in this share)

Trading update - a nice clear, in line update today, from this group of engineering consultants, saying;

The Board expects to report Interim Results consistent with market forecasts for the year as a whole, with increases in revenue, profit and operating margin percentage compared to the prior year comparable period.

 Also, the cash position has improved;

Waterman has experienced a successful interim trading period and a continuing emphasis on working capital management has resulted in a significant improvement in the Group's net cash position, notwithstanding the increase in activity.  The Group expects to report net funds at 31stDecember 2015 of £6.5m (£3.8m at 30th June 2015 and £3.6m at 31stDecember 2014).

Valuation - broker consensus is for 7.8p EPS this year (ending 30 Jun 2016), and 10.0p next year. Having done my research, my view is that these figures should be fairly readily achievable, due to turning around one loss-making division (it only needs to reach breakeven to considerably boost full year profits for the group). Also management seemed very upbeat about their pipeline for several years to come, when I interviewed them in Oct 2015 here.

My opinion - I reckon a share price of 120-150p looks achievable over the next couple of years, based on possibly out-achieving on the 10p EPS forecast for 2016/17, and using a PER of say 12-13.

Meanwhile the divi yield of 4.0% is pleasing, and note that the StockRank is 98, so a thumbs up from Stockopedia's algorithms too. It may not be the most exciting share out there, but in my view looks a reasonably decent place to park some money for a couple of years. One has to be mindful of the cyclical nature of what they do, so at some point business is likely to turn down, as it does periodically.

Note that Waterman shares peaked at around 200p before the GFC in 2008, and it looks as if the number of shares in issue then is similar to now - I've checked back to a "Voting Rights" RNS from late 2007, and…

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