Foresight Share Discussion Threads

[cockneyrebel] 20/11/2010 10:41

I think charts are pointless on a stock that's in a bid situation imo.

The other point here is the big leap in earnings from this year to next year. Many small private investors look at historic earnings as their PE which in my view is wrong, you need to value fwd rather than back. So some are working on the 5.7p eps of last year.

Many investors look at the current year for their eps which is pretty reasonable and they are probably looking at the 8.2p eps for this year to base their valuation. But as Jim Slater points out in the Zulu Principle book, the time to look at a co is when the interims come out because that's the point a lot of investors start looking at the next years eps for their guide. With 12.2p eps forecast next year off of 8.2p this year I believe many investors uninitiated with FSG will see that as cheap for 50% earnings growth. Many investors don't realise that the 12.2p eps for next year is pretty much bolted on too with the recent £25m contract win. On that basis I expect FSG to rate up higher come the results on Dec 7th.

One other thing. With £10m sales last year, they have since won that £25m contract which comes in over 5 years. To my mind if you justs averaged that out you're expecting to add £5m a year on average so the broker forecasts of £13.4m and £16.8m sales in the next two years looks very conservative imo. And as a co, if you'd just won a huge contract like that would you really guide brokers to an EPS forecast that was going to be tight to achieve? If I was FSG I'd guide to a number that was going to be a doddle to achieve over the next 18 months and give myself an easy life.

On that basis I think the forecasts are very conservative which not only means upgrades if there was no bid but but means any bid would probably have to made higher than expected for the management to want to take it.

All in all I don't see these this cheap come Dec 7 results myself.

CR

[cupra kid] 19/11/2010 22:46

Fingers interpretation of the chart:

[nicedude1976] 19/11/2010 14:48

And I can't imagine people weren't buying when it was in the 30s ;)

[simon gordon] 19/11/2010 12:02

Been on the trumpet, spoke to a source in the industry, source doesn't reckon it's Standard Life, but didn't know who the bidder/s could be.

[dasv] 19/11/2010 11:49

CR - there may be some who have waited 7 years in loss and now get the opportunity to sell for a profit. It can be tempting to exit a perfectly good share at break even or modest profit because of a bad entry point.

[cockneyrebel] 19/11/2010 11:26

Can't imagine who sells here - worth this valuation without a bid and with results in a couple of week I'd have thought the market is going to see just how cheap these are then imo.

CR

[cockneyrebel] 18/11/2010 15:29

The market is re-rating today while FSG sit's still - in a firm market like this FSG are just going to command a firmer price from any bidder imo.

CR

[jakleeds] 18/11/2010 08:13

edging up, should be news any day

[jakleeds] 17/11/2010 23:09

My money is on at least one Indian company entering into the bidding for FSG. If it's not Mastek thenTata and Wipro are also technology partners with FSG, and are looking for acquisitions in Europe.

July 23,2010 - 11:05 AM

Transaction Note
Azim Premji's Wipro Technologies Limited provides comprehensive IT solutions and services, including systems integration, information systems outsourcing, package implementation, software application development and maintenance, and research and development services to corporations globally.

In Dec'08, Wipro Technologies acquired the Indian operations of Citi Technologies in a $127 Mn all cash deal. It also got into a five year contract with Citi for offering back office services. Wipro also bought Infocrossing in 2007 for $600 Mn.

It acquired loan origination software vendor - Gallagher Financial Systems Inc. in Sept'08, followed by the acquisition of Nokia's enterprise mobile unit in April'09.

Other Indian IT majors are also looking for overseas acquisitions. Earlier in the month, HCL Infosystems acquired 60% stake in Dubai based NTS Group for $6.5 Mn.

Infosys Technologies is also looking for small acquisitions in France and Germany to expand its European Footprint.

[badtime] 17/11/2010 17:31

Bought some more this morning at 127p

[interceptor2] 17/11/2010 15:08

Could we see an announcement on Monday, which would neatly tie in with the admission of the 224,718 share which are expected to become effective on Monday 22 November 2010. Or have they any more house keeping first.

Just idle speculation to be honest.

Regards......

[dealit] 17/11/2010 15:04

Does Standard Life have an IT outlet?

[davidosh] 17/11/2010 14:16

That article said talks had ben in progress for six months so it should be very near to a conclusion and I suspect the company wanted to sign up that major contract for £20m recently before getting very serious round the table with anyone.

[dealit] 17/11/2010 14:07

I agree and judging by the share price rise IMHO Vsoon.

[cockneyrebel] 17/11/2010 14:04

Breaking out - nice :-)

Perhaps bid news sooner that later.

CR

[dasv] 17/11/2010 12:30

Tieto: €970m market cap?

[lomax99] 17/11/2010 12:23

If Standard Life are the acquirer then I doubt we will see the best price, as they will be motivated more by streamlining their own internal systems than maximising the external potential for FSG's products, which are distinctly non-core to them.

[simon gordon] 17/11/2010 12:22

Tieto could certainly afford FSG:

[ir35] 17/11/2010 12:16

Could the bidder be TietoEnator? Focus signed a deal with them in March 2008 to provide software and development services including Focus360. Tieto are financial software house in Scandinavia (mainly Finland/Sweden) with a history of acquisitions - like Enator and Entra Data. it would make sense if Tieto have products that include some of Focus's software to just buy them out.

[simon gordon] 17/11/2010 12:01

Unisys would certainly pay more than Standard Life, hopefully the Standard Life approach will flush out someone like Unisys who can seriously sell 360 through their global sales channels. Sure looks like bad news for an already struggling Mastek.

Standard Life want to merge 360 with threesixty :-)

[cockneyrebel] 17/11/2010 11:52

Unisys looks the favourite to me imo.

The chairman is former Unisys, Unisys are customers, perfect fit, directors know each other well and the advisers being used suggest a big co imo.

CR

[dasv] 17/11/2010 11:43

CR - BLVN - Bowleven?

--

I bought another £3k FSG today. Small change for some of you guys I know but my sixth buy now.

[davidosh] 17/11/2010 11:22

We do not depend on Mastek for a bid or for overseas business in any event as they do not have an exclusive licence. The bidder is most likely to be a large software house or services company IMO.

[simon gordon] 17/11/2010 11:10

CR,

Mastek are no great shakes of a company and I don't see them getting loads of foreign contracts for FSG. I think the overseas angle could be a lot slower to happen than anticipated.

[jakleeds] 17/11/2010 11:08

Agreed, I'd rather there was no bid than for them to be taken out at under 2 quid personally.