Calnex Solutions Share Discussion Threads

[rivaldo] 24/4/2022 07:49

Cheers Tole. A decent article by TMF's usual standards.

[tole] 22/4/2022 17:04

https://www.fool.co.uk/2022/04/22/my-top-stock-on-london-stock-exchanges-aim-market-right-now/My top AIM stock todayThe company I'm referring to is Calnex Solutions (LSE: CLX), an under-the-radar Scottish business that specialises in telecommunications network testing solutions. Founded in 2006, it listed on the AIM in 2020, and currently has a market capitalisation of around £150m.Calnex is a global leader in the telecoms network testing space with a distinguished list of customers. Today, it serves businesses across the entire telecoms value chain including network carriers such as BT Group, hardware providers such as Ericsson, and chip companies such as Intel. The group is led by founder Tommy Cook, who has over 35 years' experience in telecoms testing and measurement.Why I'm bullish on CLXThe main reason I'm bullish here is that the global telecoms industry is going through a period of major change today. Not only is new 5G network technology being rolled out but new technologies (cloud computing, autonomous vehicles, smart cities, etc.) are emerging. This means that telecoms networks will need to be tested rigorously in the years ahead. Calnex is in the right spot at the right time.Strong momentumLooking at recent announcements, Calnex appears to have plenty of momentum right now.Earlier this month, the company advised that it continues to experience "high demand" for its range of test and measurement solutions and that results for FY2022 (the year ended 31 March 2022) would be slightly ahead of the market's expectations. It added that the order book was sitting at "record levels" heading into FY2023, giving the board confidence that the group can deliver "significant, sustainable growth" over the coming years.The group also announced the acquisition of iTrinegy Limited, a leading developer of software defined test networks technology, for £2.5m. iTrinegy generated revenues of around £1.4m in the year to 30 September 2021, and Calnex expects the business to be an important contributor to group profit in subsequent years.A high-quality businessLooking past the growth potential here, I like the fact that Calnex is a high-quality company. Over the last five years, it has generated consistent revenue and profit growth. Meanwhile, return on capital employed has been high. On top of this, the balance sheet is strong and the company has started paying a small dividend. Overall, there's a lot to like about this AIM stock, in my view.I'd buy this AIM stock todayNow, of course, there are some risks to consider here.One is the valuation. At present, Calnex trades on a forward-looking price-to-earnings ratio of about 31. That's not an outrageous multiple, however, it probably doesn't leave a huge margin of safety. If revenue or earnings growth slows, the stock could underperform.Another is supply chain issues. These could potentially create challenges in the short term.Overall, however, I'm very bullish here. I'd snap up this AIM stock today.

[masurenguy] 22/4/2022 16:47

Yet another new ATH ! 😊

[swiss paul] 22/4/2022 16:03

and price still holdingb steady after this. I think Pershing may have jumped to early, but hey ho their loss:

Name

Pershing Securities Limited (via Pershing Nominees Limited)

Position of previous notification (if applicable) 15.0%

Resulting situation on the date on which threshold was crossed or reached 11.857%

[rivaldo] 21/4/2022 07:14

Good to see CLX awarded the prestigious Queen's Award for Enterprise - notable that only seven UK companies in total have received two such awards in 2022:

[rivaldo] 19/4/2022 14:56

More new highs.

[piedro] 13/4/2022 13:54

SM, thank you.

Will put up a new chart when done.

[strollingmolby] 13/4/2022 13:11

Hi Piedro - 2018 to 2020 full year figures are included in the Admission Document linked above the long-term chart above (page 25). Does that give you what you need?

[piedro] 13/4/2022 12:31

Does anyone know where I can find Annual and Interim Reports pre 2020?

My charts feel incomplete as with this one ...

[apad] 13/4/2022 10:44

Had another look at iTrinegy. It seems to address hew's earlier point about the pot pourri of different systems that need to be accommodated in order to address company requirements - so-called 'Enterprise Class'.
It is very much part of the Cambridge community, so I believe it will see Calnex as its route to much better commercialisation of its skill set.
Mutual benefit.
CLX is 4% of my portfolio and is now on the 'increase' list as soon as the news bump dies down.
apad

[rivaldo] 13/4/2022 10:11

It dropped with the markets, but is still attractive imo for such a high quality company with years of global growth ahead of it.

CLX still have over a £12m cash pile even after yesterday's acquisition per forecasts, so plenty of headroom for more earnings-enhancing acquisitions.

The ex-cash P/E for the current year is still only around 24, which for a high-tech, market-leading company like this is cheap. And that's before any upgrades after the forthcoming prelims.

Presumably at some point an American behemoth will snap CLX up, and on American company valuations they'd likely be perfectly happy to pay double the current share price.

[masurenguy] 13/4/2022 09:01

Shareprice up by 36% over the past 7 weeks !

[rivaldo] 13/4/2022 08:34

New highs now, and buying coming in at the full 165p offer price.

[rivaldo] 12/4/2022 13:48

Cheers hew.

