Hi all,
Just looking at Polypipe and am liking what I've found so far. Anyone a holder, got a view?
Cheers
Paul
I bought some shares in Polypipe two months ago after some detailed research. I believe that its prospects are pretty good.
About the Author
Hawkipa
Former corporate bond trader. 18 years in The City. Now trying to suppress the urge to trade and learning how to be a long term investor. Diversifying away from corporate bonds into equities. more »
16 comments
hawkipa
Thanks Warranstar. Reading through the IPO prospectus and R&A, I have fears over cyclicality and average earnings over the last five years along with Free cash flow generation. Apart from those things I didn't find a lot to scare me.
It does feel like it has an 'economic moat' in terms of brand recognition, high barriers to entry and few competitors.
Paul
WarrantStar
Well Hawkipa
I will share my more detailed analysis of Polypipe below. Pls forgive the capitals.
ALL STOCK RANKS VERY GOOD EXCEPT V AT 39. SCORE ON JUNK TEST 100%. PEG AT 0.7 IS GOOD. SALES GROWTH IS ACCELERATING. EPS FORECASTS 22% 26% ROCE & MARGIN GROWING FAST. FCF GROWING. DEBT IS STABLE. PIOTROSKI IS 8. RECS FROM IC & SHARES MAG. MOAT IS GOOD. GOOD EC CLIMATE & OUTLOOK STATEMENT. GOOD SWOT. GFMOS IS GOOD AT 90%. RELATIVELY PREDICTABLE BUSINESS.
Richard Goodwin
It might be worth checking out old Annual Reports of IMI as they bought Polypipe in 1999 and sold it in 2005.
hawkipa
Thanks for that. GFMOS - is that something to do with growth and momentum. Am I being thick. Also, not aware of the junk test? Thanks again. V helpful to here another view.
WarrantStar
Hawkipa
GFMOS is the Graham Formua Margin of Safety. I calculate my own value for this using the calculator on here.
The Junk test is a scoring system that I have made for myself to flag up whether a share is more likely than most to underperform. It assesses the following aspects:
Listing on aim or main market.
Reporting currency
Volume of discussion on bulletin boards
% of shares shorted
Head office Country
Countries where the most employees are located.
My spread sheet comes up with a composite score for the Junk test based on the above factors.
hawkipa
Just checked FCA and short racker.co.uk and doesn't seem to be a single short against it currently fyi.
vik2001
still looks like a great growth company to me, well done to all current holders. I'm going to buy back in having exited early last year
iwright7
Vik,
I brought in 3 weeks ago - My buying notes below, which are unchanged since. Ian
Good recent results with broker upgrades. Passes 52 Week High, Naked Trader, Zulu, and Bold Revisions screens. SR 97, Q 97 (+20) and QM98, F8 and very low Beta. Higher Divi and a confident outlook. Operational gearing from acquisitions. UK construction sector is doing well, so undervalued for metrics and growth. Boring and under the radar.
vik2001
I have a good friend who runs a plumbing shop, he was saying most builders are buying polypipe fittings as its easier and safe to run in new builds. also due to the price of copper pipe going up everyone wants to purchase plastic increasing his sale of polypipe. defo under the radar but I predict good steady growth from this share.
hawkipa
PLP having a shocker today, after a very good run. Can't see any news to cause it, so presume just a pullback after very strong performance. Anyone any ideas? Thanks. Paul
doug2500
Well their debt level is a bit high for my liking, and new executives are a minor worry, but I've still swallowed a few today.
There's not much these days with the cash generation of Polypipe (LON:PLP) at this sort of valuation.
Having said that, any sign of a slowdown or rising debt and I'll be off. The positive first third of the year gives me hope this will not be the case, in fact I'm quietly hoping it signals a small outperformance.
vik2001
looks like a good entry point today to get back in after the little drop, seems to have found some ground again.
vik2001
its been creeping up over the last week, results are coming soon - is it going to be expectations? I reckon it will - others thoughts? wondering whether to top up....
