Somero Enterprise Share Discussion Threads

[cfro] 09/9/2016 14:45

Yet another day of high volume.

[rivaldo] 09/9/2016 08:50

Cheers penpont, appreciated.

[rivaldo] 09/9/2016 07:30

Tipped in the IC - anyone got the full article please:



"Somero boosted by North American construction

This week's interim results for Somero Enterprises (SOM) feature the sort of numbers investors dream about. As prefaced in a July trading update, almost every key measure of financial health was up in the first half of 2016, as the specialist in laser-guided concrete levelling equipment benefited from a surge in demand for its smaller and medium-sized product line and excellent conditions in its core North American market, which increased its share of total sales from 68 to 75 per cent."

[rivaldo] 08/9/2016 12:11

Shares Mag today remain buyers of SOM in their "Plays Update" section:

"SOMERO ENTERPRISES (SOM:AIM)

OUR POSITIVE CALL on US specialist machinery manufacturer Somero Enterprises (SOM:AIM) continues to pay off as it delivers a better than expected 32% increase in the dividend alongside interim results (6 Sep).

The numbers show a 26% increase in pre-tax profit to $10.4 million with robust
demand from the US (its main market), Europe and China. As a reminder Somero manufactures patented laser-guided equipment which automates the spreading and levelling of concrete for commercial flooring.

As such it can benefit from the requirement for the almost perfectly flat concrete floors required in online retailers’ warehousing facilities.

Sales growth has been driven by new product lines – mid-line and small-line machines and 3D profiler systems which support slope and elevation changes for the likes of service ramps and loading dock areas.

House broker FinnCap comments:
‘The results place the group comfortably on track to achieve current forecasts,
recently upgraded in July, with strong US trading conditions providing good momentum for the second half.’

Based on its forecasts the company trades on an undemanding 2017 price to earnings ratio of 9.2 times.

SHARES SAYS: 
We see no reason to shift from our positive stance. FinnCap has a price target of 205p."

[cfro] 07/9/2016 16:00

Fairly large volume again today.

[rivaldo] 07/9/2016 13:22

AHT reported excellent results this morning - in particular from Sunbelt, of most relevance to SOM.

Importantly, the outlook was "strong" with much confidence for the future.

[rivaldo] 07/9/2016 11:14

SOM tipped as a Buy on T.M.F:



"Is Somero still cheap?

Shares in equipment firm Somero Enterprises have risen by 40% so far this year. The firm’s operating profit rose by 24% to $10.3m during the first half, lifting adjusted earnings by 30% to $0.13 per share.

Somero makes equipment that’s used to produce perfectly flat concrete floors for warehouses and distribution centres. A flat floor is essential for the very high racking that’s used in modern ‘big box’ warehouses.

Somero’s growth is heavily linked to the construction market, principally in the US, where the business is based. Sales in North America rose by 24% to $29.8m during the first half, accounting for 75% of the group’s total sales.

Somero also operates in a number of other territories, but the company’s big hope for long-term growth is China. Flat floors of the kind produced by Somero equipment are relatively new in China, and the group’s market share is low. The potential for expansion into the Chinese market is significant, in my opinion.

Somero has no debt and net cash of $11m. The shares trade on 9 times forecast earnings and offer a well-covered forward dividend yield of about 3.6%.

I believe that Somero remains a buy, as long as investors keep a close eye on the health of the US property market."

[rivaldo] 06/9/2016 18:49

Exactly...as we said earlier in fact :o))

Cheers hastings, nice summary. Here's a direct link - worth reading for the interview with the CEO, particularly the comments about demand booked in for a year ahead in the USA:

[eggbaconandbubble] 06/9/2016 17:13

Thanks hpcg. Very feasible. Good comment.

[hpcg] 06/9/2016 16:56

Good piece from Paul Scott in his small company report about the reality of investing sizable institutional money in small caps and actually applies to any investment which is a large proportion of the issue. One has to sell into liquidity. SOM is not very liquid so one has to unload at any opportunity.

[hastings] 06/9/2016 16:55

Thoughts may be of interest.

hxxp://www.cambridge-news.co.uk/concrete-evidence-that-somero-is-a-good-bet-private-punter/story-29690172-detail/story.html

[eggbaconandbubble] 06/9/2016 16:45

That is TODAY'S news!!!!!

