Cml Microsystems Share Discussion Threads

[rainmaker] 26/11/2010 17:39

Sorry make that February-




Rainmaker - 26 Feb'10 - 14:56 - 1737 of 2401 edit


Louis, another Company that deserves close scrutiny at current levels is CML Microsystems currently around 41p, not a net net "bargain" but excellent value and I feel will do very well over the next few years. Company has reported an upturn and Directors have been buying recently. Talk of a delisting seems to have been rejected.If you don't already hold them then SDI Group(SDI) currently 5.75p.

regards

[rainmaker] 26/11/2010 17:36

Thanks Bones-one thing that never ceases to amaze me is how a share can go from extremely undervalued to fully or even overvalued in a short time period. I highlighted these at 40p on the Value thread around in March and there're now trading at 170p

regards

[bones] 26/11/2010 15:26

Investors Chronicle shows how things can change in one year and a bit :)

IC VIEW:
GoodValue (at 170p): CML's recovery looks on track and, trading on a prospective PE of 16, falling to 10 in 2011-12, the shares are good value.

Last IC view: High enough, 28p, 16 Jun 2009

[bones] 24/11/2010 18:08

Good man.

I think Cenkos are still conservative with £2.1m for the year. The CEO said he thought the traditionally weaker second half was trading positively and if you look at the 2nd half of the year just gone, there is enough in the operating level to suggest CML could achieve growth to higher than 6p per share for the second half provided they keep costs firmly under control as they seem to be doing. Cenkos previous forecasts mentioned in post 127 of 9.9p and 16.3p I assume will be upgraded as I can't see them achieving below 12p for 2010/11. Forward PER for 2011/12 could therefore be as low as 9 or 8 if upgrades follow through making a very low PEG rating.

There is also talk of net cash being £8m in 2013 in that report. Not sure the source of that but I assume it is Cenkos? Things look pretty handy if all develops as planned. With cash comes potential dividends as they have always (until the recession) paid these. There was no mention in the interims and I assume they want to continue to pay down the bank debts (which are still there despite holding cash in other forms).

[yoyoy] 24/11/2010 16:12

still here bones.

[bones] 24/11/2010 12:02

Price now 170p up 17p . As Mr Bond would say, "shaken not stirred" (unlike some poor peeps yesterday)

[bones] 24/11/2010 11:38

CML returns to profit
Tue 23 Nov 2010

CML - CML Microsystems

Latest Prices
Name Price %
CML Microsystems 162.50p +5.86%

techMARK 1,718 +0.17%
Technology Hardware & Equipment 557 -0.13%

LONDON (SHARECAST) - Strong demand for two-way radio and flash memory cards has helped semiconductors supplier CML Microsystems return to profit in the first half.

Revenues jumped 56% to £11.2m in the six months to September 2010. A loss of £1.13m was turned into a profit of £1.27m.

CML's main markets are wireless and storage. The wireless side is benefiting from growth in analogue two-way radios and TETRA radios. CML produces the controller chip for flash memory cards and this market is growing rapidly.

CML has moved into a net cash position at the end of September 2010. Net cash is expected to be £663,000 at the end of March 2011. Cash flow should continue to be strong and net cash of more than £8m at the end of March 2013.

Trading continues to be strong. Cenkos forecasts a profit of £2.1m for the year to March 2011.

Despite the good figures there was some profit-taking in the shares. The share price fell 10p to 153.5p but remain more than quadruple their level 12 months ago. They are trading on 15 times prospective 2010-11 earnings.

CML has transferred from a premium listing to a standard listing.

[bones] 24/11/2010 11:27

CML Microsystems (CML, 159p, £23.77m) In the half year to September sales rose to £11.21m (£7.18m) with gross profits of £7.83m (£5.15m), gross margins of 69.8% (71.6%) with slightly higher distribution and admin costs of £6.64m (£6.42m) taking the group into an underlying pre-tax profit of £1.36m (loss £0.99m) and EPS of 6.05p. The group ended the period with net cash of £0.55m (net debt of £2.08m at the yearend) reflecting the profits, the amortisation of development and a release from working capital of some £1.05m. The group reports the order book post the period end has remained healthy and expects positive trading conditions to prevail through what is traditionally the weaker half. The group is moving to a standard listing from the LSE premium which will make any potential corporate actions swifter and cheaper to execute. With wireless and storage related sales accounting for some 80% of total revenues it is hard to see what will cause any major disruption to the short/medium term outlook for the group. Forecasts of 9.9p on £2.02m PBT look more than achievable, putting the group on a 16x PER – but next year the £3.3m PBT and 16.3p EPS puts it in just 10x – something we can see rising over the year. On a 12 month view we rate the group a continued Buy and set a raised target price of 240p. Take advantage of any short term profit taking and BUY. (Julian Tolley)

Recommendation: BUY

[yoyoy] 23/11/2010 16:50

It goes to show that the old saying "its better to travel than arrive" still hold good.

