Cello Health Share Discussion Threads

[felix99] 06/7/2010 15:25

have a look at NETD sometime . Not sure if you have come accross that one but looks interesting.

[interceptor2] 06/7/2010 15:25

GHF - Thanks for the Altium notes.

After the positive AGM statement and the directors buys, I feel very comfortable holding CLL. Just a matter of patience until this is re-rated, it just needs a kick start to attract investors attention. Maybe another positive trading update would help, they normally release a half year statement in the first week of July.

[felix99] 06/7/2010 15:23

PLus price is rubbish GHF. I think they just quote WINS prices and maybe a few other selected MM;s that bother with PLUS essentially. So apparent price is always much higher than full prices on LSE for many PLUS quoted stocks

[glasshalfull] 06/7/2010 13:29

See offer raised by 2p over on PLUS - 32 v 37 - following a 30k buy.

Regards
GHF

[glasshalfull] 05/7/2010 22:46

Altium provided a brief update on the 9th June.

Snippet -

"Cello group has announced share purchases by three of its directors.
Specifically, Allan Rich (Chairman) and Mark Scott (CEO) have each bought 30k
shares at 32.5p, while Mark Bentley (FD) has bought 20k shares at 32p. When
combined with last week's option awards these purchases represent a useful increase in management's stake in the group's equity, provide an additional indication of their confidence in trading prospects and, as such, a helpful addition to an increasingly positive flow of news from the company. Most recently, this has taken the form of a positive AGM statement on 17 May which confirmed that the group has made "a solid recovery" in profitability during Q1 building on a marked trading improvement during the latter part of FY 2009. At divisional level, client activity within Research and Consulting (c.60% of group revenue) has recovered from the challenging conditions experienced during last year with health related / international mandates (two key areas of strategic focus) leading the line. The Tangible division (advertising, planning, direct marketing - c.40% of group revenue), which was previously described as experiencing "a marked increase" in new business activity, is "performing as expected". Tight cost control also remains a key area of focus with profitability during the current year set to benefit from £4.3m of savings achieved during FY 2009."

Although not upgrading on their 7p EPS forecast for the current year, Altium indicate -

"...we believe our forecasts are solidly underpinned and that the prospect of upgrades has increased in recent months. We regard Cello's stock as substantially undervalued across a range of metrics given this positive outlook, the quality of its underlying operating assets and attractive long term earnings growth potential as a recovery in research and marketing spend plays through a scaleable cost base. We reiterate our Buy recommendation."

I agree entirely with this synopsis. As I've previously mentioned, debt is coming down fast, earnouts significantly lower, over £4m of costs removed....while the business trend is steadily improving.

Prospective PER for current year 4.8 falling to 3.9 for 2011 (20% growth factored in). Far too cheap IMHO. Altium still have 49p target price, 46% uplift from here....and they continue to reiterate that the prospect for upgrades has increased which may highlight just how cheap CLL is.

I've recently witnessed re-ratings in a couple of my holdings - EMR and STAF - which both exhibited signs of improved trading for several months before the market finally took notice. Both produced "ahead" trading statements. I'm hoping CLL follow suit.


Regards,
GHF

[glasshalfull] 05/7/2010 15:05

Further cost savings ;-)


UK- Qual research agency Rosenblatt has moved in with Cello Group sister company, the co-creation firm Face, with the two companies now sharing administrative and commercial functions.




Regards,
GHF

[glasshalfull] 01/7/2010 22:20

Signs of life in the CLL share price in the last few sessions.

If recent years are anything to go by then there is a very strong chance of a trading update anytime now. Trading statements released on the following dates:-

3rd July 2009
4th July 2008
12th July 2007
3rd July 2006


2010 market updates

19th January 2010 - pre-close trading update indicated that there were signs of improvement in markets.

16th March 2010 preliminary results confirmed improvement, "Cello has strong revenue pipelines in Research and Consulting and Tangible has also seen a marked increase in levels of new business activity."

17th May 2010 - AGM statement noted "The Group has therefore performed strongly during the first quarter of 2010. While there remains economic uncertainty, we are growing in confidence about the Group's performance."

So, given that guidance in 2010 has been of improving markets and strong performance (so far) I'm hopeful that CLL will be in line with market forecasts at the very least....and there's always a possibility that they may be ahead.

Worth reiterating m my earlier post - 364

Altium snippet on AGM update

"...we continue to view the group's stock as substantially undervalued and would cite: (a) the quality of its underlying operating assets, (b) robust financials (debt well within long-term facilities of £17m), and (c) earnings growth potential as a recovery in research and marketing spend plays through a scaleable cost base, as key attractions. We are nudging up our target price from 46p to 49p (an undemanding 7x FY 2010E PER / c.48% upside) to reflect the encouraging momentum highlighted above and reiterate our BUY recommendation."


Regards,
GHF

[glasshalfull] 28/6/2010 10:22

I thought peer Creston's disposal may concentrate a few minds on the undoubted value of Cellos assets.

