Conduit Share Discussion Threads

[gargleblaster] 09/1/2015 01:08

Tough call for me riv. Partly technical as the chart looks a bit iffy. I accept that it is good and cheap with a useful divi, but I have some concerns regarding cashflow (lower than norm eps in the current year and 3 out of the last five) and growth which has been pretty stagnant - turnover per share has not increased in the last 3 years. So to me it has elements of being a value trap. Also to be frank, I don't know enough about the business - probably a result of casting my net too wide! However I much respect your views and may regret my decision tomorrow!!

[madengland] 08/1/2015 16:32

And you Riv. As I said I still like the stock if the economic cycle stays good. But CRE needs good news to rise from here I feel. Bad economic numbers it drops, ok or good one it drifts likely down a bit until BB reports real major progress. That's my bet. Get in lower or much lower dependant on above. All the best to you to!

[rivaldo] 08/1/2015 16:16

With 13.1p EPS forecast for the year starting soon - and with a cash pile taking the ex-cash further into single figures - I'm happy to stay put for potentially a lot more.

Especially with H2 having started well per the last outlook statement.

Volumes are low today. And we may see more buybacks too.

Good luck anyway.

[gargleblaster] 08/1/2015 15:42

Mad - I got out too with moderate gains in my case. Not keen when you see a fall on a strong stock-market day - and chart could turn ugly. Like you - am on sidelines for now.

[madengland] 08/1/2015 12:57

Got out during the hype and nice rally. Where will this settle now. Still positive of the long term IF the economy does not come off boil. Unless news comes we don't expect, happy to sit and watch this drop off whilst economic indicators become clearer. Any signs of a downturn from Europe hitting us and this could fall sharply. But CRE when it's dirt cheap and sell after a rally has been the only way to make money here, apart from an ok divi. All the best, watching closely to buy in after a steep drop or a good economic outlook.

[rivaldo] 29/12/2014 09:04

Good to see the share price rising on just a 3,600 share buy - perhaps it's hard to find any stock.

Thx for the IC tip article gargleblaster - strip out the cash pile and CRE are still on a single-figure P/E - with that foreign exchange benefit set to boost H2 as well.

[smithie6] 28/12/2014 19:26

"but with sterling falling back almost 4 per cent against the US dollar since the September half-year end, and around 7 per cent below its first half average, this first half forex headwind has turned into a second half tailwind for Creston."

very good/valid pt there about currency imo

[gargleblaster] 22/12/2014 12:49

Update from "Tommo" at IC

The re-rating I predicted at small-cap marketing communications company Creston (CRE: 129p) has worked out a treat and last week the shares had now run up into the middle of a historic price band between 130p and 135p, and to within pennies of my year-end target price of 135p (‘Buy the break out’, 4 November 2014). In the current market environment a 10 per cent gain during which time the market is down around 4 per cent is not to be sniffed at. That said, there are sound reasons to continue to run with the position.

Interims at the end of last month demonstrated solid organic growth: like-for-like revenues rose 4 per cent to £37.1m and drove up pre-tax profits by 9 per cent in constant currencies. True, the strength of sterling clipped 3 percentage points off that profit growth rate when Creston reported its numbers, but with sterling falling back almost 4 per cent against the US dollar since the September half-year end, and around 7 per cent below its first half average, this first half forex headwind has turned into a second half tailwind for Creston.

Operationally, the company is performing well. Significant new business wins include contracts with Danone, McCain and insurer Allianz. Digital is a key component of this growth as this segment now accounts for over half of all revenue. It's higher growth, too, as global internet advertising spend is forecast to grow by almost half in the next four years. Creston domestic bias is also working in its favour as over two-thirds of revenue is generated in the UK, a country with the highest economic growth rate in Europe and also the largest internet advertising market.

And there are obvious cross-selling opportunities across the business to create a more integrated agency group, an area the board are targeting with its Unlimited brand. A £6.3m cash pile, worth 10p a share, provides ample funding to pursue organic growth and make selective acquisitions in the digital marketing.

Trading on 11 times full-year earnings estimates, and underpinned by a 3 per cent yield, I would continue to run your profits if you followed my buy advice last month.

[rivaldo] 18/12/2014 07:12

RNS - DBay continue to buy. Another 634,000 or so shares takes them to above 15% with 8.93m in total:

[rivaldo] 16/12/2014 13:40

Sanlam Securities today reiterates its Buy and 150p target price:

[rivaldo] 15/12/2014 11:55

The 375k at 129.25p (and the earlier 30k buy) seem to have caused a jump to another new recent high....

