Smiths Share Discussion Threads

[shuisky] 24/1/2006 13:33

'Morgan Stanley cut its recommendation on SMIN saying European industrial companies are overvalued and will face a headwind this year.'

Whilst I appreciate that Morgan Stanley probably issue far more detailed research on SMIN, I can't accept these comments as a valid critique.

If you look at SMIN industry segments in turn....

Aerospace-An industry set for strong growth over the next few years

Medical-Not a sector tied to the business cycle

Detection- Similarly, not a sector tied to the business cycle. In fact it's likely to experience continued growth in demand as corporations, ports & borders step up security arrangements.

Speciality engineering-Within which they have heavy exposure to Oil & Gas CapEx, and aerospace and defence

Frankly, all of their industry segments look set fo growth, and the AGM statement confirmed as such...

'Three of the divisions are expected to show good growth in the first half of
the year. In Aerospace, which has recently secured strong positions on new
aircraft programmes, growth will be concentrated in the second half, due to the
timing of development expenditure charged to profit.'

It's so easy to say 'the business cycle is past it's peak so sell of the engineering sector coz it tends to be cyclical'. I have sympathies with such an aproach, but when you break down what industries SMIN is actually exposed it's nowhere near as cyclical, as things like,say Enodis or FKI are.

And you get it on 15 times forward earnings with a peg of 15/18=.81. It's on 13.4 times 07 forecast earnings. Rising raw material costs may well pressure margins, but they will have to increase marginally from the high levels they were at in 05 in order to have a comparative effect. I happen to think they will ease.

All in all, ignore the sentiment. This is a good core holding.

[gateside] 20/1/2006 16:25

Thankfully still just watching at the moment. Could go lower further with pressure on margins due to higher raw materials.

[gateside] 19/1/2006 11:18

Thanks, this appears to be one of those excellent companies in the FTSE100 that seems to get ignored, regardless of some excellent results and corresponding excellent share graph over the last couple of years.

On 12th January CSFB raised Smiths Group price target to 1,125p from 1,065p. CSFB has an outperform rating.

However, yesterday Morgan Stanley cut its recommendation on SMIN saying European industrial companies are overvalued and will face a headwind this year.

However, I like acquisitions the company have made, which i feel will aid growth for the longer term.

[roodboy] 18/1/2006 09:18

nice new thread - where do you see the share price going now gateside?

[gateside] 17/1/2006 11:12

Smiths Group is a specialist engineer producing high-technology devices for a range of applications. It operates in four core divisions: detection (scanners and detectors for security use), medical, aerospace and speciality engineering.

Smiths pursues a strategy of bolt-on acquisition, spending £595m on acquisitions during the last year. The majority of this cash was taken by the £499m purchase of medical devices company Medex, a move which has taken Smiths into the big league of medical manufacture's in the US.

In the year to 31 July 2005 Smiths' sales rose by 13% to just over £3bn, reflecting solid growth in each of the divisions. In aerospace – by far the largest division, accounting for over a third of sales – revenues rose 15%, bolstered by higher levels of defence expenditure. The detection and medical divisions both enjoyed a 16% rise in sales, while speciality engineering grew by 7%.

Overall, Smiths' underlying earnings rose by 18% to £413m, with earnings per share also up 18% to 54.3p. Levels of debt are much higher this year - £931m as opposed to £273m – largely due to the Medex purchase.

The shares trade on 17 times underlying earnings and yield 3.1%.

Strong positions in growing specialist markets offer Smiths good opportunities for growth. With the management committed to increasing the top-line and watching costs, earnings improvement look set to continue.

[gateside] 17/1/2006 11:05

Smiths Group has five divisions - Smiths Detection, Smiths Medical, John Crane, Smiths Interconnect and Flex-Tek. They are focused on the threat & contraband detection, medical devices, energy, communications and engineered components markets worldwide. Our customers range from governments and their agencies, to hospitals, petrochemical companies and equipment manufacturers and service providers in various sectors around the world.

[penycae] 09/1/2006 11:42

Due a rise soon?

[bargain] 23/12/2005 12:59

Closed for Xmas at 1033.5p mid.

Happy Christmas guys and a very merry New Year ...

[widgee] 15/12/2005 11:26

might be a BID!!!!!!!!!!!!!!!! MKS flew for me, now this. Its a Kelly Bronze Turkey for the family this Xmas

[cambium] 15/12/2005 10:55

what a corkin chart

[enami] 15/12/2005 10:43

Sold some at 1061, does look a bit overbought. 1110 target for the rest.

[abcd1234] 15/12/2005 10:42

Hmmm.... interesting spike.....
just broker note, like last time ...or soemthing else...any ideas??

[roodboy] 15/12/2005 09:57

i havent looked in over here for a while as there was never anyone here to talk to - nice to see a bit of interest in the break through £10 - my target has been reached but i see no reason to sell any at the moment but am now watching closely to see how far this can go

Smiths are finally seeing the benefits of their complete reorganisation a couple of years back and everything looking pretty healthy going forward

[john3419] 14/12/2005 20:05

But what's caused this rise to £10+, and how much further can it go?
I've been in since £6.50

[bargain] 14/12/2005 14:14

roodboy, £10 it is ...

[widgee] 12/12/2005 15:37

And now for the breakout

[roodboy] 05/10/2005 09:15

well done mate - both long and short players making money here - everyones happy!

[eastbourne1982] 04/10/2005 10:50

Hi there

Closed it on results day at £9.25 thus taking a decent short term profit, looking quite strong for your £10 mark in the near future. Good one to trade this, all the best.

[roodboy] 03/10/2005 10:08

i hope you closed that short mate - this one is going to £10

[tibrahim] 25/9/2005 19:07

Broker recommendations
CSFB has issued an Equity Strategy Review in which they have upgraded Russia to overweight.
The broker has outperform on Man Group (LSE: EMG.L - news) (2000p target price), Johnson Matthey (LSE: JMAT.L - news) (raising the target price to 1250p from 1145p) and Smiths Group (LSE: SMIN.L - news) (lifting the target price to 1065p from 1030p).
CSFB has neutral on Yule Catto (raising the target to 255p from 240p).

[eastbourne1982] 20/9/2005 10:08

According to plan thus far.

[eastbourne1982] 12/9/2005 13:29

Short today @ £9.545p, target £9.