Outlook not optimistic enough.

Will have to wait and see what the brokers say

[bones] 23/11/2010 10:49

LOL, the MM's are certainly taking the mickey now. In the face of today's interims this can only be a few people taking some profits (no surprise there in the light of the run up and something to be expected - see post 120 above for my expectation of this). Feel a lot more comfortable holding these after the interims which gets any uncertainty about the company's progress out the way. I am confident these will head for 200p in the next few weeks (with a 250p target).

[bones] 23/11/2010 08:15

Early pop-up of 5p on a rubbish day for the markets (why can't these Koreans get on with each other? LOL)

[parvez] 23/11/2010 07:53

y,
oct 2010 is out of date :) Probably need to re-forecast in light of these results

[bones] 23/11/2010 07:47

Parvez - 18p is way too optimistic for current year but we can all hope for these things :)

[bones] 23/11/2010 07:39

Pleased to see them clear the best part of £1m post tax for the half year. They mentioned that the second half is "traditionally weaker" but reckon they will do well during it. Turnaround in the tax charge from a credit to a debit is a bummer but I guess when your main company is based in Germany you are going to pay tax on profits!

On this basis, perhaps the EPS for the whole year could exceed 12p? That's a current PER of around 14. It's all a question of how much growth can be expected. The business is generating decent cash flow - £4m at the operating level and it's good to see a net surplus of cash. Overall, a very positive outlook. The CEO seems to be keen not to get too excited!

I'm hopeful we will see the brokers upgrading the outlook. We have had a good run but I stick to my target of 250p over the next few weeks and months............ barring any world financial meltdowns :)

[parvez] 23/11/2010 07:36

yoyoy,why fantastic?

Financial Highlights:

- Group revenue up 56% to GBP11.21m (2009 H1: GBP7.18m)

- Gross profit margin at 69% (2009 H1: 72%)

- Pre-tax profit up to GBP1.27m (2009 H1: loss of GBP1.13m)

- EPS improved to 6p per share (2009 H1 loss of 7p per share)

- Net cash position of GBP553k at period end (Net debt of GBP2.09m at 31 March 2010)

Operational Highlights:

- Revenues up in all major market areas

- Revenues up in all major geographical regions

- Continuing programme of new product development

loss of 7p for first 6 months last year and profit of 6p now, no debt - superb turnround! where do you get the 9.9 full year forcast? Just a quick calculation and I reckon they could do about £3M (approx 18p per share) - this is highly leveraged IMHO.

[yoyoy] 23/11/2010 07:33

Paevez,

why fantastic?

[yoyoy] 23/11/2010 07:26

forecast for year is 9.9p

achieved in 6 mos 6p

net current assets, previously net current liabilities

[parvez] 23/11/2010 07:23

fantasic set of results. this should power them ahead big time IMHO

[bones] 22/11/2010 15:38

Interims are due tomorrow morning I believe.

I put out a tester sell online of 5,000 shares and was quoted 163.6p on a spread of 162-165. Not only was this way above normal market size but actually above mid-price. I declined it as it was only a test but clearly the MMs are happy to buy stock off the punters.

Currently on L2 two MMs are on the bid at 162 and one on the offer at 165 (WINS).

I am trusting the interims live up to expectations. :)

We have had a big run up of 50% since the Toshiba announcement in October so I guess the scope for a pull back on the results is a possibility.

[bones] 18/11/2010 17:17

For those who worry about the speed of ascent, it's worth looking at a logarithmic chart of the share price as this demonstrates whether the rate of increase is actually accelerating or not. In the below chart, we see that the price trend is still in a straight channel so the increase is not especially unusual.

[bones] 18/11/2010 16:01

I would say it's just the usual pre-results interest. It's such a thin market that the MM's scarper for cover in either direction. Having bumped it up to 166, all three MM's have simultaneously taken it back to 161 on 1 seller of 3,000 shares. Let's hope the interim results stand up next Tuesday.

[parvez] 18/11/2010 15:52

something's up here I guess. RNS would be good clarification?

[bones] 18/11/2010 15:48

Surprised at that sudden leap this PM. As no trades appearing, perhaps a larger order is in the wings.

[yoyoy] 18/11/2010 15:29

Bones,

we're going need the oxygen.