Fisher (james) & Sons Share Discussion Threads

[roddiemac2] 16/5/2017 11:11

"This seem to me to be leading to a ragbag of specialist engineering businesses whose only common denominator is water"---A frivolous and irrelevant statement. As a long term investor you have clearly missed out on capital gains, but why else the obsession with a company you no longer hold? You may or may not get the chance to buy at lower prices , but if you honestly think the above , why bother ?

[phillis] 16/5/2017 09:26

hi Illis
to continue
I too am a long term investor for my family
I do not short

It seems to me that FSJ is fairly typical of the acquisition led companies we used to see a lot of in the 80s and 90s
Small family run business are bought with ritzy potential earnouts
This seem to me to be leading to a ragbag of specialist engineering businesses whose only common denominator is water
they are profitable when bought but dont increase the combined annual profits of the parent - forget underlying factor adjustments
In the last 2 years FSJ have added back to retained earnings £12m of contingent consideration

I could go on
But good luck with your holding anyway.The share price is holding up well

[illiswilgig] 15/5/2017 19:20

Phillis,

I don't dispute FSJ has a relatively high P/E - though not as high as the two firms you mentioned so I'd not expect forecast growth to be as high either.

But I am more interested in whether growth will exceed forecast in the next 2 years. That's where the return will come from and the company has a longterm history of exceeding expectations.

I don't know why you are focusing upon the acquisitions - most of which are either assets of liquidated oil and gas companies or startups in the renewables area - and too small to make an immediate impact upon the companies bottom line.

There is no mystery why growth over the last few years has been lower. The offshore oil division suffered alongside all other oil support companies.

Last year it's underlying operating profits fell by 10% whilst the other divisions grew underlying operating profits by 20%.

The offshore oil division is now a much smaller part of the company.

Stabilisation of this division will allow the other divisions to drive the growth of the company at a higher rate. Eventual return to growth of this division, albeit from a smaller base, will provide further upside.

I expect the forecast growth in profits of around 8% is about right for 2017 and a P/E of 19 is generous.

Forecast of similar growth in 2018 and a P/E of around 18.4 seems about right to me. But is the forecast right?

Longterm performance of the company and the 20% growth across the divisions excluding offshore oil last year makes this look a bit too conservative to me.

I expect upwards revisions of the 2018 forecast - but if I could tell you when, I'd also expect to be a lot more wealthy :-)

If I see that upside disappearing then I will change my mind and start to sell, but at the moment I see it as the most likely outcome and longterm risk to the downside as small.

I am a longterm investor and I don't tend to trade stocks so I would expect my view to differ from yours?

cheers

[roddiemac2] 15/5/2017 18:32

The long term strategy means that acquisitions may take a while before contributing ; some may need considerable investment.

[phillis] 15/5/2017 14:09

regular divis are great but high p/e s require significant profit growth - actual and potential
FSJ profit growth has been pedestrian in recent years when it has made a lot of acquisitions
Some of them clearly aren't contributing much to the profit pool

[roddiemac2] 15/5/2017 11:50

Phillis ,

In a rapidly changing world , there are very few companies that show serious long term potential . I still think FSJ is one ; having held for 15 years, I will continue to hold. As illiswilgig correctly points out , FSJ could surprise on the upside at any time ; trying to predict exactly when that would be is pointless. In the meantime , dividend growth means I receive good returns on my purchases at much lower prices. I am not alone in thinking this may be a share to hold for life.

[phillis] 15/5/2017 11:15

OK
the point about high P/Es is that you (certainly I) need high rates of profit growth year on year - something Fisher does not have
No material growth in eps over 4 years despite all the acquisitions

Each to his own!

[illiswilgig] 15/5/2017 09:01

Phillis,

thank you for your pointers. I've had a look at both DPH and ABC and they are interesting companies. I've added them to my watch list, though with P/E's of 27 and 34 respectively they are valued much more highly already than FSJ at 19. I don't have enough knowledge of the companies yet to know how likely they are to have more risk to upside than downside nor have I yet studied the accounts which as a LTBH investor is something I have to do.

