Fisher (james) & Sons Share Discussion Threads

[illiswilgig] 29/9/2020 21:17

Boule - Yes, I can sympathise.

I am not sure that I am the right person to answer your questions.

At times like this I think we all question our decisions and wonder does the market know something that we don't?

There has been no more news since I wrote my last note - which makes it hard for me to add much.

To recap - I did write:

'For the bears there is plenty of gloom surrounding the poor performance of the marine support division, about half the company by sales - but only 25% of profits, currently enjoys a return on capital of below 5%. Some underperforming assets there that need sorting out?'

It seems to me that this division started to go off the rails a couple of years ago. The pandemic has only hastening it? It seems unfair to blame the new CEO for decisions made before he arrived?

On the other hand.

If we are to blame the management for the poor performance at Marine Support - should we not be crediting the management for the outstanding turnaround at offshore oil? With turnover, profit and ROCE all sharply up during a pandemic?

Which begs the question - can they do the same with Marine Support?

If they can - then FSJ stands a good chance of being rerated as it returns to substantial growth.

But that might not happen - and even if it does a marine services company is not exactly a red-hot tech stock? It's clear that the market won't be rerating this unless and until there is positive newsflow and the figures improve a lot.

I will be awaiting the next results with bated breathe for any sign of progress.

And in the meantime I am afraid that only you can decide whether holding on or selling is the right decision for you.

I am sorry that I can't be of more help,

cheers,

Illis

[bouleversee] 29/9/2020 10:02

I'm getting rather uncomfortable about holding it, Illis. From being one of my best performing holdings (and one of the largest) it is becoming one of the worst. Something seems to have gone wrong with the management. What are they doing to adapt their business to the new prevailing circumstances?

[illiswilgig] 28/8/2020 11:26

Well what to think?

Having read the interims I find it hard to put into words - except as I predicted, and I didn't need to be a rocket scientist to predict - good in parts.

Or, according to your half full or half empty view, bad in parts.

The current share price values Fisher fairly in view of its current business (order book) the level of debt and intangible assets on its balance sheet.

It's on around 18x forecast earnings for this year and 14x earnings for next year (21).

Whether that fully values growth prospects requires a crystal ball. Mine is currently out of service.

The interim results, comprehensive though they are, don't provide much reassurance on future growth. But to be fair, times are not normal and why provide a hostage to fortune if you can't know whats going to happen in the next 6months let alone the next year or two.

For the bears there is plenty of gloom surrounding the poor performance of the marine support division, about half the company by sales - but only 25% of profits, currently enjoys a return on capital of below 5%. Some underperforming assets there that need sorting out?

For the bulls, the specialist technical division has made good progress despite coping with a pandemic, profits down 20% still a healthy return on capital at above 13%. Tankships, the cash cow, plods onwards - and remained profitable even during may and june, which is good news in an ever declining market. roc reduced but still at 27%. The gold star goes to Offshore Oil - once the problem child - but with sales, profits and roc all up. Though with roc of 8.6% its acceptable but more to do?

It's a no brainer that sorting out Marine Suppoert is the first objective. It looks like the pandemic coupled with the negative oil price spike has accelerated an already struggling division.

To be fair the company recognises this, apparently headcount reductions have already been made, and Fisher has a long and creditable record of adjusting its business when the world changes.

The remarkable turnaround at offshore oil under the current conditions is a good example of their ability to do this well, with artificial lift pumps for end of life wells, specialist cutting for decommissioning rigs and compressor environmental support to renewable project construction all cited as growth areas.

Should they achieve anything remotely similar with marine support then the current share price does not fully value the prospects, nowehere near.

The restoration of the interim dividend is a signal that the board don't see immediate problems and you might take it as a signal of confidence in the future. I am sure that they would want you to.

I like the potential of the subsea, ROV, defence, deoommissioning and renewable markets that the company is developing. I am confortable holding this share at the moment - unlike many shares it has not staged a recovery which may prove premature. So I think that the risks are weighted towards the upside in the short term, though we will most likely have to wait for the full year results for a clearer outlook, and I remain bullish in the medium term.

cheers

Illis

[our haven] 27/8/2020 20:57

Lasata, back to were we were before the results were announced. Seems to me as if the understanding of them was that they were good results.A strange market at the moment.

[bouleversee] 26/8/2020 15:03

I'm not surprised, Roddie. Who has time to read all that lot? Certainly not me.

[roddiemac2] 26/8/2020 14:27

Porsche,

Don`t get too excited . I don`t have rose tinted glasses. I am too busy to read the detail at present.

[porsche1945] 26/8/2020 14:19

2roddie
We await with bated breath

[bouleversee] 26/8/2020 12:31

Perhaps the market doesn't like the fact that the directors IIRC were being paid bonuses when one div. had been axed and the next reduced. I gather they are being chastised for paying even a reduced div. after taking the furlough money. I don't know what pensioners are supposed to live on. A huge chunk of my retirement income has disappeared but I still have my commitments like everyone else.

[roddiemac2] 26/8/2020 08:36

I will comment on the results this evening.

[salpara111] 26/8/2020 08:15

I had taken a small Stake a few weeks back at 1150.
I have given up trying to understand market reactions to results these days.
Sometimes I think a company's results look awful and the share heads for the skies.
I thought the results were as good as could have been expected and given the share price was pretty bombed out that we would get a rise!
I am holding for now as I see little additional downside from here.

