Tracsis Share Discussion Threads

[apad] 03/1/2015 18:08

So good to have you holding my hand on the ledge, with the dizzying drop in view, B :-)
Anyroadu, I am hanging on in there - here's to the sunny uplands.
HNY
apad

[buffetteer] 03/1/2015 16:55

I don't agree that the company is high risk only the inflated share price .
Personally I want to see the company evolve over the next few years . A five bagger so far if it can continue to grow at 15-20% per annum for next few years 430p will seem like a distant memory !

[apad] 03/1/2015 13:18

It's been a long time since we've had positive news.
This is crazy.
apad

[wingrove4] 02/1/2015 16:33

I have taken profits selling half my holding to recoup my original investment about 3 months ago , since then they have continued their upwards trajectory. They are high risk but this is a small company with potential

[apad] 02/1/2015 08:26

Telegraph tip effect - very tempted to top slice.
apad

[apad] 01/1/2015 17:56

You're correct B,
A backwards PER of 32 brooks no bad news.
What's the old saw - climbing a wall of worry?
US news is the key, but hey what a sleigh ride.
apad

[buffetteer] 01/1/2015 17:40

Trcs is a good business but it's all in the price and more .Any slowdown, delayed contracts,etc could lead to large fall . Don't feel comfortable with such high rating because they normally go one way!

[apad] 01/1/2015 17:33

Stroll..
Here come the Tintins :-)
I bought my first shares 54 years ago and I haven't found a better example of the principle that you buy a good business, rather than a business with a good balance sheet.
Hey Ho.
apad

[strollingmolby] 01/1/2015 16:22

Good spot, APAD!



Disruptive Technology

Tracsis
411.5p
Buy

The UKs creaking rail infrastructure is overcrowded and getting old but Leeds-based software company Tracsis [LON:TRCS] helps operators get the most from their networks. The company monitors passenger numbers to ensure these giant train sets run as efficiently as possible, saving money and getting us there on time.

The company announced a five-year contract with a major infrastructure client last November. Revenue more than doubled to £22.4m and pre-tax profits increased by 62pc to £4.2m in the year ended July 2014. The company generates plenty of cash and the balance sheet is strong with no debt and cash of £8.9m at the end of July.

Make no mistake this is a high risk investment as the company is a tiddler with a market capitalisation of £110m, and the shares are highly valued trading on 23 times the forecast earnings per share of 16.8p. However, the earnings forecast could prove conservative given the rapid growth and demand for their services. Buy.

[apad] 01/1/2015 14:40

Oh my paws and whiskers.
Tipped in the Telegraph!
We've come a long way :-)
apad

[stewy_18] 26/11/2014 11:52

Nothing I know of. Will be a bumpy ride me thinks.

[welsheagle] 22/11/2014 20:25

Are there any rumours that the American pilot is going well - reason for gains?

[apad] 21/11/2014 19:32

Loads of small buys today. Looks like the PIs are being drawn in, unless there is news I've missed.
apad

[apad] 17/11/2014 13:58

Kwan (computer geek) went last year and Watson (COO) went in 2010(I think). So, we are left with a tough management man who speaks properly and doesn't lose his head.
Wonders cease never.
apad

[stewy_18] 17/11/2014 13:14

OMG, how young is John McArthur ? I thought he'd be a lot older. He must be a real talent bulding up this business and he can't be 40 yet.

I thought it may have been tipped. Already a bit toppy, but I guess it comes down to what you think it will be worth in a few years time. Short term it could go anywhere.

[strollingmolby] 17/11/2014 12:26

Eeek, watch for a spike...

[cricklewood] 17/11/2014 08:06

Get out before MIDAS ?.

[strollingmolby] 14/11/2014 11:01

Paul - many thanks for holding the interview with John - he was as clear as the previous three times I've heard him speak about the direction of travel for the firm and future growth opportunities.

it was a good job you caught him on the Wednesday afternoon, as he may have been jaded the next day after picking up the 'Tech Growth Business of the Year' award at the UK tech awards 2014.

hxxp://www.uktech-awards.co.uk/index.php/winners/

[apad] 14/11/2014 09:11

Ireland forward PE estimate is 21.
stewy, I don't like punishing success when the story hasn't changed.
I find that topping up on weakness out of income keeps my inner chimp under control. These are my buying prices for TRCS:
61.0126
75.5536
75.5196
124.8700
158.6676
193.7933
It's now my second biggest holding, with a fifteenth of the market cap of my biggest (RSW) so my rules prevent further increases. I occasionally have to soothe my chimp when he panics and wants to sell, however.
Regarding your 'margin' point - I am not at all concerned about margins as long as the purchase fits snugly into TRCS's competences. It is too small to be a holding company for separately managed entities. McArthur doesn't sound like a Tintin, so that's comforting.
ROR worth a top-up on today's markdown, but I have no available capital.
apad

[stewy_18] 14/11/2014 08:17

Yes Paul, I think there could be buying opportunities better than 365 pence. MPEC sales are uncertain next year. I read the brokers note yesterday and they were uncertain of that MPEC sales would match £5.7 million last year (from the UK at least). So there could be a decline in the high quality earnings part of the business. Then again, if US sales start to kick in or if there are contract wins announced .....

As you say it is difficult but the P/E ratio has risen from 16 when I bought them in 2012 to 28 presently.

One thing I was thinking about regarding the acquisitions is that TRCS are effectively using money from the high quality earnings of MPEC to invest in lower margin businesses like the passenger counting, consulting and rail software. So regarding further acquisitions, I would like to see them focus on the higher end operating margin businesses. I'm not sure how many companies there are that have MPEC earning potential however. And could I return 20% on the cash if it was returned to me in dividends? Unlikely!

TRCS always looks expensive. I must admit to thinking about selling after the podcast because of the uncertainty of MPEC sales next year. But I think in the longer term MPEC will go global. If they can break the US market, they can break any market and as John said word travels fast when you have a proven working technology.

Difficult one, but I can only hope you don't get a buying opportunity :)

All the best

Stuart

[buffetteer] 14/11/2014 07:37

Paul
You could wait for another poor market when they tend to drop near £3 to buy.

[paulypilot] 13/11/2014 18:49

Hi Apad,

Indeed. The thing I like about John McArthur, is that he just gives you a straight answer to any question. He wasn't interested in asking in advance what questions I was going to ask him, he was perfectly happy to just do the interview off the cuff.

The shares deserve a premium rating for management who haven't put a foot wrong with 6 acquisitions to date, and for the prospects for overseas growth.
Also note that management salaries are very reasonable - you get the CEO+FD for under £300k p.a., including bonuses.

No danger of share dilution either, as they're making acquisitions from the company's own cashflow. Every time I look at this share, I wish I'd bought some a year earlier, but it never quite looks cheap enough for me to buy any!

Regards, Paul. (no position)

[apad] 13/11/2014 15:44

oops, ignore query.
apad

[apad] 13/11/2014 15:42

Seems a straight forward sort of a bloke.
One observation: isn't the PER now ~18? Doesn't seem such a high rating.
apad

[paulypilot] 12/11/2014 15:11

Thanks for the questions, I managed to ask most of them, and your questions helped me focus on the main area - condition monitoring, and US expansion.

The audiocast is now live, on AudioBoom and SoundCloud:





Hopefully people find the interview useful/interesting, and thanks for your input with the questions submitted.

Regards, Paul.