Rotork Share Discussion Threads

[robinnicolson] 03/2/2014 17:29

I was assuming the recent share price decline was due to the company's exposure to emerging markets.

They also received a downgrade from Credit Suisse today, from outperform to neutral. PT cut from 3250p to 2450p.

[redartbmud] 03/2/2014 12:44

APAD

Topped up today at £23.833p
Last IMS did not indicate problems, and despite IC comment I see no reason for the steep fall.

red

[jimijimone] 03/2/2014 12:02

Rotork shares usually on a par with Spirax but have dropped way behind them now.
Over £4 down since beginning of January.
Maybe new Mk3 actuator ranges produced at greater costs are not selling so well as previous Mk2. Maybe customers don't want to pay extra for features they don't need?

[apad] 03/2/2014 11:47

I was too quick off the mark with my £26 top up.
IC was commenting about how overpriced it is/was in their 350 review on Friday.
apad

[linhur] 03/2/2014 10:54

Credit Suisse downgrade reduce target price from 3230 to 2450 with a neutral outlook.In view of IMS on Friday which indicated ROR were on track for this year results, the CS analyst is not up to speed. However the news explains todays drop.

Linhur

[broadwood] 13/1/2014 10:32

Investec Rotork PLC 13/01/2014
Upgrades
Hold Buy 2 2,950.00 3,000.00 2,736.00 50 2

[apad] 19/12/2013 09:01

looks like ROR is in lock step with its peers in the current exuberance.
apad

[apad] 16/12/2013 12:57

Yup.
Also, the industries that they supply might cut back on expenditure if oil supplies from the Middle East increase. However, I think the Gulf states will throttle back to maintain the price.
But the cost of extraction of heavy oil or difficult to access oil and gas is not properly factored into the current enthusiasm for the technology.
All of the suppliers are falling back, e.g. WEIR, so whether my timing matches sentiment is a moot point.
But, I think these arguments act against RDSB (buying back shares!). So the rule of Shell - buy at £17 sell at £21 - has been invoked.
apad

[broadwood] 16/12/2013 12:37

Possibly the recent strength of the £ hasn't helped but quality stocks like this will ensure a happy new year.

[redartbmud] 16/12/2013 12:28

Apad

Good luck, I am thinking of adding at these levels, but it would be a decision to raise my portfolio weighting over the norm.

I subscribed to IC years ago, but have long since ditched it!


red

[apad] 16/12/2013 11:39

swapped some rdsb for some ror @ £26, red.
Hey ho.
apad

[apad] 16/12/2013 11:04

IC sell rec. based on rating in Aug. is maybe a drag on the share price
apad

[redartbmud] 16/12/2013 08:10

APAD

Why let the detail get in the way of a good story.

Thanks.

red

[apad] 16/12/2013 08:09

www.playitback.org/details.aspx?v=336

[apad] 16/12/2013 08:05

Interesting how we discuss this company with no mention of peristaltic pumps :-)

Love "play dough"

apad

[redartbmud] 15/12/2013 21:39

nfs

No problems. All the best.

red

[nfs] 15/12/2013 21:08

Redartbmud
Thanks for the responses
It's a wonderful company and something for the long term that allows one to sleep at night

[redartbmud] 15/12/2013 20:57

nfs

I am not trying to ramp the share in any way, but below is a comment from Barclays on Ror as one of their tips for 2014.
Barclays - treat it with a pinch of salt??

Rotork, the maker of valves for the oil industry, is expected to continue its decade-long run of steady sales growth.

Analysts Nick Webster and Richard Paige have placed a target price of £33.15 on the shares, expecting it to continue its average sales growth of 11%, which it has delivered for the past 10 years compared to a sector average of 4%.

'It is an asset-light, highly cash-generative business,' said the analysts. 'It has distributed nearly £300 million in dividends by means of a regular core and additional special dividend payments. We believe this justified Rotork's premium valuation.'

Barclays added that Rotork is a dominant player in an industry with high barriers to entry, and there is a 'low emerging market threat', where it has a significant share of the market.

