Titon Share Discussion Threads

[profdoc] 20/7/2016 17:23

Someuwin,

I have asked for much more care to be take in using extracts from my writing for marketing purposes by ADVFN. I've also asked that everyone who received the first email now get a second with an apology and the correct time period. If this does not get to you please let me know.
I'm sorry about this. (I used to write by Newsletters on my own website for free, simply setting out reasons for buying and selling as well as other things such as summaries of academic papers on investing. ADVFN approached me in 2014 to place them there. They seem to be taking marketing initiatives without informing me. I hope my admonishment makes them think a little more before posting. I feel my credibility has been diminished by this)
Glen

[profdoc] 20/7/2016 17:07

I'm sorry,

I had no idea that message had been sent out. Whoever sent it clearly missed the "2013". I'll write to them immediately and tell them to stop it.
Glen

[profdoc] 20/7/2016 13:03

I'd like to add, for the sake of balance, that I have failures as well.
Also, I can put here my 2013 writing on Titon (why I bought back then) if it would help anyone.
Glen

[profdoc] 20/7/2016 12:25

Ah, that was based on something written by me - but I did not write that. I had no idea that it was sent out unsolicited. I'm sorry if it annoys - I know I get annoyed by unsolicited stuff. For those who are interested, here is the full text of that Newsletter (posted 4th May 2016). Glen


Titon (LSE:TON) has been a very good share for me. In September 2013 I purchased at 37.9p. I sold all my holdings last week for 106p. Together with dividends (6.5p), that makes Titon almost a 3-bagger (a 197% increase, to be more precise).

I’ve chosen to sell this particular share because I’m concerned that its performance over the next housing cycle will not be as great as recent operating results suggest.

As I pointed out in the 22nd and 23rd Feb 2016 Newsletters, the company seems to lack pricing power. It strategic position in terms of Porter’s Five Forces, and in terms of not possessing an extraordinary resource that allows it to out-compete rivals, concerns me greatly.

It has three strategic business units:

Hardware in UK/Europe

For its simple window vents, handles and other metal/plastic components it faces intense rivalry, giving customers considerable power. Entry to the industry is reasonably easy. The low profits/losses in this area through the recession indicate the low level of pricing power. While the few years ahead might be good for sales as the housing market recovers, the next downturn could bring price-cutting to gain volume, yet again.

Korean hardware

It currently has few rivals in Korea due to first-mover advantage. Consequently it has been making very good profits here (around £1m after tax). However, its simple window vents are not that difficult to copy or substitute. I expect one day it will find it has to compete more on price because I do not observe any extraordinary resource, allowing it to charge significantly above cost on a sustainable basis.

Mechanical ventilation and heat recovery

Whole house mechanical ventilation with heat recovery is a more sophisticated technology than window vents and sales have been rising significantly. But it is not really cutting-edge, with barriers to entry caused by special knowledge held only within this company. Indeed, I was wandering around the House Builders and Renovators show in Birmingham a couple of weeks ago and found lots of competitors in MVHR.

Another reason for selling

I’m a bit miffed that the directors did not respond to my strategic analysis. When I toured the factory with them last month the CEO acknowledged receipt of the analysis, but made it plain he did not wish to comment on it. The Chairman said he had heard of it, but had not read it. Why the CEO chose not to discuss it further with boardroom colleagues, or with me, I do not know. Could it have something to do with the expensive “research̶1; on the company’s prospects they commissioned to promote the firm to investors? They are clearly not in the mood to hear less than bullish analysis.

It could be a mistake to sell so early
I could be wrong. Perhaps this company does have a way of sustaining high rates of return on capital employed through the cycle. But given the lack of evidence to support this view I cannot be sure enough of the share rising much from here. I’d rather use the money released for new Deep Value Shares.

I could be wrong in a different sense: it may not do well in the next downturn, but it could produce good returns before then as “a rising tide lifts all boats” - meaning that a rise in UK housing transactions over the next two years might raise the share price significantly as profits boom. I will therefore look foolish to many because I sold too early. I’ll have to take this on the chin.

I wish the company well, but the risks are now too high for me.

[spob] 28/6/2016 15:44

Doubled my holding here today

[value hound] 31/5/2016 11:00

I love the value metrics of this share; P/E around 7, yield around 3.5%, PTBV 0.9 - and the best part is it's still growing with a technology that seems to be misunderstood.

Put on a normal P/E of, let's say 12, add on current assets less all liabilities and you arrive at 237p per share - and it would STILL be valued far more reasonably than most other co.s I look at; crazily good value IMHO.

[mrx001] 16/5/2016 17:11

Very disappointing results, didn't like the look forward being full of bias to remaining in the EU.

[ben value] 13/5/2016 09:36

Hi Profdoc/Glen

What shares do you currently think have deep value. Do you ever visit Rainmaker's Value thread where we talk about Benjamin Graham type value investments?

regards

[profdoc] 12/5/2016 14:11

No position. I just analyse companies for investment and publish under Deep Value Investing on ADVFN. I shared my strategic analysis with them directly, expecting to engage in discussion, but got limited response when I talked with them - too busy with PR I think.

[rhomboid] 12/5/2016 12:45

Hi Profdoc/Glen

What was your role with Titon?

[profdoc] 12/5/2016 11:56

I did try, but struggled, to get Keith and the other directors to focus on long term pricing power in their three strategic business units. Competitive advantage is absent. Currently there are no barriers to entry, nor ability to dampen excessive rivalrous behaviour within the industry. Maybe they have a plan to improve strategic position that they did not share with me - good luck to them if they have.
Glen

[wad collector] 12/5/2016 08:27

Hmm, interim statement looks like an apology.

[dcarn] 05/5/2016 09:53

An illiquid stock, but i would have thought you could deal within the spread.

2016 Interim Results Statement released a week today, continued good news could see a spike.

[petersinthemarket] 05/5/2016 09:32

Outrageous spread being quoted on selftrade! 105/112p - why so large?

[rhomboid] 25/4/2016 18:26

10k late trade... that was all it took to move it up 5%.

[rhomboid] 25/4/2016 15:31

I think you'll find someone trying to work a buy order in the background, it did a similar thing when my broker bought my modest stake, it took 3 hrs and moved the price in a similar way.

This is an illiquid stock to put it mildly !

Happily it is sufficiently undervalued to make it all worth it IMHO

[wad collector] 25/4/2016 15:15

Chart looks an exciting staircase this afternoon , but all a bit artificial as there has only been a single buy all afternoon.

[wad collector] 11/4/2016 16:14

Thanks for link ; perhaps what has stirred up a new ATH?

[rainmaker] 11/4/2016 13:06

Titon(TON), now 103.0p bid, 107.0 offered.Recent research report released "on line" on 6/4/2016 and flagged on Titon news-



regards

[petersinthemarket] 08/4/2016 12:17

Many thanks A0..., that's much more interesting to watch. GL, pete

[wad collector] 08/4/2016 09:59

Thanks.
I like the way the share price has been nibbling its way back up day after day , and the narrowing of the spread to a penny.

[a0002577] 07/4/2016 21:57

Have updated the header - yes - I have lost interest in this one - regards -A00