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|yump: TRGI to buy DGS back.
No prizes for guessing what may have gone on here.
Or was it just the 'normal' passing of risk of expansion to the stock market instead of TRGI ? It depends whether you think DGS actually had a properly researched expansion plan I guess, as they have made very few inroads into any new markets.
Or was the clue in the total lack of detail year after year ?
"DGS, which was originally a wholly-owned subsidiary of TRGI, listed on AIM in February 2013 at a listing price of 159 pence per DGS Share. The purpose of the listing was to provide access to capital and raise the profile of DGS and accelerate the expansion of DGS's business to new geographical markets and industry verticals."|
|rivaldo: Cheers re the Techinvest info Aishah.
Looking forward to 9.51p EPS next year, if DGS continue to deliver it's easy to see a 140p-150p share price.|
|rivaldo: The share price held well yesterday considering it went ex-div for the interim 2.6c dividend (i.e around 1.85p).|
|rivaldo: Certainly looking good.
It would be nice to see larger volumes, but I suppose as it's so tightly held the obverse of that is that the share price will nicely upwards on any decent buying (as it's moved down in the past of course).|
|rivaldo: DGS is pretty illiquid, so potential buybacks of up to $500,000 could make a big impact on the share price.
They'll have to try a bit harder than Monday's RNS though! Perhaps we're now seeing some more buybacks going through.|
|yump: On the face of the business itself, when I bought at float and the share price rose, a p/e of 20 something seemed reasonable enough; 30 was getting a bit rich, but then again the future looked rosy - and not just based on some pie in the sky jam either.
It is the last company I buy at float anyway, however much I convince myself of the quality, I always forget that the purpose of the float is not to make new investors rich !
I think I'm more bothered by the lack of the news that I was hoping for in the years since float, than I am by a fear of not getting back to the float price. Given a year or so of solid performance, the float price isn't too far away and at least the divi is fair, so I'm hoping not to be sitting on a loss in a year or so's time.
Best case is they start converting some of these discussions with major corporates into lucrative accounts. I'd still like some numbers for that UK utility at some point.
Sometimes stocks behave in curious ways. KLBT has what looks like a quality business model, but is changing to SAAS, which has led to a drastic reduction in earnings forecasts for this next year. However, that share price has not got hammered like DGS did, despite being on a really high rating based on the forecast. (ie. the forecast dropped a lot, so the rating shot up from 20).
I guess its because KLBT was a 'planned' change, whereas DGS was an 'accident'.|
|saucepan: Thanks, yump; some interesting thoughts.
Some related comments on the following fundamentals (courtesy of ShareScope):
Turnover (achieved and forecast), over the eight-year period depicted, shows a consistent/perfect growth pattern. By that criterion, DGS is a growth stock.
It is profits and eps that have been so inconsistent!
If DGS can deliver 2017 forecasts (yes, a big "if"; but, on the other hand, these might well be upgraded if the recovery is indeed on track; and I note management now sounds very optimistic and bullish): then, the forecast P/E of 8.3 looks very cheap, especially considering the P/E rating DGS has commanded in the past.
The last time DGS was achieving eps around 8.5p, the share price was well north of 250p.
I know and accept that investor confidence in the Company has been dented since then, and there will be a price mark down accordingly. Even allowing for that, I still think DGS looks very "cheap". Technically, a further critical consideration for me is the lack of overhead resistance now until north of 125p as flagged above.|
|rivaldo: New recent highs now - impressive share price performance given the state of the markets.|
|thosewhocando: A few months back but makes for an interesting read.
'That said, I wouldn't dismiss this one out of hand. Its finances look stable, and the 50% drop in share price today could be a buying opportunity, if (as they expect) profits recover in H2. I note that a maiden dividend was paid in Jun 2013, but nothing since, so there has to be a question mark over divis.
It's probably not for me, but for the more adventurous readers, it might be worth a look, as potential turnaround situation.'
|rivaldo: Good to see you here GHF - and reassuring that you came to the same conclusion re the financials and prospects.
I too have an initial position here, awaiting further confirmation of the improvement in trading with the results in September.
It's certainly good to see the share price react so well to this morning's buying, suggesting that we might see good upside assuming the results are as expected.|
Digital Globe share price data is direct from the London Stock Exchange