FT - 31/1/25:
HOLD: Texas Instruments (US: TXN)
The semiconductor manufacturer is exposed to the cyclical automotive and industrial markets, writes Arthur Sants.
Texas Instruments makes analogue semiconductors used in cars to regulate voltage and measure temperature. They are also used in speakers to amplify noise, wireless devices to convert radio signals, and scanners to interpret light waves. Its biggest markets are industrial and automotive.
As a result, Texas Instruments is cyclical in its performance. It is struggling with subdued demand in automotive and industrial. In the three months to December, revenue fell 2 per cent year-on-year to $4.01bn (£3.21bn), while operating profit was down 10 per cent to $1.38bn.
There was a hope that Texas Instruments would be the first among peers to recover as it was one of the first to correct. However, broker Jefferies said this “isn’t looking to be the case, with auto still correcting further and no signs of Industrial recovery yet”. |
FT - 29/1/25:
ASML said that its net bookings in the fourth quarter, which includes orders placed by customers but not yet delivered, hit €7.1bn, far higher than the €4bn analysts had expected, according to consensus estimates from Visible Alpha. Of that figure, orders for its “extreme ultraviolet lithography” (EUV) machines — its most advanced tools — made up €3bn, also well ahead of analysts’ forecasts.
Overall net sales for the fourth quarter grew 24 per cent to €9.3bn, while the group reported net income of €2.7bn, slightly ahead of estimates.
Strong demand for production capacity for AI chips is offsetting an otherwise lacklustre semiconductor market, ASML chief executive Christophe Fouquet said. |
Bit like the UK then.
Strong share price movement this week
hxxps://www.thearmchairtrader.com/uk-shares/gooch-housego-revenue-down-demand-recovery-on-horizon/ |
FT - 10/12/24:
Wendy Cutler, vice-president of the Asia Society Policy Institute and former acting deputy US trade representative, predicts the return of Trump is likely to cause paralysis in terms of executive decision making. “My sense is businesses hold off and watch the developments before making serious commitments.” |
Morning Wad,
I'm guessing it's 50/50 that 25 gets downgraded. The outlook statement appears heavily hedged. Listening to the conference call they are not losing clients but that the Industrial sector is sluggish and expected to pick up in H2. If it doesn't they could warn. |
Thanks for those.
The Cavendish FY26 figures suggest an EPS way ahead of this years 12.7p (ignoring the loss of the discontinuing figures. Such future predictions always seem tenuous for small caps, there are so many variables between now and 2 yrs time.
Maybe the outlook optimism will put a stop under recent share price weakness? |
 GHH - 3/12/24
Despite this positive overall outlook for the Group, we remain cautious about some supply chain and commercial headwinds in the near term. The labour markets for talent in both the UK and US remain competitive leading to some supply side challenges that continue to frustrate the recruitment of the required talent, especially in engineering and technical positions. Global supply chain constraints, although better than in the recent past, continue along with an inflationary environment for wages, raw materials and energy all require diligent attention and agility. Whilst price increases have been passed onto customers in FY2024 to address most of these cost increases, cost inflation continues to impact the business and the ability to fully offset all cost base inflation through pricing actions is becoming more difficult in certain areas.
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Cavendish - 3/12/24
Forecasts: No changes to our FY25 forecasts, recently updated for the acquisition of Phoenix Optical. We introduce FY26 forecasts based on revenue growth of 4.4% and margins firming to 11.1%, which drives adj PBT of £15.8m, while EPS of 47.5p shows YoY growth of 17%. With an improvement in cash generation, we look for year-end net bank debt further reducing to £7.8m. |
Simon Nixon - 1/12/24
...while we can be confident that Trump will impose tariffs, if only because he needs the revenues to help fund his tax cuts, how he goes about delivering them will matter. As this Foreign Policy piece explains, the president has wide authority under various US laws to impose tariffs where he sees risks to national security. Nonetheless, all would require some degree of legal pretext, which would take time to assemble, would be subject to legal challenge, and would provoke retaliation. On other hand, an across the board tariff of 10-20 per cent, such as he proposed during the campaign, would require Congressional approval. It would also be compliant with World Trade Organisation rules since it would be non-discriminatory, so the rest of the world would have less excuse to retaliate.
What all this means is that despite all the headline grabbing social media posts last week, we are still not really much clearer on the plot lines for Season Two of the Trump Show. Over the coming months, his proposals will evolve into more detailed policy initiatives which will rattle the markets. As this rather technical piece by Richard Baldwin explains, much of the global economic adjustment to higher tariffs will be borne by the currency markets in the form of a stronger dollar. But there is still plenty of scope for Bessent to bring his calm and rational head to bear in the interests of global trade and financial stability.