[rivaldo] 06/9/2016 16:25

Eggs, we've already answered your very same point in prior posts 721 and before. There's no need to repeat yourself again!

[amencorner] 06/9/2016 16:25

Yes Blackrock are a law to themselves but still they have made good money.

[eggbaconandbubble] 06/9/2016 16:13

Blackrock appear to have dumped over 600,000. Seems strange thing to do.

[interceptor2] 06/9/2016 15:27

Seems to have been a healthy increase in buying since 13:00, and some larger transactions today.

77% of revenue in H1 was from North America, so agree that is America continue to do well then so will Somero, yet they are also making more positive comments about other regions now.

[flagon] 06/9/2016 15:23

Found this in the Investors Chronicle for today ...

Somero Enteprises (SOM) this morning posted the kind of results investors dream about. Almost every key metric was up in the six months to June, including revenue, operating income, earnings per share, net cash flow and investment. At the same time, management found sufficient free cash to reward shareholders with a 2.5¢ interim dividend, up nearly a third on last year’s payout. Our profitable recommendation is under review.

[rivaldo] 06/9/2016 15:16

Paul Scott holds and is very happy with SOM:

http ://www.stockopedia.com/content/small-cap-value-report-6-sep-2016-som-itq-149475/

Extract:

"Valuation - broker consensus is 25 US cents for EPS this year, or 18.7p.

So at 169p per share, the PER is only 9.0 for this year.

That seems a remarkably pessimistic valuation.

Balance sheet - this is in terrific shape, with a very strong working capital position - the current ratio is excellent, at 3.27 - for me, anything over 1.5 is strong.

There is $12.1m in cash sitting on the balance sheet, less a small mortgage of about $1m.

So the company is in a smashing position overall.

My opinion - this is a core long-term holding of mine, so today's results confirm my positive view of the company, and a very low valuation.

I think the market was traumatised by Somero lurching into losses in the GFC in 2008. But so did loads of companies. The entire banking system collapsed, for goodness sake. Personally I think it's extremely unlikely that such a severe downturn is likely next time we have a recession. Plus SOM is now in very much stronger financial shape than back then in 2008, so it should be able to withstand anything the economy can throw at it.

Essentially this share is a bet on the US economy. If you think it's going into recession, then SOM shares are probably best avoided. If you don't (and you turn out to be right), then this share could be a bargain.

Overall, I really like it. This company is the global specialist in a niche market, and given that concrete sets in about an hour, then support & service will always count for a great deal in this sector. Am tempted to buy more actually."

[grahamburn] 06/9/2016 14:33

In Investors Chronicle round up this morning, they emphasise that with every metric showing movement in the right direction "what's not to like".

[rivaldo] 06/9/2016 13:36

For the chartists amongst you this might be encouraging/meaningful:



"Somero Enterprises, Inc. breached its 50 day moving average in a Bullish Manner : SOM-GB : September 6, 2016

Indicator Signal

Closing Price above/below 50 Day Moving Average Bullish
Closing Price above/below 200 Day Moving Average Bullish
50 Day Moving Average above/below 200 Day Moving Average Bullish
RSI Reading Level (<30 or >70) Fair Value
MACD Compared to 9D EMA Signal Line Bullish"

[adamb1978] 06/9/2016 12:55

Forecasts of 6p / 7 cents dividend for this year look too low as well. 9 cents feels more realistic so around a 4% yield

[adamb1978] 06/9/2016 12:54

Motley Fool is showing 18.47p EPS for FY16 which based on 9p in H1 (12.6 cents converted at 1.4:1) looks achievable and slightly conservative. As others have said, this should be trading a good bit above 200p. I wonder whether they'll consider moving to a US listing if the multiple doesn't become fairer?

[rivaldo] 06/9/2016 09:41

860,000 shares traded already - looks like there's some institutional trading going on, perhaps removing sellers (Artemis etc) from the picture and leaving a clearer run from here.

[mfhmfh] 06/9/2016 08:54

now Somero need a website fit for 2016 to match the company's results.