Here's what Cenkos say this morning specifically about iTrinergy - I assume they'll be upgrading/amending their forecasts after the 24th May prelims since they've left them unchanged at present:

"iTrinegy’s NE-ONE hardware and software platforms enable organisations, especially across the technology, financial, gaming and military/government sectors, to accurately recreate complex, real-world network test environments to understand and verify the performance of applications before deployment in their networks. iTrinegy is a good fit for Calnex, in line with the strategy articulated at the IPO, with plans to expand the sales presence to scale the business and build, support and grow a reseller network, particularly into the US.

iTrinegy acquisition.

iTrinegy is focused on the development and delivery of Enterprise-Class Software Defined Test Network (SD-TN). The NE-ONE product platforms enable customers and vendors to validate application performance and behaviour in an accurate emulation of real-world WAN, Satellite, Cloud, Cellular, SDWAN and Hybrid networks."

[hew] 12/4/2022 12:59

rivaldo, thanks, yes I'm - well, have been!- pretty technical, but not in that sophisticated comms world. A very superficial understanding, but do recommend anyone having a read.
Things like iTrinegy being able to incorporate up to a 100 glitches, faults and imperfections in the network emulations for their customers to test against come across easily!
Quite an extensive site, with an offer of "Essentials Guide" and others for specialised areas like the military.
Ask for business email addresses though. Also a short general video, ending with some of their 700 clients.

[rivaldo] 12/4/2022 10:46

Cheers hew - I'm just an ordinary pleb whose knowledge of network emulation etc is beginner level, so it's helpful to have someone here who understands what iTrinergy do from a technical point of view and what CLX can bring to the party!

[hew] 12/4/2022 09:50

A few minutes on the iTrinegy website showed me both what a complex tech business they are in and a most impressive span of global-giant customer names.

I'm pleased that Tommy Cook has an enviable tech background himself - I doubt many outside that specialised world could properly appraise such a company and how it will relate to the "basic Calnex" before doing such a deal. A very considerable technical moat.

Key for me is opening up of very wide-ranging horizons for the Calnex/iTrinegy combination. Hugely wider than for Calnex itself, that client list indicates.

If it ever might have been to some degree bottled up in a small specialised world, I now see "Calnex uncorked"!

[hastings] 12/4/2022 07:17

Yup, very good news and plenty of growth to come.

[rivaldo] 12/4/2022 07:15

Yet more excellent news today:

- the results to 31st March '22 will be ahead of previously upgraded expectations
- the order book is at record levels
- semoconductor supply constraints are being managed successfully

Above all, there's a strikingly confident statement that CLX expect to "deliver significant, sustainable growth over the coming years".

Plus there's a very good-looking earnings-enhancing acquisition for a max £3.5m. The client base is remarkable for a small cap:

"Juniper Networks, JPMorgan Chase, Ubisoft Games and the Government and Military in the UK and US"

CLX can use its power to scale up this business quickly and globally:

[tole] 08/4/2022 21:07

https://www.fool.co.uk/2022/04/08/2-british-stock-market-winners-to-hold-on-to-for-the-long-run/New all-time highsLet's start with Calnex Solutions (LSE: CLX). It specialises in telecommunications network-testing solutions. Recently, its share price hit new highs. Yet I think this is just the start of the growth story.The rollout of 5G network technology will require an enormous amount of testing in the years ahead. For networks to work seamlessly (and handle new technologies such as autonomous vehicles), they'll need rigorous testing. That's where Calnex comes in. Its solutions help network carriers prove that new systems operate effectively, and conform to strict international standards.A recent trading update revealed that the company has a lot of momentum right now. Not only did it say the strong levels of trading in the first six months of FY2022 (its year ends 31 March) had continued, but it also said it begins FY2023 with a record order book across all product lines. As a result of the order book strength, it said that revenue and operating profit for FY2023 would be "materially ahead" of market expectations.In terms of risks, supply-chain challenges are one to consider. Share price volatility is another. This is a small company with a market-cap of just £130m. So its share price is likely to swing around a bit.Overall, I'm excited about the potential here. With the stock trading at just 26 times this year's expected earnings, I see it as a strong buy.

[rivaldo] 08/4/2022 08:55

No probs Brucie5 - Tatton Asset Management, Bloomsbury, YouGove, Treatt, Mortgage Advice Bureau. These are either not my bag or too expensive imho.

[brucie5] 07/4/2022 13:28

rivaldo7 Apr '22 - 11:15 - 605 of 605
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Just received the April factsheet for Keith Ashworth-Lord's CFP SDL Free Spirit® Fund. There's a nice mention for CLX, which now comprises 4.52% of the Fund and is the sixth largest holding:
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Thanks Rivaldo, are you able to share the other (top) five?

[rivaldo] 07/4/2022 11:15

Just received the April factsheet for Keith Ashworth-Lord's CFP SDL Free Spirit® Fund. There's a nice mention for CLX, which now comprises 4.52% of the Fund and is the sixth largest holding:

"Of the gainers, Calnex Solutions, a recent addition to the portfolio, led the way following a positive trading update pointing to FY22 revenue and profit in line with market expectations but, more importantly, FY23 expected to be materially ahead."