[lasata] 25/8/2020 12:43

Our Haven...agree.
Think market will like it before long

[our haven] 25/8/2020 09:15

Obviously I had different expectations to the market. The fall is not as bad as it looks as we had a very late rally last night accounting for half the fall.

[our haven] 25/8/2020 07:55

Overall I think that the market will like. We will see shortly on opening but the numbers and outlook are not unexpected, indeed better than I thought they would be

[lasata] 25/8/2020 07:39

What do people feel about today's trading statement?

[illiswilgig] 17/8/2020 09:16

Apologies,

Interims are expected on the 25th August (not the 22nd as I mistyped)

Just testing!

cheers

Illis

[illiswilgig] 11/8/2020 14:33

Hello Roddie,

Well thanks, as well as can be expected. Likewise Roddie - hope you are well?

Interims expected on 22nd August?

I don't expect them to reveal a lot as Q2 of this year has been such an upheaval around the globe and the return to 'normal' whatever that turns out to be will not be as quick as many had hoped or assumed.

Indeed - in the old economy markets of energy and transport there may be no return to the old normal? The pandemic may have accelerated some changes that were already in progress?

The current shareprice is certainly disappointing - but I agree with Roddie, not that surprising.

Though I don't want to over-rationalise it. There is a lot about shareprices at the moment that is far from rational. Renishaw share price at around 94x profits in the year just ended, and 56x for the year to Jun21? (Yes, I've reluctantly been a seller.) Whereas Fisher is on 17x the year to Dec20 and around 13x for the year to Dec21. Which you may consider as fairly valued?

I still think Fisher is well positioned in emerging marine technologies and markets and has the potential for good future growth.

One thing I have learned about Fisher is that the shares rarely, if ever seem to be a bargain. So the current fair value - may - in time prove to be a good buying opportunity as Roddie suggests. Accordingly I've been adding more, most recently at around 1200. But I admit I started buying too soon, and don't see adding more unless the price falls signficantly further for no particular reason.

In the short term there will be a lot to do to sort out the bits of the business where the market has imploded and focus upon the bits for future growth. Much depends upon whether you think the management has the ability to do this - something that Fisher has done very well on previous occasion.

I might suggest that buying is for the brave or foolish - to soon to know which of those I am yet?

I wish everyone well and look forward to reading the tea-leaves on the interims soon.

cheers

Illis

[bouleversee] 11/8/2020 12:12

Pleased to see the share price up a little bit today. A helluva long way to go, however.

[roddiemac2] 11/8/2020 10:20

Hello debs,

I hope you are keeping well.

You are correct when you say" it could get worse again before it gets better" In general terms , the future is unclear. Almost anything could happen. We have not been confronted with a situation like this before. Yes there will be bargains, but I am not inclined to look at new investment ideas until things be come clearer. I have a fairly simple , and therefore sustainable , life style. I will content myself with what I have for the time being.

email when you have the time.

[debsdowner] 08/8/2020 18:09

Hi Rod,

I remember when these were in the pennies and this was one of the shares you held I looked at them at the time and regretted not following your advice, I have to confess I didn't really understand the company, I specialized in retailers at the time. When retailer ran out of steam I ploughed into electronics. We both know where that ended up !

Things are quite grim now with both the coronavirus and a world meltdown but there will be bargains to be gained.

You are a canny investor Rod hope you are keeping well.

Lot on at the moment but hope to chat sometime in the future off bulletin boards in respect of various matters which I don't want to post online.

Although the general marker has bounced back it could get worse again before it gets better I don't know what your view is of the world economy ?

[bouleversee] 08/8/2020 16:52

OK, Roddie. I'll keep my fingers crossed. I just can't understand why they couldn't pay even a small amount of dividend. What are pensioners supposed to live on?

[roddiemac2] 08/8/2020 15:14

boule,

I see no reason to suspect a change in management`s attitude to their shareholders. It remains to be seen how much the current crisis is affecting the business. Results at the end of this month should inform.

Take care.

[bouleversee] 07/8/2020 15:11

I can't bear to sell when the price is so low though no doubt I shall regret not doing so. Like most women, once I fall in love I find it difficult to admit that the object of my affection is not worth it.

[suetballs] 07/8/2020 14:55

boule sold out today. Disappointed with recent performance. Tried something new in d4t4.
My holding was fairly small - good luck with yours.
Suet

[bouleversee] 07/8/2020 11:52

Thanks, Roddie. Pretty well, all things considered, but exhausted by having to do all my own housework and gardening, not to mention trying to keep track of the financial situation and the continuing domestic dramas, the latest being some of the roof falling off in a place difficult to get at. I finally got the exploded conservatory roof panel replaced yesterday but still have the blind damage to sort.

FSJ is a real bummer in view of the large holding spread round the family, not picked up at particularly cheap prices but mostly held for a long time. I really don't understand why it has dropped so much unless it is that it was overvalued in the first place. I must say I thought their p/e ratio was too high to make it attractive.
The directors don't seem to have tightened their belts though IIRC and I get the impression that the company's ethos may have changed under the new directorship and may be more interested in their own advancement and rewards than the interests of their shareholders, unlike the family. In other words, I have lost faith in them. How about you?