Of course, what one is left with in the meantime is uncertainty - and as Goldman Sachs notes, that uncertainty may be already be having a chilling economic effect as a result of reduced investment and capital expenditure. That is likely to be a particular issue in Europe, which is braced at the very least for tariffs on its auto sector. As a result Goldman has reduced its forecast for euro area growth next year to just 0.8 per cent, compared to a market consensus of 1.2 percent. |
Odyssean - 28/11/24:
In August Gooch & Housego released a trading update downgrading its full year expectations, driven by the slippage of certain orders due to supply chain delays with key partners. Gooch shares also suffered through the period being one of our few positions listed on AIM, where concerns around any change in business relief rules weighed on sentiment. Despite these short-term and technical issues, we continue to believe that Gooch is making good progress. The new CEO has set out an ambition to double group margins to 15% through self-help, portfolio re-shaping and growth. Early signs are positive on progress on all of these areas despite the mixed macro environment. The weakness in shares through the period have left the group trading on c.1x EV/sales, roughly half its long-term average, and undemanding for a business which we believe has the potential to generate 15% operating margins and grow in excess of GDP across the cycle.
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Gooch & Housego
% NAV: 5.8%
Sector: Industrials
Manufacturer of photonics solutions for a variety of end markets.
Gooch posted an inline H1 trading update in April, noting a robust forward orderbook despite ongoing tough end markets. Unfortunately, later in the period the group downgraded full year expectations due to certain orders being pushed out into the following year on the back of supply chain / third party delays. We remain of the view that Gooch is on the right track and there are some good growth opportunities ahead of it. Management is making progress on their self-help plan to materially improve margins through simplification of the group and operational efficiency, whilst a more commercial approach to R&D has landed well with customers suggesting stronger organic growth to come. Shares remain well below their long-term ratings, and we see potential for this discount to correct as delivery of this operational potential comes through and end markets become more favourable.
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The deliberate shift we made in the portfolio towards the industrial sector, especially smaller electronics companies in the latter part of 2023, was in retrospect, from a share price perspective, premature - although we had missed the worst of many share price declines, the trading conditions continued to deteriorate further than we had anticipated and in the short term had been insufficiently offset by self-help we had identified. However, we believe that we have secured highly strategic stakes in many of these companies, where there is very substantial upside to come as the earnings cycle turns and investor sentiment improves, or alternatively the M&A "animal spirits" rise again. |
GHH covered from 46-minute mark:
Vox Markets - 8/11/24
The Exchange with Chris McVey of Octopus Investments |
ASML issued a warning a few weeks ago.
Trump's tariffs could dampen industrial investment until there’s a clearer path forward. Given the current uncertainty, I’ve reduced my position and plan to hold off until 2025 to see how things develop. |
Yesterday, MGAM warned of weaker demand, I think their materials are used in the Industrial sector:
2024 Outlook
Market conditions have weakened during the second half and we are now seeing a further deterioration in our outlook for the fourth quarter. Our outlook for constant currency revenue growth for the full financial year is now around 3%. Together with additional FX headwinds, we now expect an adjusted operating profit margin for the year of c.11.4%. |
One of the GHH team in the Photonics 100:
Stuart MacFarquhar
Another product of the prolific Optoelectronics Research Centre at the University of Southampton, Stuart MacFarquhar works in advanced photonics research and design at G&H Photonics, the celebrated Somerset-based manufacturer established as long ago as the 1940s to make crystal optical components used in microscopes and binoculars.
Dr. MacFarquhar is working on two projects funded through the EU Horizon and UK Innovate programmes. The VISSION project is developing the heterogeneous integration of active devices with silicon nitride PIC devices using micro-transfer-printing technology, while Next-2Digits focuses on the fabrication of silicon photonic chips with graphene photodetectors. For end-of-project applications, it is hoped the transfer from free-space or fibre-optic systems to a PIC platform will represent a vast decrease in device scale.
Stuart MacFarquhar’s published papers include 'Nonlinear Characterisation of Laser Processed Polysilicon Waveguides for Integrated Photonics' and 'Nonlinear properties of laser-processed polycrystalline silicon waveguides for integrated photonics'. |
With the AIM IHT uncertainty now resolved, the stock may have room to advance, especially following a stable trading update and recent acquisition. At 11.5x 25, the valuation appears attractive if the numbers are proven up, with 26 being the likely inflection point where the new strategy could begin to deliver tangible results. |
EIN Preswire - 30/10/24
Opterro, Inc. and Gooch & Housego (G&H) Sign Memorandum of Understanding for Cooperation in Fiber-Optic Sensing
SILICON VALLEY, CA, UNITED STATES, October 30, 2024 /EINPresswire.com/ -- Opterro, Inc. (www.opterro.com), a leader in advanced fiber-optic sensing solutions, and Gooch & Housego PLC (G&H) (www.gandh.com), the specialist manufacturer of photonic components and systems, are pleased to announce the signing of a Memorandum of Understanding (MoU) to explore cooperative opportunities in fiber-optic sensing technology. This collaboration aims to combine Opterro’s expertise in fiber-optic distributed systems with G&H’s high-volume manufacturing capabilities for high-reliability applications, addressing the needs of industry and government customers across various sectors.
Under the terms of the MoU, the two companies will focus on leveraging Opterro’s i*Sense® product line, including its popular d*Sense®, LiteSense™, UltraSense™, FiberBlade™ and FyberSpace® solutions, to serve a wide array of applications, ranging from industrial monitoring and defense to energy management and medical diagnostics. The partnership will initially investigate commercial feasibility, with the intent to develop a long-term supply agreement that facilitates the expanding global distribution of Opterro’s advanced sensing systems and end-to-end solutions.
