Computacenter Share Discussion Threads

[boadicea] 09/9/2021 12:11

Tbh, I find this a rather difficult company to value objectively. On an earnings basis it appears to be fairly valued - not generous compared to its sector peers (but who are its peers realistically speaking?).

On a price/revenue basis its valuation seems distinctly lowly (the prospective figure is around 0.6, I think) implying meagre margins. Its range of products/services is more comprehensive and complex than many more 'glamorous' outfits which are often successful one trick ponies and easier to analyse if lacking depth. High bought in costs appearing as turnover are probably the principal reason for this. It is therefore not fair to compare it with, say, DOTD or even Cerillion with price/revenue ratios in double figures! (The latter make me nervous of the potential effects of any glitch in their progress.)

Computercenter is Main market and should have significant analyst attention - but does not seem entirely happy with it! It is worth noting that it has consistently beaten concensus forecasts and seems likely to continue this happy trend.

Supply side tightness may have short term cost implications and will similarly affect competitors (delayed completions, or cost premiums to avoid them): equally the longer term pricing effect may be positive.

I see no reason to quarrel with the current market view (seldom a good idea) but feel the company should probably ease up its margins over time to justify accelerated share price advance.

...And my previous suggestion of a share split is still on the table.

[phillis] 09/9/2021 11:39

P/E of 20+?

[deanowls] 09/9/2021 10:34

On the above numbers it really isn’t.

[phillis] 09/9/2021 10:21

Great results but the share price is asking a lot

[boadicea] 08/9/2021 18:10

Clearly, there is great excitement about the prospect of tomorrow's interims - not.

In fact we have the usual pre-announcement dip as noted by imastu a while back.

[srichardson8] 31/8/2021 13:30

Period Mean High Low Median # of Estimates
Annual Dec 23 143.3 155.0 132.7 137.10 7
Annual Dec 22 139.8 151.9 129.5 135.90 7
Annual Dec 21 137.1 147.7 128.5 134.90 7

I thinks it is quite clear. The figures for the current term are going to be considerably better than the mean shown above (all from the company website) but no analyst has bothered to change his or her numbers subsequent to the July upgrade. So the company is cheesed off.

[imastu pidgitaswell] 31/8/2021 09:12

Maybe - to any of those. Not a bad problem to have though; it has gone up...

[boadicea] 31/8/2021 08:17

This is one of the oddest statements I have seen.
If an analyst does not update a forecast following company guidance, it merel ybecomes out of date and not 'current'. It should therefore be excluded from the current 'concensus'.
Perhaps they mean that the forecast was repeated (redated) but unchanged which is an unchanged update, implying perhaps that the analyst did not believe company guidance.
I suspect that a significant issue is supply chain difficulties where an analyst may take into account wider factors than the company's own view and hold off updating awaiting further clarity.

[imastu pidgitaswell] 31/8/2021 08:00

As they say, because current market forecasts are wide of the mark (because they haven't been updated) "Therefore, we are required to make this additional Trading Update Statement."

It's a bit of a swipe, but legally they did have to say something.

[rachael777] 31/8/2021 07:32

This mornings rns i find somewhat bizarre - why are they compelled to make a further announcement ahead of results when they have already provided a trading update in July ? I dont understand the side swipe at analysts who havent reacted to the update in July. Presumably the news next week is going to be of the "blow your socks off" variety but are the xompany compelled to let the market know in advance ? Not complaining as this is my largest holding - just confused!

[boadicea] 10/8/2021 13:32

Hitting new highs but apparently not much interest here.
The shares are heavy which some may find off-putting. The advantage of that is often a bb without the trash that occurs with penny stocks.
However, despite the high price of the shares, they are not expensive on comparative metrics.

With a turnover approaching £45 per share it looks very cheap at £28 - most companies in its sector trade at a far higher rating. On the one hand that portrays a low profitability in the business. On the other it should give it room for margin improvement or else be a cheap purchase of turnover for any potential suitor.

Computercenter could unfortunately (for the country if not its shareholders) become another victim of opportunistic transatlantic predation.

As previously suggested, a share split (e.g. 4 for one) would put it into more comfortable territory for the average punter and leave an early £10 target to aim at.
My instinct is to put a bundle of them away and hold for developments in due time.

[imastu pidgitaswell] 21/7/2021 12:22

It is funny how it always get dropped ahead of the results - which then prove the drop unjustified, and back up it goes.

ADM is similar in that respect - it's as if they think it's not possible for a business to be this consistent year in and year out. Yet it is...

[boadicea] 21/7/2021 07:52

A creditable update this morning although I'm sceptical that 'backlogs' are anything to be comforted by! They may be an inevitable result of supply chain tightening and the pingdemic but are there to be managed effectively and their timely resolution can be a possible premium point against competitors.
They continue to look good value imho.

[phillis] 02/7/2021 11:45

divis this morning :-)

[boadicea] 21/5/2021 21:28

Computercenter has done very well since it troughed at the turn of 2018-19 (29 months ago) and manages still not to look expensive on a revenue basis. It just needs to work on its margins which I suspect are currently somewhat below the market average.

Margins are greatly a matter of cost sontrol, so one of the most encouraging comments in the recent update was that "the cost base reductions we experienced since the start of the COVID-19 pandemic have been maintained through the quarter".

With 17.5% of historic turnover in a weakening dollar, that represents a slight problem. The bulk, of overseas revenue however is in Euroland, ~47%, looking reasonably stable, and most of the remainder is sterling.
Nothing here to frighten the horses, I feel, and the company should be able to maintain traction in the marketplace.

I prefer shares that are reasonably heavyweight but some may consider that there are limits. Perhaps when we get into the thirties (I am an optimist) a 4 for one split would give a nice round £10 to aim for!

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[wynmck] 30/4/2021 10:09

Director Buy 600 at 2606p
Citigroup raise tgt to 2985 from 2600 Buy

[its the oxman] 29/4/2021 16:40

Positive trading held back by currency. Overall outlook remains very good so should regain some momentum hopefully.

[red5] 29/4/2021 16:10

Why did it drop today

[boadicea] 19/4/2021 11:50

This is pushing on nicely and with a trading update to come in 10 days. Recent trading updates from most others in this sector continue to be highly positive, all pointing towards the probability of further upside. Next stop 2750p?

[hawaly] 09/4/2021 12:22

Q1 Trading Update will be April 29:



GLA

😎

[boadicea] 09/4/2021 11:22

Gently testing its previous (January) high today but no serious volume pushing it. Ideally it would form a pennant around the 2500p level, denoting that a measure of market balance has been achieved and providing a stable base for further advance on the next trading update, typically issued around the end of this month (as in 2019 and 2020).

[its the oxman] 31/3/2021 10:36

Should be an easy 20% here , price action feeling better , push toward 3000p still my expectation.

[ihatemms] 30/3/2021 11:21

Another 3 govt contracts today. Up to 30 for the month so far ! Peter’s link provides the details.