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Real-Time news about Hamworthy (London Stock Exchange): 0 recent articles
|alter ego: I agree, Wartsilla are getting a bargain, but why is the share price above the offer if a counter bid is unlikely?|
|qvg: Yes, Collins Stewart have raised their Target price to 678p
UK | Industrial Engineering | HMY.L | HMY LN 7 June 2011
Awash with cash in the dash for gas
Order book turnaround the next catalyst for share price appreciation Quest value (adj) 678p
Yr to Mar £m 2010A 2011A 2012E 2013E 2014E
Sales 214.3 181.6 210.0 235.0 252.5
EBITDA 22.6 16.0 16.5 19.5 20.4
adj. EPS (p) 33.3 24.1 24.3 29.4 31.0
EV/EBITDA (x) 8.1 10.8 9.6 7.6 6.7
P/E (x) 17.0 23.5 23.3 19.3 18.2
Div. Yld (%) 1.6 1.8 2.0 2.2 2.4|
|alter ego: I doubt there is any immediate benefit to HMY from Japan's nuclear troubles but gas is an alternative fuel which requires the specialised equipment HMY supplies to transport and store it. Over time there may be an increase in demand if nuclear power projects are delayed throughout the world so there may be a longer term positive effect for HMY.
Regarding Japan itself, one has to wonder how they could make the gas storage required by a power plant earthquake and tsunami proof but that's another issue for them.
Meanwhile, the HMY Share price hasn't been this high since September 2008 and seems to be anticipating the eoy trading update. I hope we are not disappointed when it comes.|
|mdrans1: Maybe Hamworthy's share price has a connection with the turmoil in north Africa. Will more oil /gas need to be transported by ship or will the higher oil price just cause economic depression that reduces shipping in general?|
|philo124: Interesting, if share price was going anywhere.|
when you say "earnings moved down again next year to 18.5p"
do you mean y/e march 2010 or march 2011.?
I'm not sure how much sales will fall in y/e march 2010,because turnover in y/e 30/3/09 was 252.8m and the y/e order book was 260.4m.
Turnover could fall more in y/e march 2011 however.
Having said that they are incredibly cash generative. They floated with net debt and if you exclude the 55m net cash they are incredibly cheap on an EV/EBIT basis which I think is the only sensible valuation method.
I've no idea what will happen to the share price in the near to medium term . But i do believe very strongly the share will increase appreciably at some time in the future.|
|alter ego: slap, you're probably right about profitability of acquistions or at least in thinking they may not have been making much profit. That's where the synergy bit comes in and being part of HMY opens up opportunities. The Baltic Design Centre would never have had a sniff of work on Chinese ships or with Petrobras in Brazil. The water/oil separator unit they bought from Aibel never made money because it was small beer for Aibel and they didn't market it effectively. Greenships will definitely do better with HMY connections to some major shipyards than they would have on their own. Serck Como certainly looks an astute purchase and is enlivening the water division.
Short term I don't see much to excite the share price but as a long term investor I'm prepared to wait and collect the dividend while they develop the business. When the world economy starts to fire on all cylinders I believe HMY will be well placed to benefit.|
|alanrex: im actually not far from my near term price target. Its a strange one as the share price doenst look expensive to me or anything near it, especially when you account for the cash on the balance sheet.
all imo dyor|
|onlythebest2: great preliminary results - on the basis of these, the share price should rise a good 50% to 100% for the price-earnings ratio to be about right. i'd expect share price rise to 300 at least. resilient, growing business hamworthy.|
|alter ego: Forget broker tips, rely on facts. HMY have £56m net cash, an order book worth over £300m, top drawer products that sell because they are high quality rather than cheap, a diverse customer base and forecast earnings of at least 32p this full year. HMY have shown the ability to adapt and develop their technologies to serve new markets and to stay ahead of the competition. The share price appears to have been driven down simply because they are associated with shipping and the market has made the assumption that this is bad news as feight rates have collapsed. HMY have said that "The Group operates in four main markets: gas transportation and production; oil transportation and production; cruise ships; and merchant shipping. The oil and gas markets in aggregate account for over 75% of Group revenues with merchant shipping accounting for less than five per cent." This sector is likely to be more resilient (IMO) as long term demand for energy is not going to disappear and ships and storage cannot be built at short notice.
Allowing for the net cash, this stock is now priced at a couple of years earnings when it used to be on a p/e in the mid twenties not so long ago. I believe they are grossly undervalued at this level. New orders may be slower to come but this is a well run company with a rock solid balance sheet and when the turn comes, £2 a share will look an absolute steal. Visit the company website for well laid out explanation of products and markets plus informative investor relations section. AE (long term holder of HMY stock)|
Hamworthy share price data is direct from the London Stock Exchange