Headlam Share Discussion Threads

[miti 1000] 15/5/2015 11:20

You are not the only one ....

Probably an interim statement on the 21st May, I've been told.

[battlebus2] 15/5/2015 09:01

Continuing to buy these :))

[battlebus2] 11/5/2015 22:58

I don't think we will have to wait long before we see another acquisition here, and we go x dividend next month on the 4th of June for 12.3p.

[woodcutter] 11/5/2015 14:39

you may be right, hasn't been much of a pull back and now broken out further. i was hoping for a drop back to around 450pish.

woody

[jeffian] 11/5/2015 12:51

woody,
Nothing wrong at all with taking a profit. I drew my conclusion from your reference to "consumer spend patterns" and this "cyclical stock" from which I understood you to mean it had gone as far as it could go in this 'cycle'. It's hardly started yet IMHO!

[battlebus2] 11/5/2015 12:36

No one has mentioned the possibility of entering the ftse small cap. :))
Anyway we are moving higher I've no doubt.

[essentialinvestor] 11/5/2015 10:57

What I attempt to look for when investing is a fortress like balance sheet preferably
stuffed with cash, and a simple easily understandable business model.

You can make a lot of different figures look presentable, however Free Cash Flow
is the gold standard metric IMV and usually it points to underlying quality.


With HEAD and PHTM I net off the cash and recalculate the PER on that basis,
it's a more accurate value indicator imo.

[battlebus2] 11/5/2015 10:54

Thanks Woody et al, also pays a tasty dividend nearing 4%.

[woodcutter] 11/5/2015 10:33

jeffian i hadn't thought i'd implied it was at the top, it most likely will have further to go. However the spike up was a significant move and an opportunity to take some profit if it pulls back then i may reinvest. As i stated i'm trading more frequently in the current market. Too many stocks i'm following are range bound, rising and then falling within a consolidation zone.

Agreed the long term FA looks good and as i've stated in previous comments it looks undervalued relative to it's peers.

No harm in taking a profit you can always buy back if you wish.

woody

[essentialinvestor] 11/5/2015 10:31

Add when it's out of fashion, the share price moves about a bit as previously
mentioned.

PHTM and HEAD my current favourite small caps.

[cisk] 11/5/2015 10:05

For me, it's a long term hold. This is a conservatively-managed company, they've been expanding during the recession, both by buying up smaller competitors and by investing in new facilities (new distribution centre in Milton Keynes).

Europe seems to be the thorn in their side, but given time it will eventually improve.

Even carpetsh1te is doing better - so this gives me confidence that HEAD will continue to improve - and I think it still looks cheap. I'm sure it will pull back a bit, given the recent rise, but I believe the long-term fundamentals are good.

[jeffian] 11/5/2015 09:58

With a recovering economy and housebuilding being near the top of the political agenda, why would you think the cycle in floorcoverings is anywhere near the top?

[woodcutter] 11/5/2015 09:47

Exb bb2 thanks for your note on HEAD. Thought it wise to let you know i've sold out now on the spike, it was always a short term trade for me based on the consumer spend patterns, perhaps it's been a little shorter than i'd expected.. Whilst those spending patterns may continue the spike up was too much not to take advantage. I'm montoring the chart now for a pull back at which point i'll consider re-entry.

I'm keeping a few long term holds but trading more frequently in the current market particularly these cyclical stocks. And still have around 40% cash.

will let you know if/when i buy back in again.

woody

[battlebus2] 10/5/2015 10:46

Having a look at this one, some interesting factors that could lift the share price, they are already trading on a cheap forward p/e so should continue to climb but with a trading update in a few weeks we may see more positive trading as they already said the first few weeks are 3.3% higher. There's also the added bonus that they MAY meet the criteria to enter the ftse small cap index. If so a lot of trackers will buy and push the price up and if not we still have a solid business with improving trading and a reasonable to low valuation.

Top of my watchlist ATM and waiting to time an entry point, also good to see some familiar names on the board Woodcutter and Exbroker.

Anyone thoughts appreciated?

[miti 1000] 21/4/2015 13:32

Any read across from the carpetright results ? Seems Europe is picking up for them.

[exbroker] 15/4/2015 18:01

Greetings all
I bought a few of these today, there is still a seller out there but buying interest as well. Could be interesting over the next couple of months....

[woodcutter] 11/3/2015 11:16

picked up a few more

wc

[essentialinvestor] 05/3/2015 17:12

I bought the recent low on CGS, Ruffer look to be adding again.

[woodcutter] 05/3/2015 16:54

CGS on the move today, been watching for a while but nasty spread. My teenage years are well behind me EI, closing in on the sixties now so safer homes for capital with reasonable risk return and yield are welcome.

I've still not fully invested my profits from sales first qtr last year so still quite a bit of cash to invest. I have to admit i'm being rather cautious as there are a number of metrics that look stretched, in particular the dollar index. Any sign of inflation and a rate rise and we could be looking at a significant reversal dependent upon how quickly rates rise.

As the $dollar index tend to have an inverse relationship with Au gold i've been picking up a few AUE recently, a little blue sky but could be very profitable if/when the cycle turns.

watching commodities and Au like a hawk at present.

HEAD may only be a two year investment for me, again linked to the cycle.

aimho woody

[essentialinvestor] 05/3/2015 15:58

In a way HEAD is similar to CGS, long standing management that believe
in investing in the business to make any improvements possible.

As with CGS, not a trading share as most will appreciate.

[cisk] 05/3/2015 15:47

I only managed to skim the results today, but they looked good on initial inspection.

Woodcutter, nice to see you on the Board. I agree they appear undervalued. I get the impression they are well run, quite conservative and have done well to expand the business during the recession.

I know you can't judge a book by it's cover, but it's a positive for me when I email CEOs etc and they reply back personally. Tony Brewer responded to some half year results questions 18 months ago (the same happened for Melrose and it's CEO when I emailed asking a few questions).

Obviously that in itself is not enough to buy the shares, just a single factor.

I also think there is significant pent-up European demand - as and when the euro economy recovers, the European results will improve.

[jeffian] 05/3/2015 15:33

....as a teenager in the '60's, they certainly do!

[essentialinvestor] 05/3/2015 15:15

Just a couple of points, once the CAPEX cycle on increasing distribution space
completes, it should give a further boost to cash flow.

Although Headlam was hit during the last recession it still remained
profitable through the cycle.

The share price can move around a bit, it's one to consider on a bad day IMV.

Also one of the first shares I bought as a teenager in the early 90's, oh my how the years fly by!

[woodcutter] 05/3/2015 14:19

made an initial purchase here today, can't help thinking it's undervalued in comparison to it's peers. Solid balance sheet and great cashflow and yield. Taking into consideration the likely increase in disposable income that's due to come into effect this year my view is we're likely to see greater discretionary spend on home improvements so all in all it looks a decent bet imv.

seems a number of well established and respected investors here think the same.

forecast per comparison with peers (figs from Digital Look)
HEAD eps 30.5 per 14.5
VCP eps 47 per 16.8
CPR eps 11.57 per 40 (bonkers if you ask me, never understood the valuation here)
UCG eps 1 per 9 (figs need further verification imv)
JHD eps 16 per 22.6
LTHM eps 39.5 per 15.5 (perhaps not comparable as it's a mixed business model)


granted there are a mix of slightly differing busines models in here, nevertheless HEAD looks out of sync to me.

purchase may be a little premature given possible double top and candle reversal pattern but will add further on any pull back.

aimho

woody

[essentialinvestor] 05/3/2015 08:02

Highly cash generative, and dividends increasing rapidly, overlooked imv.