Regards
GHF

[qs9] 23/6/2010 11:42

When is the next update due please? must be soonish?

Thanks

[felix99] 18/6/2010 06:08

Yes I've got a few GHF. Just tucked away as a slow burner.

[glasshalfull] 17/6/2010 16:53

Thanks Felix.....quick perusal via a smartphone. Thanks for flagging.
I still think that an investment case stacks up though ;-)

Regards,
GHF

[felix99] 17/6/2010 16:48

If you read Jo Hambro its not a purchase but just moving of a stake to them from another manager or holding somewhere

[glasshalfull] 17/6/2010 16:41

Yep interceptor - That was Ennismore crossing the 3% threshold in early June, and now we have J O Hambro Investments declaring a notifiable holding.
Add in the Chairman, CEO and FD's recent purchases, bullish AGM update and I'd say Cello was a strong buy.

Still trading at lows and I'm sure a little bit of patience is all that's required.

Regards,
GHF

[interceptor2] 17/6/2010 14:50

Sorry to use that word again, but this looks like a significant holding for J O Hambro Investments.

See below..........

[interceptor2] 09/6/2010 08:12

It depends on how you define the word significant, in terms of the amount of shares purchased it isn't significant in numbers. But in terms of the timing of these purchases then the word significant may be appropiate.

But point taken.

Regards ic2.......

[glasshalfull] 09/6/2010 08:02

Agree QS9....as in my post above I noted that it was more of an indicator to the market. Definately not significant. (One of my holdings - ASW - had the FD buy £93k yesterday. Now that's significant)

EDIT - See you were referring to interceptors post.

Regards,
GHF

[qs9] 09/6/2010 07:57

hardly "significant" purchases, purchases yes, but not tens of thousands being forked out.

[interceptor2] 09/6/2010 07:42

Significant director share purchases



This announcement would seem to back up the recent strong AGM statement, and recent buying by institutions. With all three of the main directors ceo c/man and fd buying shares, they of all people should know how the business is performing.

This is a great buy signal imo.....

[glasshalfull] 09/6/2010 07:40

....and like buses when you're looking for one, 3 come along at once ;-)

Chairman, CEO and Finance Director Buys




IMO "indicates" to the market that all's well at CLL.

Regards,
GHF

[glasshalfull] 07/6/2010 14:25

Another institution on board.



Ennismore now have a notifiable holding.

Looking forward to interims which I now happen to believe will prove the catalyst for improvement to the share price, which remains rather subdued despite the full year results and AGM statement suggesting an improvement in business activity across both divisions and also indicating that the cost cutting undertaken was having a positive effect in terms of profitability.

Patience the key.

Regards
GHF

[welsheagle] 31/5/2010 19:10

From May's 'Company Refs', when price was 34.5p:-
a/ Prospective PE ratio of 4.62 (based on three broker forecasts, two recommending 'buy' and one recommending 'corporate buy').
b/ Positive cash flow per share of 6.90p.
c/ Positive gearing of 21.2%.
d/ Price to sales ratio of 0.15.
e/ Turnover up from £14.7m to £127m in six years.
f/ Net asset value per share of 92.8p.
g/ Three directors buying recently.
h/ Dividend yield of 4.06%

[coopstock] 20/5/2010 17:25

Thanks GHF - you just cheered up a very red day.

[glasshalfull] 20/5/2010 17:17

Thanks for flagging IMD interceptor. V bullish and worthy of investigation.
Saw your note on JDG on another thread - it was already on my watchlist but I've not looked at it for a while.

Back to CLL.

Altium positive on AGM statement and reiterate Buy recommendation. Not upgrading forecasts at this stage (7.0p forecast for current year) but raising price forecast from 46p to 49p - almost 50% higher than current price.

Snippet:-

"...we continue toview the group's stock as substantially undervalued and would cite: (a) the quality of its underlying operating assets, (b) robust financials (debt well within long-term facilities of £17m), and (c) earnings growth potential as a recovery in research and marketing spend plays through a scaleable cost base, as key attractions. We are nudging up our target price from 46p to 49p (an undemanding 7x FY 2010E PER / c.48% upside) to reflect the encouraging momentum highlighted above and reiterate our BUY recommendation."


Regards,
GHF

[interceptor2] 20/5/2010 08:46

I came across a AGM statement this morning from Independent Media (IMD) (don't hold) they are in the Media sector but a different area from CLL. This has to be the most bullish statement I have read this year by any company. As well as international revenue increasing 100%, they report that the UK market is also improving up 20%.

When I look at the recent CLL statement and others like these in the media sector, it does look like the recovery in this sector is gathering pace.

Well worth a read.............

[glasshalfull] 18/5/2010 17:19

Cheers steg.
Happy to bide my time.....each statement released by the company suggests a continuous improvement.Question now is "when" rather than "if" these will undergo a re-rating. All IMO, of course.

Still not aware if Altium increased forecasts on the back of that upbeat statement.

Regards,
GHF