Smiths Share Discussion Threads

[james93] 14/6/2007 14:40

Hmm, tried to trade some shares with my online account at Hargreaves Lansdown and got the telephone dealer only message,stock not tradeable online. Emailed to see what was going on and was told a corperate action was taking place including consolidation and return of capital.

[ringer12] 13/6/2007 21:36

Thanks for the info.Bromos. In that event looks like it will be worth holding on to the shares! Do you know who the main shareholders are?

[james93] 13/6/2007 06:08

Thanks for the info Bromos. I shall have a google.

[bromos] 12/6/2007 10:07

James93 and Ringer
FT suggests today "Talk that an activist investor is amassing a stake in Smiths Group"
and Daily Express: "Smiths Group takes off on hopes of a break-up"
This could explain the rise in part at least.

[james93] 12/6/2007 08:10

I don't know. Up 3% at one point which is unusual for SMIN.

[ringer12] 11/6/2007 13:49

Agreed!. Why the uptick today?

[james93] 11/6/2007 09:24

Not a very active board this one.

[james93] 04/6/2007 10:39

Simon Cawkwell ( Evil Knievil) has gone long of SMIN hinting at possible corperate activity.

[thamestrader] 17/5/2007 14:13

Wonder if we can clear 1100 today/this week.
Unknown territory/blue sky after that.


EDIT - not strictly true, hit 1139 back in Jan - that's where the blue sky starts

[maiseymouse] 04/5/2007 10:12

not particularly inspiring

[the_profit] 31/1/2007 11:56

trading slightly above expectations but share price is down. perverse

[plattsy] 27/1/2007 10:13

sell signal on 24th Jan kicked in at 1071 - went short at this price - looking for 1035p target.

[john3419] 26/1/2007 13:40

At this rate we'll soon be back at £10?????

[hobby2] 19/1/2007 23:12

....FT 19/01/07

Invensys, the controls and automation group, climbed 4.9 per cent to 291p on the view that several of its divisions could be attractive to the re-shaped Smiths Group......

[john3419] 18/1/2007 09:27

Me neither - and still they're dropping. Would have been more profitaable to sell at 1120p.

[broadwood] 16/1/2007 15:05

Everyone seems to think the two remaining businesses will now be sitting ducks - but in any case they are both seeing substantial growth and good margins.

[a0148009] 16/1/2007 14:13

There is a breakup value by division estimates by ABN Amro on the front page of todays Business Telegraph as follows:- Speciality Engineering £3.2bn - Medical 3.0bn - Detection - £2.2bn and Aerospace £2.44bn ($4.8bn before expenses). Say £0.8bn expenses ie £200m a shot x 4 if disposals staggered. Less debt say £1.0bn
equals £9.04bn, shares in issue 570m gives £15.86 per share, what have I missed is there more debt somewhere. See how these guys get such huge bonuses, expenses on Aerospace sale £190m nearly 7.78%.

[thamestrader] 16/1/2007 14:12

It's a slightly smaller band than it was, I sold out at 1140p.

Why?
(a) I reckon all this good news is "in the price" for now.
(b) I also reckon price may drift in coming days
(c) 1140 in the hand is worth 1200 in the bush
(d) I couldn't resist bagging a healthy profit

[a0148009] 15/1/2007 14:11

A34 - thanks you very much, very helpful summary.

CNBC were suggesting SMIN had underperformed the market substantially over the past year and were under pressure to return value to shareholders. The Company said the deals are earnings accretive, improves existing average margins by 1.3%, capital efficient,cash generative, progressive divi policy. Company say they can finance bolt-on acquisition between £400 - 500m without going to shareholders and GE are an excellent partner in the Detection JV.

Good to meet another Infotrade migrant not many of us left.

[broadwood] 15/1/2007 11:32

A34 - thanks for that.

Very encouraging summary.

Share price seems to be recovering towards its highs for today again.

[a3477681] 15/1/2007 10:59

Thought this might be of interest here. I hold a few of these and think I will hold.


SMITHS GROUP (SMIN.L) - BUY - PRICE/TARGET : 985p/1171p - DISPOSAL OF AEROSPACE TO GE
Substantial value realisation

EVO TAKE - Today's announcement is the catalyst to unlocking the substantial value within the Smiths portfolio. On the price GE are paying for aerospace, 15.6x EBIT 7/07, our sum of the parts comes in at 1171p and we are upping our price target to this level from 1058p.

There are two factors to consider - 1) the balance of Smiths which also includes the detection jv with GE will be doing EBIT of GBP419m on sales of GBP2470m, a margin of 17%, and underlying eps growth of at least 10%. On this basis, the stock can trade at 1170p plus which puts it on 16x.

2) the knock on effect for the aerospace and capital goods sectors in terms of these global niche value added stocks being vulnerable to consolidation - Cobham and Meggitt are the obvious stand outs but note also the value implications for GKN's aerospace business and Melrose as it sells McKechnie Aerospace.

DETAILS - Smiths is selling its aerospace business to GE for $4.8bn which equates to £2.25bn after expenses.

This is a huge price and compares to the £1.5bn we had in a fair value and we were already buyers.

The 15.6x ebit multiple on 7/07 compares to Meggitt on 10.8x and Cobham on 12x.

It also removes the area of greatest contention within the portfolio given the capitalised R&D debate, issues surrounding the US tanker programme, cost issues on 787, the broader theme of OE pressure on the supply chain etc.

Some might argue that it is also selling some of the potential recovery but we believe that greater focus on medical, detection and engineering which can generate 10% eps + can stand the 16x multiple that today's announcement implies post the return.

Smiths is going to return £2.1bn in the form of B shares which equates to 371p a share and the continuing dividend policy is described as progressive with cover at 1.8x. EPS rises to 77.7p from 71.8p for 7/08 and with the new dividend policy, the dividend will rise into the early 40s from the current 36.3p we are forecasting. Smiths is going to consolidate the the number of shares by the same percentage so reduce the number in issue by 37% to take it to 356m from 565m.

VALUATION AND RECOMMENDATION - In terms of our sum of the parts, we now work through 1171p. This in reality understates the improvement in the quality of detection post today's announcement of the 64/36 Smiths GE jv and does not include the £150m benefit to debt. This could add as much as 70p to our target - the net debt drop adding 45p and detection 25p. 15x 7/08 for the balance of Smiths is not unreasonable and we maintain our buy recommendation

[broadwood] 15/1/2007 09:14

The Market seems to love the argument - so far.

Watch and wait, I think.

[a0148009] 15/1/2007 09:13

I will wait and listen to the presentation at 9.30am and reaction to the press conference at 11.30am the deal on Detection with GE looks interesting and of course this is a well managed company with three good legs, and disposal might put other parts or all of the business in play.