[gswredland] 15/12/2014 08:37

Wow very interesting gargle - thanks

[gargleblaster] 14/12/2014 22:06

If investors could identity companies that are "machines for destroying value" by looking at just one figure, you'd expect it to be the most widely used measure of all.

But although some fund managers swear by this number, the "return on capital" (also known as return on capital employed or ROCE), it is barely known among private investors, whose favourite ratio is probably the "price to earnings" or p/e of a share.

Terry Smith, whose Fundsmith Equity fund has been one of the best performing global equity funds since its launch four years ago, is a firm believer in the usefulness of return on capital.

He says he won't consider investing in any company unless it can achieve a return on capital of more than 15pc. "There are plenty of companies out there with a return on capital of 30pc - why would you bother with 15? he said. "If it's 10 or less, the company is a machine for destroying value."

Why all the above you may wonder? Creston's ROCE is currently 76!!

[rivaldo] 14/12/2014 11:52

Great to see the share price creeping up every day..

Still cheap though imo considering it's barely on a double-figure P/E though, with over a 3% dividend and a healthy cash pile reducing the ex-cash P/E to single-figures.

[smithie6] 13/12/2014 13:56

Creston share price doing very well while UK mkts have fallen a lot in last week
(partly due to having some cash and not debt ...and low P/E ...I guess)

[rivaldo] 10/12/2014 07:34

Another positive mention:



"Marketing communications group Creston is currently the star performer – the shares up from 87.5p to a current circa 125p. This follows encouraging full-year results in June being followed by positive interims last month which provided confidence that full-year forecasts of 12.5p of earnings per share and 4.1p of dividends per share remain eminently achievable. With further growth expected next year, the shares continue to look attractive income value."

[rivaldo] 08/12/2014 23:19

Nice close....and new recent highs.

[rivaldo] 08/12/2014 08:46

Another positive article this weekend - note that their EPS is out of date and has been increased to 12.7p EPS as pre my post above.

Given that their 150p would be a current year P/E of only 11.8 - and probably only 10 or so stripping out the cash pile - I'd say 150p would still be cheap:



"Marketing communications group Creston plc (CRE) has announced its results for the six months to 30th September 2014 and that “current trading is in line with its expectations for the full year”.

The results show an adjusted pre-tax profit of £3.77 million on revenue of £37.30 million (up 4% like-for-like on the corresponding 2013 period), generating earnings per share of 4.99p, up from 4.36p. After particularly £1.09 million of tax, a net £1.48 million working capital outflow, £1.60 million of dividends paid and £1.21 million on share buybacks, cash (net) was £1.16 million lower at £6.29 million.

The company noted that it, despite remaining cautious in light of the global macro-economic climate, “as in previous years, anticipates increased revenues in the second half of the current financial year” and we continue to consider full-year forecasts of 12.5p of earnings per share and 4.1p of dividends per share (an increased interim dividend of 1.35p per share is to be paid on 9th January to shareholders on the register at 5th December) eminently achievable.

With further growth expected next year, despite at a current 126p-129p being well ahead of the 87p offer price at which they were tipped on our Nifty Fifty site less than a year ago, the shares continue to look attractive reasonable value. We'd consider c150p an exit point so pro tem we’d still see upside."

[qs99] 02/12/2014 10:55

thanks riv....continuing to see good volumes IMO hopefully will see this continue its ascent under new management....

[rivaldo] 01/12/2014 08:31

New Edison note FYI - and forecasts have been increased...

They now go for 12.7p EPS this year, with a 4.1p dividend.

Next year it's 13.1p EPS, with a 4.4p dividend.

They also forecast £5.4m net cash at the year end, and note that CRE are on a 13% discount t0 other UK-quoted comparators:

[madengland] 28/11/2014 23:19

Yes indeed it's sure looking that way! Personally I am not adding, but that could be a mistake. In my mind the 200p target was a bit further off now, but I sure ain't expecting the share price to dance my tune.

[gargleblaster] 28/11/2014 15:32

madengland - you may be better off topping up now - can't see 110p any time soon!

[rivaldo] 28/11/2014 15:24

Yep, and good to see the price rising on decent volumes too, with over 300,000 already traded today.

[qs99] 28/11/2014 12:11

looks like it is moving through £1.30 soon IMO at this rate! nice to see...

[rivaldo] 28/11/2014 09:09

RNS late yesterday - DBAY are continuing to buy and are now up to 14.11%, having bought another 1.465m shares to reach 8.3m....



What with the share buybacks as well there can't be too many spare shares floating around at present. I'd guess that DBay have now bought the remainder of Don Elgie's stake, so that tidies up another loose end.