Babcock Share Discussion Threads

[jelfsie] 20/7/2005 09:01

Im out at a tad over 179p, but for those late into the game it is still looking quite strong. No reason why, if in favour, it should not trade on a forward P/E of 14 times 2006 estimated EPS of 13.6p (190p), but I think thats high enough personally. Good luck all, and DYOR.

[jelfsie] 19/7/2005 17:10

You are right of course, but for the time being this is the "herd" tracker funds territory as far as I'm concerned - at least short term.

[shortermer1] 19/7/2005 16:46

325k UT trade at 181p, 3p above closing buy price.

Up again tomorrow me thinks.

Thanks,

ST

[jelfsie] 19/7/2005 16:44

Joined the FTSE 250 on friday, my mistake. A few more small contracts announced. 180p will be pretty tough resistance IMHO but above this blue sky to £2. Im on the offer at 179p tomorrow if anyone wants my shares.

[shortermer1] 30/6/2005 09:13

2 press comments today. One says takeover speculation with VT Group, the other says a merger with VT is on the cards.

Decent volume first thing too.

Thanks,

ST

[jelfsie] 29/6/2005 17:24

Sold the other 20% at 171p today, and will run the rest. A bit strange for the management to announce contract wins before they are made "official", still I suppose they must be pretty certain. Another Prime contract worth about £80M pa. Analysts forecasts beginning to look a bit silly. These could hit £2, particularly if trackers need to start buying if it gets into the FTSE 350 (market cap now £350M). Good luck all, and DYOR.

[jelfsie] 26/6/2005 13:30

The markets will open quite weak on Monday IMHO unless oil sells off in Asia. in the case of the latter, resistance is pretty strong at $60 as a psychological barrier. You might get a retracement back to 150 after all.

[maximoney1] 25/6/2005 19:22

Looks like some weakish support at 160p at least....never got in, but watching with interest.
maxi.

[jelfsie] 23/6/2005 10:18

Cheers, at 165p. On the offer at 170p for another 20%. The other 50% will be a core medium term hold. Sorry, maxi I didnt see your post. As you well know there is always a chance of a re-test of a major break, but when it is a break of major overhead resistance (in the direction of the existing trend) it is not always guaranteed. This is only usually the case with a change in trend - they almost always get tested at some stage. As you can see from my actions, I do not believe these are now a compelling buy short term. Brokers forecasts are currently 13.2p for 2006 putting the shares on P/E of 13. Some further good news (eg AGM 19/7) could see us test 200p quite quickly however. All IMHO of course, and DYOR. Good luck all.

[maximoney1] 13/6/2005 14:51

Jelfsie, maybe not many folk answering you, but your comments are appeciated....do you see this falling back to retest support at 150p, before another move up, or do you believe the share price needs to consolidate for several months before the next surge?
maxi.

[dougfrench] 13/6/2005 08:33

Regret BAB starts trading on SETS today. Behaviour may be therefore be more volatile and unpredictable because of the impact of AT trades.

[dougfrench] 10/6/2005 15:44

Appreciate your contribution and agree with your sentiments.

[jelfsie] 02/6/2005 08:02

Order book now £1.6bn and climbing. Blue sky above 150p to 180p which is why we are struggling at this level. Patience required as a result, and dont get too exposed at this level IMHO, hold back some cash in case we take a dive back to major support levels at any stage (currently at 144p and 132p). 180p still the target nonetheless. Good luck all and DYOR.

