Somero Enterprise Share Discussion Threads

[breaktwister] 06/7/2016 13:08

Just noticed the volume leading to this drop - 19k shares!! Topped up.

[breaktwister] 06/7/2016 13:06

Are we due a trading update here? I see one on 7th July last year. Dropping alongwith all other equities might be a good time to buy in. Surely the US economy is still strong, China still growing, albeit more slowly than in the past. It seems to me the market is beginning to price in the risk of another global financial meltdown.

[rivaldo] 04/7/2016 07:39

Nice mention for SOM in this portfolio review:



"Somero emerged virtually unscathed from the Brexit correction. This is logical, as the business operates mainly in the USA. It isn’t heavily exposed to the UK, or indeed Europe."

[grahamburn] 23/6/2016 14:07

Though, of course, the dividends are paid in dollars.

[fugwit] 23/6/2016 14:06

You are of course quite right David.

[davidosh] 23/6/2016 13:53

The majority of Someros earnings are overseas and so surely any move downward for the pound would be positive when converting profits into sterling ?

[fugwit] 23/6/2016 13:05

Let's hope so, I attended the AGM where the conversation was positive so am expecting more of the same. Providing we don't end up with sterling in the pan post todays vote I am pencilling in 16p eps for FY16 as per brokers FC. Given balance sheet strength and quality of earnings I would like to see the PE rise to 15 giving a target price of £2.40/share.

[rivaldo] 23/6/2016 09:57

Indeed fugwit.

Hopefully we'll get a further half-year trading update next month on top of the positive AGM trading update (this year's AGM was almost a month later than last year).

I noticed that Ashtead's results a week or so ago were very well received, primarily because of the performance and outlook in their non-residential business in the USA. This should bode well for SOM.

[fugwit] 23/6/2016 08:46

To put that voracious demand for concrete in context, the CEO has mentioned a couple of times that China uses 30 times the amount of concrete that the US does per year.

[rivaldo] 09/6/2016 10:17

Shares Mag are positive on SOM today, noting that "in a meeting on the day of the announcement" the CEO said China is the place where SOM have the biggest upside due to its voracious demand for concrete.

The article concludes that SOM's shares are "appealing" at 160p.

[rackers1] 07/6/2016 14:32

post 648 - not the most intelligent of posts.

[carcosa] 07/6/2016 13:40

IC:
"In other words, segments that represent 85 per cent of the business are firing on all cylinders. They are likely to continue to do so given that European markets are showing a steady recovery from their recessionary low point in 2010-11, and in the US there are lengthy project backlogs for customers in the non-residential construction market that extend well into 2016."

However from the latest info I could see:

Somero said "...positive trading in the Company's core US, European and Chinese markets. In the Latin America, Southeast Asia, Korea and Middle East territories, while year-to-date trading is somewhat below previous year levels..."

From their most recent data, revenues were geographically split thus:

$m %
North America 49.2 70.1%
Europe 5.7 8.1%
Korea 1 1.4% X
Latin America 2 2.8% X
India 0.6 0.9% X?
Australia 1 1.4% X?
Southeast Asia 1.3 1.9% X
China 6.1 8.7%
Middle East 2.7 3.8% X
Scandinavia 0.5 0.7%
Russia 0.1 0.1%
TOTAL 70.2 11.7%

Assuming my 'X'x are the areas which are underperforming. It's not a 'major' blow albeit disappointing compared to their expectation of 40% growth, but unless I've made an error somewhere the iC should have said "88%". Nit picking, I know ;-)

[davidosh] 07/6/2016 13:27

There were five at the Agm this year which is 150% up on last year.

Apparently SOM has just been re tipped in the IC by Simon T too

[rivaldo] 07/6/2016 10:05

Canaccord reiterate their Buy and 190p target:

[rivaldo] 07/6/2016 06:56

Paul Scott continues to hold SOM - he liked yesterday's statement and has this to say on the current valuation:

http ://www.stockopedia.com/content/small-cap-value-report-6-jun-2016-som-srt-amo-swl-134306/

Extract:

"Valuation - the figures look extremely attractive - a low PER, together with a strong balance sheet (with net cash), and very high quality scores too. No wonder the StockRank of 97 is so high. This looks remarkably good value to me."

[davidosh] 06/6/2016 13:54

Just a reminder that it is the AGM tomorrow at 11am if any of you want to attend and meet the excellent management team.

[davebowler] 06/6/2016 12:08

Finncap;
The group has announced an encouraging trading update ahead of its AGM highlighting that overall it is trading “comfortably in line” with expectations. No change to our forecasts, but clearly confidence in current forecasts becomes more assured. Today’s announcement should help provide greater investor confidence and underwrites our enthusiasm for this well-run growth stock. We reiterate our 185p price target and remain enthusiastic supporters.

[rivaldo] 06/6/2016 12:03

Finncap retains its 185p target today:



Re post 648, SOM has actually gone up by 36p in 2 years from 122p. Add in the dividends and you're looking at around 45p - that's a 37% return in 2 years.

I'll take that all day long :o))

[pj 1] 06/6/2016 11:48

But then again it has gone up x16 in 4.5 years.

No position (unfortunately)

[hvs1] 06/6/2016 11:37

in just over two years this has gone up by ONLY 30p, what a load of old tosh, lol

[adamb1978] 06/6/2016 10:16

Agree with the comments above. Nice reassuring trading update and thing continuing to tick along. This doesn't feel like a company which will suddenly ramp but I do think it can comfortably grow earnings consistently in the 10% - 15% range given its market positions, ample scope for growth etc

Looking forwards two years, its therefore not remotely aggressive to think that earnings could be say 25% higher and this to have re-rated from 9x to 12x as a result of delivering on that growth. Compound those two (1.25 * 1.33 = 1.663) and you get a share price which could be two-thirds up in a couple years. And that really isnt the bull case

[chickenrun1] 06/6/2016 08:39

A very nice update today - comfortable holding.