In conjunction with this MoU, Dr. Stratos Kehayas will join Opterro’s board of directors as an observer, contributing with his extensive experience in photonics and fiber-optics. |
Cavendish - 30/10/24
-In FY25E the acquisition will contribute for 11 months and is expected to generate £7.0m in revenues. The business is expected to have and adj EBITDA of £0.4m, which after £0.1m of depreciation and additional interest of £0.3m will results in the acquisition washing its face.
—Phoenix has a strong and growing order book and GHH is expected to facilitate an acceleration of delivery schedules. The anticipated synergies in St Asaph, plus cross selling and supply chain opportunities are expected to materialise during FY26E.
—We increase FY25E net debt by the initial consideration of £3.4m to £15.0m, with little anticipated effect on net working capital. |
Phoenix Optical |
WSJ TV - 15/10/24
This $10M U.S. Army Laser Melts Drones With $3 Beams | WSJ Equipped
In Ukraine and the Red Sea, low-tech drones are changing the way wars are fought. The U.S. and other countries are investing in a new and inexpensive way to retaliate: lasers. Compared with traditional weapons, lasers present some key challenges: they have a shorter range, limited power and can be harder to fix when issues arise.
WSJ explains how the BlueHalo LOCUST laser weapon system works and why the tech is so difficult to perfect. |
One of G&H ITL's customers, Endomag, was taken out for $310m.
Endomag - 25/7/24
Hologic, Inc. (Nasdaq: HOLX), a global leader in women’s health, has completed its previously announced acquisition of Endomagnetics Ltd (Endomag), for approximately $310 million.
G&H ITL
At the start of the project, Endomag was a small, UK-based start-up spun out from University College London (UCL) and University of Houston, Texas. They had developed an initial concept which, whilst highly sensitive, required the use of liquid nitrogen and a superconducting quantum interface device (SQUID). ITL was tasked with transforming the proof of principle prototype into a commercially viable, production-ready, benchtop medical device.
Could be a good in to Hologic a $19bn US healthcare company: |
Shweta Jadhav - 25/10/24
𝐀𝐜𝐨𝐮 9852;𝐭Ү48;-𝐨⻐9;𝐭𝐢𝐜 𝐃𝐞𝐯𝐢 9836;𝐞Ү52; 𝐌𝐚𝐫𝐤 9838;𝐭 𝐢𝐬 𝐞𝐱𝐩𝐞 9836;𝐭Ү38;𝐝 𝐭𝐨 𝐫𝐞𝐚𝐜 9841; 𝐔𝐒𝐃 𝟗𝟒𝟖.𝟓20784; 𝐌𝐧. 𝐛𝐲 𝟐𝟎𝟑𝟎, 𝐚𝐭 𝐚 𝐂𝐀𝐆𝐑 𝐨𝐟 𝟕.𝟐𝟒% 𝐝𝐮𝐫𝐢 9847;𝐠 𝐭𝐡𝐞 𝐟𝐨𝐫𝐞 9836;𝐚Ү52;𝐭 𝐩𝐞𝐫𝐢 9848;𝐝.
𝐅𝐨𝐫 𝐟𝐮𝐫𝐭 9841;𝐞Ү51; 𝐢𝐧𝐟𝐨 9851;𝐦Ү34;𝐭𝐢;𝐨𝐧, 𝐜𝐥𝐢𝐜 9844; 𝐭𝐡𝐞 𝐟𝐨𝐥𝐥 9848;𝐰Ү42;𝐧𝐠; 𝐥𝐢𝐧𝐤:
The acousto-optic devices market is growing rapidly, driven by demand for advanced optical modulation and laser systems across telecommunications, medical, and defense sectors. These devices, which use sound waves to modulate light, are valued for their precision and reliability in applications like signal processing, laser scanning, and material processing.
Innovations in acousto-optic materials and improved device efficiency are further expanding the market's applications. As industries seek compact and versatile optical solutions, acousto-optic devices are expected to play a pivotal role in enhancing system performance and enabling new technological advancements.
𝑪𝒐𝒎𝒑 9942;𝒕ү46;𝒕𝒊;𝒗𝒆 𝑳𝒂𝒏𝒅 9956;𝒄ү38;𝒑𝒆;:
1. G&H (Gooch & Housego)
2. Isometric
3. Brimrose Corporation of America
4. Harris Corporation
5. AMS Technologies AG |
Bought my first tranche yesterday.Excellent recovery stick now I remember the days this was 40p! |
Glad to see them turning the A&D arm around, it had been the problem arm of the business prior, I might get back in here but as mentioned before I'll keep my powder dry until after the Reeves budget. |
Can't really argue with the update. |
Trading update this week yes chaps ? |
Value,
Yes, it's a sitting duck.
I hope it doesn’t happen, and they can have the opportunity to grow and push the share price beyond its previous all-time highs. |
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