[jelfsie] 26/5/2005 11:19

Well, forecast busting results. Adj. EPS 14.2p and bigger than expected hike in the divi to 4p. Where to now?. Well, it would appear that the analysts that cover this share do not know their stuff (any clown could have seen this result comming) so here is my pennies worth. H2 performance (on-going) was EBITA of £24.3M on sales of £419M, Interest was £3.5M, and tax charge 28%. Things to note:- the company has stated that divisional performance in H2 are sustainable in 2006, and the small division that made a £1.2M loss is to be sold. With up to £9M of cost savings to come through (no timescale detailed) but lets say over the next 2 years, we should see the EBITA margin go from 6% this year to 6.5% by 2007.. The interest charge is very high due to a high level of Gross debt (£110M at H1 and £96M year end) and the commitment fees on the £140M facility. The gross debt fell by £14M in H2 alone, and I would expect the company to reduce this by at least £30M in 2006 due to operating cash flow (circa £60M) and better cash management as the peterhouse acquisition is bedded in. The Interest charge is therefore likely to fall dramatically over the next 3 years in the absence of further acquisitions. So even allowing for the full dillutative effect of the PUC (206M) in 2006/7 and assuming organic sales growth of 5% pa we get the following :- 2006: Sales £850M EBITA £51M, EPS 16p, Div 5p. 2007: Sales £900M EBITA £58M, EPS 18p div 6p. Thats an annualised EPS growth rate of 12%, healthy dividend increase, and will place the shares on a par (at least) with its sector peers VTG and BBY. They trade on a PE of 14 so 200p for BAB here we come. This of course does not account for contract wins / losses so the above should be adjusted in due course as we go forward. Im in again this AM big time and will agressively add on any weakness over the summer. Good luck all and DYOR!.

[jelfsie] 25/5/2005 08:15

Yep, my mistake sorry.

[greenslug] 24/5/2005 22:50

Results on 26th according to last trading statement.
What time zone you in?

[ashtongray] 24/5/2005 21:23

j

I notice that BAB tends to get mentioned as a possible beneficiary of any new nuclear power station program in the UK, due to its expertise in this area. Do you have any info on how important that might be or is it just journalists getting overexcited? tia

[jelfsie] 24/5/2005 15:40

Well the equity markets indeed got caught short in spectacular style!. BAB results tomorrow. I have increased my long position slightly today (long at 137p average) but will wait for the results tomorrow before trading large. I think the market has got this one badly wrong. There is no growth forecast for next 2 years due to issues at Rothsythe, but this does not give the management any credit at all. It also flies in the face of the consistent tender record the currnet management has. I also fail to see the current market consensus forecast of 13.2p for 2005 and 13.5p next. In my mind I've got pencilled in 14p and 15p. We shall see tomorrow. From a TA perspective, the share price is at a cross roads. Either we are poised to fall back below the old major resistance at 134p (look at VOD today!) or this is a spring to retest the recent high at 150p with a probable move higher. As an aside, if BAB were valued on a similar basis to VTG and BBY it should be trading at 170p. What I do know is I will either add tomorrow or cut and run, I wont be holding. Good luck all, and DYOR.

[jelfsie] 17/4/2005 14:01

10,000 on the DOW looms large. FTSE should trade back to 4750 from here quite quickly. This should be major support. IMHO if you want to get a feel for the current market look how it performs at this crucial level. If it goes crashing through, we could see further weakness. Still it should mean I will be able to buy some more BAB down to 130p. It only seems like yesterday that the US was worried about strong growth and oil causing rising inflation! (but thats the market for you). A slow down is exactly what the Fed wants this year. Can it engineer without going too far?. In theory, the current worries in the US about growth will see continued weakness in oil from here which could catch the equity markets very short indeed. All IMHO of course. DYOR.

[jelfsie] 14/4/2005 11:52

The market looking a bit wobbly at present. Are the US markets building for a shake-out back to last years lows, or is this the low for the year?. I dunno. A look back at the last time US rates went up (1994-5) is quite interesting. Critical DJ support is at 10365 and S&P at 1165. Anyway, started rebuilding my position in BAB this AM. Back in at 139p. Market forecasts suggest the brokers think the company will not grow over the next 2 years (2005 EPS 13.45p, and 13.52p for 2006), but recent trading up date indicates the company disagrees. Short term Rosyth remains an issue, but contract wins keep coming through and the pipeline is now over £1.2bn (and rising). I have faith in the management (the market appears not to). Institutional buying above old resistance at 134p is positive, the peterhouse acquisition was (with hindsight) well timed, and I think that this test of the old resistance will hold. RSI looks well oversold as well. Will continue to buy on further weakness back to 130p. If the share price falls below this in volume I will cut. All IMHO of course. DYOR.