Flowtech Fluidpower Share Discussion Threads

[rcturner2] 27/9/2019 15:48

edmund, I have held here in the past, I was lucky to get in close to 100p and sell significantly higher. There are certainly plus points to this company.

I prefer to look at a cash/debt adjusted PER and on that measure the current price seems high to me. Not everyone looks at things this way, so of course others will have a different view.

If you compare with say Zytronic (ZYT) another small solid business, you can see that there are good companies on single digit PERs with good yields (once you adjust for cash/debt).

[edmundshaw] 27/9/2019 14:20

So what is a reasonable PER for you, RCTurner? 5? 4? and a well-covered yield of around 8%? Did you listen to the presentation and take in the excellent underlying cash performance?

Not to say never, 80p can happen - similar ratings already have appeared elsewhere - but only if people think a major recession is on the way and the dividend will be under pressure. However, a lot of the business is driven by essential maintenance, so I find that a small probability scenario.

You might just have to do your buying a bit higher...

[shaker44] 27/9/2019 13:43

Disagree. Conservative management under promising and over delivering. We shall see

[rcturner2] 27/9/2019 12:27

Revenue and profits under pressure in H2 and the likelihood that there will be more sellers then buyers as the price drips down. This grew through acquisition which to an extent masked the real performance.

[rcturner2] 27/9/2019 12:17

I can see this dropping further from here. I think 80p could easily be on the cards.

[edmundshaw] 27/9/2019 11:50

I have added again as I think 105p is crazy. Tip-based rises and falls rarely stick in the medium term. In fact I have often used movement from tips to profit take or top up.

[edmundshaw] 27/9/2019 11:19

They have defended margin in the past, and passed on cost increases. So I am moderately comfortable that they can do the same in the future...

[fillspectre] 26/9/2019 23:23

Not overly keen on FUM and KMK that are tipped. Somero Enterprises was a good tip but then they themselves ran into difficulties. Right now if you will allow me some cross board talk I would recommend you guys take a look at SCE. Look at the news flow starting July '19 and then research the recent Company history since they moved the factory to Knowsley. I am invested so am biased - so please DYOR.
Meanwhile I have to say at the price it dipped to today I was very tempted to instantly buy some more FLO - or swap an ISA holding for a Pension holding. 2.13p per share interim dividend on offer next week. My biggest concern with FLO is can they defend margin as well as turnover. Fils

[goldry] 26/9/2019 20:07

Seems to me that his tips often go south, so by the same reckoning a sell recommendation is worth buying on once the lemmings have sold off. I think this will do well in the long term, I'm already invested but taken the opportunity to top up today.

[thorpematt] 26/9/2019 19:45

All Simon's article has done IMO is to provide an opportunity for patient investors to buy into an outstanding quality company led by excellent management.

It's not often the case that these opportunities arise. Make the most of it, be patient and reap the rewards.

[beckymclarke] 26/9/2019 13:48

Those 7000 shares that just went through were my buy not sell! Looks like a bounce ??

[shaker44] 26/9/2019 13:06

Seems a solid well managed company with risk spread over many essential product lines. Well placed to stand buffeting from brexit,sino-us issues and weak European economies. Not immune though and progress will inevitably be slower. But happy to keep in my portfolio.

[petewy] 26/9/2019 11:40

Thanks Ed. My sentiments for staying in.

[edmundshaw] 26/9/2019 10:57

I reduced earlier but at these prices am buying back. It might go lower, so I am not in a hurry, but I too like the sound of the new management. And the dividend is decent and quite well covered

[the oak tree] 26/9/2019 08:58

You make some good points Fills.
I'm not a holder but this is very much on my radar.
Wouldn't worry about ST , as he is often wrong.
But this is a nevous market, especially for companies that could be affected by a general downturn from Brexit. So Im on the side lines and not wanting to catch that falling knife as they say.

GLA

[fillspectre] 26/9/2019 07:32

Thanks shaker44. The way I see it - it is a lot easier to load up on shareholders' equity and go on a spending spree. Whilst this is happening some commentators cotton on to the fact that outwardly it is a great growth story. The share is recommended and the price increases. Then the music stops. It is revealed the purchases weren't quite as keen and well researched as previously made out. The person leading the buying frequently disappears as they don't necessarily want to be pinned back to doing the assimilation and finding the cost savings that will turn the enlarged business profitable. Others more suited or more willing take over the reins and start the hard business of running the business as well as they can. The story isn't as compelling and interest is lost. Which is the better investment? Difficult to say - if you can ride the upwave and get out near the top from a purely share price view it has to be the former. If you want to ensure you invest in a business that may have a long term future and may put a floor under the share price with actual profits - could be the latter. Fils

[shaker44] 26/9/2019 04:47

I entirely agree fills about ST and your flo prognosis. More upside than down imo

[fillspectre] 25/9/2019 23:55

mmmmm! I bought into Flo because of reading about them in ST's articles.
However I've read enough of ST to know he can be wrong footed just like anyone.
Having read the latest article I notice Simon's advice to take profit is based on his fear that trading conditions could be poor long into 2020. He does note profit up and that debts are expected to be significantly lower by end of 2020.
Perversely I'm feeling the opposite. I like the honesty from the CEO and CFO. The CEO's predecessor went on a buy and build strategy - but the new CEO and CFO are dealing with the harder task of making the enlarged entity work. They seem to be cautious and understated. Trading conditions are probably likely to be difficult, but currently they are profitable and there is a dividend. Plus the sort of market they are in can only be downturned for so long before overdue maintenance and replacement activity starts to have to be resumed. Having not sold out before the interims - I'm wondering if there is any point doing so noq - can they get much lower? Fils

[podgyted] 25/9/2019 15:45

Simon Thompson (IC) has advised to sell. This'll mess up the share price for a bit so I'm out.

[edmundshaw] 24/9/2019 10:05

Good underlying cash performance.

Well worth watching the short but sweet management video:


Obviously there are likely headwinds coming. But the new management seems to be on top of things, and synergies and debt reduction are clearly available to soften any trading downturn. And a decent yield to tide us over.

[this_is_me] 24/9/2019 08:00

That amounts to a mild profit warning, however there is no sign of a drop in market share and it certainly gives the impression of a well run company adapting to changed circumstances.

[petewy] 24/9/2019 07:55

Divi up as well/Results look OK. I am in cheap so a divi raise is goog for me;
GROSS MARGIN REMAINS STRONG AT 35.6% (H1 2018: 34.3%)
· UNDERLYING OPERATING PROFIT OF £6.1M (H1 2018: £5.7m)
· STRONG CASH GENERATION; NET DEBT REDUCED BY £1.1M in HY2019 AFTER £1.6M OF PAYMENTS IN RESPECT OF PRIOR YEAR ACQUISITION ACTIVITY (H1 2018 SAW NET DEBT INCREASE BY £3.0M)
· DIVIDEND INCREASED BY 5.0% TO 2.13 PENCE PER SHARE

[shaker44] 24/9/2019 05:18

I agree. In the leaky City, no buying ahead of results is not a good sign. Gotta hope for a pleasant surprise

[fillspectre] 23/9/2019 21:38

I'm beginning to get the feeling the numbers may be lacklustre tomorrow - don't know why. Just doesn't seem to be much interest in this share at present. Come on Flotech Fluidpower prove me wrong - has "harvesting the synergies" started to have an effect? Or has the unwinding of the Brexit stockpiling been the undoing of Q2? Fils