I understand your target of £14 and wish you luck. I last bought FSJ when it dropped to around £10 and would/will not be adding more unless there is a significant drop but am happy to hold as I perceive current expectations for 2018 are conservative and I expect them to raise this at some point within the next 12 months - but as usual with FSJ it could happen any time.

cheers

[phillis] 09/5/2017 18:15

Intermittently
Too expensive at the moment but all things being equal I am a buyer in the 14s
Try DPH if you really want a high p/E AND profit growth
Or even ABC

[roddiemac2] 09/5/2017 17:29

Phillis,

They have stated that trading is in line with management`s expectations, and that growth ( like last year ) will be weighted to the second half. I see no reason to doubt that expectation. In answer to your question, I suspect neither . Management`s acquisition strategy is steadily laying the foundations for future growth . Investment in acquired companies will not always reap immediate benefits.

There were some sizeable trades north of 1700p in the third week of April; evidence that someone sees the long term potential.

Are you a shareholder?

[phillis] 09/5/2017 14:30

I see the filtered Q-ra-P is posting here ,no doubt trolling again

peculiar grammar RM!

EDIT
RM
Given the high rating and the regular and numerous acqusitions, yes I was expecting an improvement
Like for like profit has obviously gone down
Question is, is it the new businesses that havent performed or are they hiding a downturn in the older ones?

[roddiemac2] 08/5/2017 12:38

QuePassa,

!!--Phillis es mejor ignorado

[roddiemac2] 08/5/2017 12:34

Phillis ,

Were you expecting an improvement?

[bouleversee] 05/5/2017 14:38

Recommended in The Times today.

[quepassa] 05/5/2017 14:10

Phillis

HIJA DE CHINGADA. PUTA.

[phillis] 04/5/2017 13:04

no improvements in first half over prior year - despite the acquisitions

[roddiemac2] 12/4/2017 08:55

British scientists exploring an underwater mountain in the Atlantic Ocean have discovered a treasure trove of rare minerals.


The recent news that a mountain of rare mineral bearing rock has been discovered on the ocean floor bears witness to what is likely to be a race to mine at great depths . FSJ must have many of the technologies and capabilities that will facilitate the inevitable; there is likely to be enormous activity in our lifetime.

[illiswilgig] 22/3/2017 09:49

Just when you thought it couldn't get more exciting.........

...FSJ buys again.....

.....acquisition of the entire share capital of Rotos 360 Limited ("Rotos360") for an initial consideration of £1.5m in cash, with potential further consideration of up to £5.0m subject to profit targets for the three years ending 31 December 2019.

Rotos360 uses the latest technological innovation to provide solutions in the inspection, repair and reconditioning of wind farm rotor blades, primarily in the offshore environment and was established in 2013 as part of a UK Government funded research project to reduce the cost of operation and maintenance of offshore wind turbines.............

From the lack of detail I'd rather imagine that this is currently loss making or tiny profits. I don't think it's about more profit today. It's good positioning for the future with the UK currently world leader in offshore windfarms - and I expect that once the costs are brought down that offshore wind will appeal to a lot more regions around the world.

Right - back to sleep for now....

cheers

[illiswilgig] 02/3/2017 21:15

Phillis, thanks.

Err. Yes I'd probably agree with you that the costs of terminating the contract are not very exceptional.

Strange things accounting standards.

The Company would probably argue that they don't reflect 'normal' business. I guess that depends upon whether exceptional costs keep happening - then they aren't very exceptional.

But one contract more or less is not enough to make this company cheap. I don't remember this company appearing to be cheap - not in the last 10 years anyway.

cheers

[phillis] 02/3/2017 09:54

yes Illis, thanks
Have now read the entire RNS

Is a contract termination cost in Angola not a real operating cost?

Solid performance but as you say, i dont find the Company particularly attractive at current levels

[illiswilgig] 01/3/2017 20:23

what is the answer to my question? have I understood?

Phillis - the answer to your question is - No.

Have you understood? I'm not sure that you have? Probably not I'd say.

Note 4 should help you there. Also note 4 from the previous 2015 results will help with respect to 'Adjustment to provision for contingent consideration'.

There is also a helpful table in the Financial Review which shows how the effects of acquisitions, changing exchange rates and the lost contract affect both revenues and profits in 2016 compared with 2015.

Mind you. I suspect it won't help you find the company any more attractive at the current share price!

cheers

[roddiemac2] 01/3/2017 18:34

phillis ,
I suggest you speak with the FD ; I am sure he will clarify .

[emeraldzebra] 01/3/2017 13:00

feel they have been marking time for a bit too long compared to their market sector and are long overdue for improvement.

[phillis] 01/3/2017 11:46

what is the answer to my question? have I understood?