Tclarke Share Discussion Threads

[sspurt] 06/5/2016 09:45

Jeez..400 shares traded so far. I hope the boyz are working on that stock overhang.

[cc2014] 06/5/2016 07:58

Usual very cautious and reserved statement from directors. Everything on track. Turnover up, margins ups. Hope to see this through 90 today

[ivancampo] 06/5/2016 07:08

Could you get a better update?

[cc2014] 03/5/2016 13:30

All a bit frustrating. Winterfloods clearly have a few to shift yet. Interserve going well today but no pick up here.

[gargoyle2] 29/4/2016 14:04

12k at 85, 15k at 87.5

[ivancampo] 29/4/2016 13:40

I've just added 3k more. Is the order book showing many on offer, CC2014?

[cc2014] 29/4/2016 12:54

Buyers still nibbling away but no attack on the volume at 85 on the order book yet. Might have to wait until next week for this.

[cc2014] 28/4/2016 13:19

I would suggest it worthwhile doing some benchmarking of director pay in this sector (remember it is fairly specialised - we are talking only 5-6 companies of this size and capability in M&E). I know one of the competitors directors takes out over £2m in a good year and they are half the size of CTO.

I suspect this is part of the reason Danny Robson left. The company are probably simply not able to offer him what he can generate himself by running a company with a smallish turnover of say £10-15m. Of course why he would want to work at all is worth considering.

Trading statement next week. 6th May from memory. I don't expect the share price to hang around here if the continued pattern of the directors cautious optimism and over-delivery of such continues in that statement

[gargoyle2] 28/4/2016 11:51

profdoc, thanks for 'revealing' yourself! I haven't read your whole piece, but I do agree that the interests of the directors are not at all aligned with those of shareholders. The CEO is on a pretty tidy packet (package of GBP 300k, as far as I recall), with hardly any shares despite having been at the company for 20 years odd. having said that, I hold a fair few here and would be looking to add either here or lower.

[ramridge] 28/4/2016 10:18

Hi prof -
What you might have missed is that the company has moved into profit with net cash £6.7m, net debt free, positive OCF and FCF. Net cash is near 20% of market value.

If they manage to up their op. margin, operational gearing should kick in and flow straight into a more than proportionate increase in eps.
Current prospective PE is 10.5 . With increased margins, this could drop down well below 10.

All IMO

[profdoc] 28/4/2016 09:53

Thank you for giving my piece some attention, but I don't think I have that power.
I'm not that negative about the company! I just have a habit of looking for disconfirming evidence as well as confirming evidence.
I did finish the piece with
"Conclusion:
I’m not totally convinced by the sustainability of margins in the next recession. And I’m not convinced that the directors have aligned their interests with those of shareholders.
However, the shares are cheap relative to past earnings and relative to earnings in the forthcoming rise in commercial property activity.
So, I’ll be holding for 2-3 years yet, I expect."
CC2014: I'm always interested in hearing about what I might have missed. Could you elaborate please.
Glen

[ramridge] 28/4/2016 09:36

Hi Guys -
I am new to this forum - bought a small holding yesterday. Key attraction is the great entry point at the moment and generally good fundamentals.
The one negative to me ( and this was one of the points made by the good professor) is the wafer thin operating margin of 1.8%.
I did an analysis of this sector to see how their margin compares with others. Well, the weighted average for the sector is 4.9% (after throwing out some outliers). So they really need to write profitable business.
On balance good enough for at least a trade, if not longer term investment.
All IMO

[tuscan4] 28/4/2016 08:49

Don,t forget that broker coverage of clarke is virtually non existent so we have a major advantage when analysing these small companies. Even the house broker has little incentive to publicise the true situation. In the goodwill analysis in the accounts they breakdown sales forecasts for each region for the next three years and helpfully give a range of operating margins as well.if you run these numbers you get a range of outcomes and the central numbers show growth in Epson entirely in line with my other forecasts. This goodwill exercise of course may be garbage but I think this is a genuinely conservatively run company who encouragingly have no time for share price ramping.

[gargoyle2] 28/4/2016 07:18

tucan4,I'm not sure how you calculate your EPS figures, but they are way ahead of the numbers on stock-o-pedia(8p for 2016, 9.5p for 2017). Nobody will be happier than I if your numbers are right though!