'Rotork's premium valuation is justified by its market leading positions, record of superior earnings growth and strong cash generation.'

Rotork dropped 0.2% to £26.79 in Tuesday trade.

regards
red

[redartbmud] 15/12/2013 20:38

nfs

Yes you are correct - as of today, however the year high is £30.97p.
I don't see a material difference in performance between the two dates.

It depends on what you are looking for.
Should you want a longer term investment in a quality company,where there is probably ongoing growth, the current weakness could be an entry point. It just depends on how you see the picture.
Alternatively, it could present a short term opportunity to make a quick turn.
It really depends on your perception of markets, sectors and individual shares within those sectors.
Undoubtedly there will be stocks that outperform others, and Ror in particular. I have limited time to carry out the in depth research to find them.

Currently I see market volatility with a probable move to the downside, so chances are you could pick up some Ror more cheaply over the next few trading days or into January. Will we see a New Year rally?
As they say "You pay your money and take your chance".

For me Ror forms a part of a longer term portfolio holding, so I am approaching the share on that basis.

Calling the bottom is a difficult game. On occasion I have achieved that goal with my "play dough" where I am prepared to duck in and out of shares for a short term trade - sometimes more successfully than others.

red

[nfs] 15/12/2013 17:27

Share price has as of today made no progress at all in the last 12 months

[redartbmud] 15/12/2013 16:05

APAD

I agree totally with your assessment on the subject of valation, so the share price is always likely to over-react on both the upside or downside on any general market correction or sector re-rating.
I do believe that the better quality companies rightfully command a premium over the mediocre/dross. Ror is in the quality category IMHO.
Using Yahoo finance as a reference, the volumes regularly traded are not great, so anything outside the norm is again a factor that can cause over-compensation.
I have watched intra-day movements over the last few weeks, that have thrown up swings of 40/50/60p and more, and for no apparent reason. It is good when you pick up quality on an off day, but in my case it is usually more by luck than judgement.

Good hunting if you proceed, but caution is the name of the game at present, in these fickle markets.

red

[apad] 15/12/2013 12:48

Ta red,
I agree with your view, and it has been that way for a long time - very sound management. Very sound finances. I haven't properly dissected the bolt-ons so I will look again at the accounts with your comments in mind.

However, the valuation figures for 2012.5 that I calculate are a PER of 24. Price to cash flow of 24 and a price to Owner's Earnings of 29.

Lots of ways to calculate these sorts of figures.

However, in terms of valuation these figures look rich, particularly the price to cash flow, and any downturn will affect such highly valued shares.

In principle I am increasing speculative growth share (CLIN or whathaveyou) if I generate small amounts of cash and boring (PNN or whathaveyou) if I generate larger sums. However, ROR has slipped to under 4% of my portfolio and I might push it back into the 4/5% band.

FWIW

apad

[redartbmud] 15/12/2013 11:12

Apad

I have scanned financials on Hargreaves Lansdown.
In each of the last 5 years the company has had a significant cash balance, with minimal borrowings.
Intangibles have risen as a result of significant purchses of bolt on businesses.
As it grows, I would expect there to be a greater requirement for working capital.
The half year report in August disclosed an adjusted operating margin of 25.4%, up by 3bps.

It would appear that the company is operating a conservative policy with regard to it's cash balances. It only buys what it can afford. Businesses that expand the product range and therefore provide a better offering to customers. They are working on a closer relationship wjth improved technology tieing in the added value of ongoing maintenance.

The figures serve to confirm the strength of the business.

As ever DYOR.

red

[redartbmud] 15/12/2013 10:46

Apad

I will look more closely at the figures, but the IMS in November stated:

Financial position

The Group continues to be highly cash generative and maintains a strong balance sheet with a high return on capital employed. Net cash balances at 27 October 2013 were £33.3m.

red

[apad] 14/12/2013 18:14

red
Bit concerned about cash flow. Do you have a view?
21 vacancies.
Technology to kill for.
Could have bought at this price a year ago.
Thinking of topping up.
Need a reason not too!
apad