Halma Share Discussion Threads

[apad] 08/12/2011 22:18

sp@340
PER 16
Free Cash £111m
yield 2.8%

still looks reasonable value to me.

apad

[contrarian2investor] 30/11/2011 17:43

I picked up some HLMA @3.425p today. I won't be posting much GLA.

[apad] 23/11/2011 20:44

HALMA has 41 operating companies, which confers robustness.
apad

[apad] 23/11/2011 19:29

Ess...
I think the market might well get worse, but my view is that it is the financial market that has the logistic problem. Banks & pension funds have to buy national debt 'cos its "safe"! This is a complete bind.
Companies like HALMA have a technological niche that is difficult to challenge and a devaluing pound increases the value of the asset (I have lost a depressing number of good companies in 09/10 e.g. Chloride) and any foreign earnings.
Clearly if the whole world goes to hell in a hand cart all bets are off, but my £ was devalued by 30% and earns no interest so I'd rather have HALMA and its ilk along with big oil, big pharma and the companies that service them.
To paraphrase L P Hartley "The future is a foreign country, they do things differently there".
apad

[essentialinvestor] 23/11/2011 16:32

Can sentiment for the market get much worse APAD?,
I had to ask Aleman his view, as on SHA it's the end of the world.
However it's very difficult to see any upside currently
and hosede's view is looking increasingly valid.

I suppose based on WJ's view HLMA are investing for growth,
hopefully he is correct and there is nothing else that is not apparent
at this stage.

[apad] 23/11/2011 16:18

Increased holding at 311.4
apad

[essentialinvestor] 23/11/2011 10:31

Apreciate your thoughts WJ as always.
Good luck with your holding.

This was on my buy list, will hold off for a while now.

[wjccghcc] 23/11/2011 10:24

APAD - both. It's hard to grow sales without increasing working capital.

[essentialinvestor] 23/11/2011 09:55

Yes, just to clarify I do not see debt as an issue.

I was just suprised at the level - which at least one
of the analysts has also highlighted.

[apad] 23/11/2011 09:49

So, is it the increase in working capital?
Due to acquisitions? Due to stock increase?
apad

[wjccghcc] 23/11/2011 09:47

I have a mid-sized holding in HLMA but a much bigger one in DPLM which I'm a big fan of as you know.

I like HLMA in that their underlying markets have structural growth and are driven by health and safety regulations. They're well run and are unlikely to surprise on the downside. Having said that, the share price is volatile and tends to have a high beta so it usually works to buy the dips and sell the peaks.

I'm not worried about the net debt as it's only 50% of the annual free cash flow and the working capital increase will probably reverse at some point.

Currently I have a buy target in the 270's and a sell target around 340p.

[apad] 23/11/2011 09:45

HLMA tend to earn less in the second half. Back of an envelope says that if we assume no increase in earnings over the 2nd half the PER is about 14/15.

Also, thanks WJ.

apad

[essentialinvestor] 23/11/2011 09:22

The point was also raised in the FT this morning,
so it appears the level was higher than some had expected.

[essentialinvestor] 23/11/2011 09:21

Thanks for the detail WJ.

I was expecting the statement to read more like
your favourite DPLM which appears to throw off cash.

Realise it's a different operating model.

May I ask your view on HLMA? -
aware you are very good on detail.

Many thanks

[wjccghcc] 23/11/2011 09:13

EI it's in the cashflow statement.

64mm operating cashflow

14mm increase in working capital
13mm tax
19mm acquisitions
11mm capex
20mm dividends
3mm treasury shares purchase

gives a net debt increase of 19mm (okay I'm missing 3mm in rounding).

[apad] 23/11/2011 08:57

Don't like debt - need geswan.
apad

[essentialinvestor] 23/11/2011 00:24

Yes aware of that WJ, however net debt was £37 million at the year end on
02/04th.

Even allowing for the acquisition spend and final dividend payment,
they made over £50 million in the half year - how is net debt now
nearly £60 million?.

[wjccghcc] 23/11/2011 00:03

19 million spent on acquisitions in 1st half.

[essentialinvestor] 22/11/2011 17:48

Can anyone explain the debt level
being higher than I would have expected?.

Fall in cash conversion a possibility?, and/or some other factor.

[apad] 22/11/2011 11:09

Noticed that Ess... Also Debt up 50% approx.
However, given the £'s likely future this is still my kind of share - as long as the PER is less than 20.

apad

[essentialinvestor] 22/11/2011 08:21

There was one comment about OEM's in the Health Diagnostics sector
and some delays, that was the one specific cautious comment.

[elmfield] 22/11/2011 08:14

Not bad;
but I am in no rush to buy more.

[apad] 22/11/2011 08:07

Ess

KENZ, AZN, RSW, RDSB, RB., PNN, CRDA, WEIR, ROR, AGK, ITRK, ENQ, SPX, BG., HLMA

Are all in the range 3% - 9% of Stairway Portfolio

apad

[apad] 22/11/2011 08:03

Ol' Dependable chugs on :-)

Not sure I'll get my dip to top up though. Sigh.

apad