[ivancampo] 27/4/2016 19:14

Someone who punts tip sheets via ADVFN? Calidad.

[gargoyle2] 27/4/2016 19:11

Excuse my ignorance.. who's Glen Arnold?

EDIT: Found him:

[cc2014] 27/4/2016 18:52

Hi - well as a long term holder I benefit when Glen Arnold tipped the share so I won't complain when he holds a different view.

When he tipped the share in November Glen was kind enough to share with me on a one off basis a copy of his newsletter/tipsheet/blog/report. I read it with interest.

A well constructed article but not quite complete. It lacked some attention to detail which detracted from what was overall a well constructed piece of work. A pity.

I'm happy - a chance to pick up a few more at a price I didn't think I would see again. I'll probably trade these on the rise and keep the profit in shares as I have plenty. I might change my mind and keep them.

[tuscan4] 27/4/2016 16:06

More to do ,I think, with Prof. Glen Arnolds negative comments this week. After singing CTO praises he is suddenly pointing to Directors pay, up quite sharply but he missed the point that Danny Robson had joined the board, and also concerns over the closure costs of the discontinued businesses. I didn't read his full report but on both these counts he is perhaps worrying too much. The A/C's give a very interesting forecast of margins/turnover growth for 2016/7/8 and beyond.
Extrapolating these numbers gives EPS of 15.7p/18.5p and 21.7p for the next three years. Conservative middle of the range forecasts which could of couse be blown off course, however as Benjamin Graham always said look for a margin of safety in your investments and here I think we have it in spades.

[cc2014] 27/4/2016 12:52

Hmm - well it seems I was early in my purchase. Bought some more this morning on the pull-back from 90 as we are on the bottom of the uptrend line. It's unclear to me whether this is due to GDP figures or whether Winterfloods have a stack to shift.

[cc2014] 26/4/2016 13:05

I bought some more this morning on the pull-back from 90, partly as I think it's a great price, partly because there's a decent gap on the order book about Winterfloods sitting at 86, partly as the sector was strong yesterday and continued this morning and partly as the only way WNTS are sitting at 86 is if someone has sold some at 85 which isn't yet declared.

I wonder how many WNTS have to sell? I can't imagine anyone has dumped many shares against the trend at 85 unless it's Danny Robson. Even then I think the market will soak it up given a bit of time

[cc2014] 20/4/2016 13:15

Don't know about buying 50k shares as I'm fully invested at the moment but MM's are offering me 88.33 to sell 10k so the overhang can't be too large

[gargoyle2] 20/4/2016 09:36

There's an overhang here at the moment imo. Possible to buy 50k shares at 88.29p. (I didn't.) Could take a while to clear.

[tuscan4] 20/4/2016 08:29

Buying was surprisingly easy, admittedly over an extended period. As I said before there has been a steady drip of sellers who have been losing patience with the group for a couple of years. Miton are patient and can see the upside but when the margin news becomes crystal clear and the dividend climbs the Johnny come latelys will find it very difficult to acquire stock.

[coolen] 19/4/2016 23:10

Balance sheet has been a problem in terms of share rating for many decades.

Compare "Interest Paid" and/or "Financing Costs" with any apparent end-year cash surplus.

Save for that reservation, I too have been buying.

[cc2014] 19/4/2016 22:42

Good question. Hmm - an implied profit of £7.1m this year and £8.8m next year, which seems completely reasonable to me.

Alot more than 90p.

Looking at the chart when the results were publihsed for 2010 accounts they turned a profit of 7m on a turnover of £179m with a dividend of 8.5p. Share price went to 175p in the days after finals before the recession took it's toll and the sell-off continued.


So, given they need to strength the balance sheet a bit yet, the dividend will lag for a while, but the future prospects are improving profits rather than declining as in 2010 I would say 150p not unreasonable, with 200p the year after.

The thing is if it's this obvious, which I think it is, why is the price only 90p? - not that I'm complaining as I have a wheelbarrow full of stock at really good prices and I'm happy to be patient

btw - how did you manage to buy 750k of shares between you and your friends? I had a great deal of difficulty acquiring my shares without influencing the price and took me around 30-40 trades over a year or so.