Haynes Publishing Share Discussion Threads

[netnut] 18/11/2015 12:31

Price drop of 5p at time of writing any news anyone knows of?

[profdoc] 06/11/2015 09:14

Following the AGM I wrote a 1700 word report. Obviously I can't post it all here - but you may find it useful if I post some of the paragraphs here.
Glen
Haynes Publishing – yesterday’s AGM
Boy am I glad that I doubled my holding in Haynes (LSE:HYNS) a couple of weeks ago because I got the distinct impression that this company is on the up at the AGM.
As usual I hogged the largest part of the question time. After that I chatted with the key directors about the company’s position and strategy for the future.
(for background see my Newsletter posts: 11th – 19th Feb, 8th-12th Oct)
Firstly let me say that the people who run this company could not be more welcoming to the interested investor. They seem decent and honest, judging by their open attitude, sincerity and gentleness. In short, I do not fear a lack of integrity with regard to shareholders’ interests. For me this is a vital criteria for investment. I would have sold my today shares if I did not trust them.
Second, I detected a general atmosphere of confidence. They could not be too specific because of Listing rule restrictions (i.e. avoiding giving some shareholders privileged information) in indicating why they are so optimistic, but my impression is that most excitement has been generated by the fruit that is coming from the knowledge and skill base built up in HaynesPro.
The ability to supply detailed data on hundreds on vehicles to professional users can be used not only to deepen and broaden the moat around the franchise that already has 40,000 loyalists across European (e.g. 90% of the German market), but can be used in all sorts of other ways.
With this in mind, they have been recruiting heavily in this area (hence the failure of staffing numbers to fall as revenue fell 20% over the last 5 years – an answer to one of my questions) so as to bring the vital computer and online capabilities in-house.
This now provides a platform for extending into more services for the manual buyer or the online user of the manual. They have invested in created an unrivalled knowledge base which already has customer trust; and they have created in-house distribution methods which are right up there with the best that Silicon Valley has to offer. They can leverage this competitive advantage in so many ways – some that are only just now beginning to be revealed to them as the possibilities for new services and products come to mind.
I’ll give you one example: Before the meeting I had a phone call from my youngest son who had taken to a garage a van that we use for the property developing business - the power assisted steering went phut.
This was not a garage we normally use. The mechanic said this will cost quite a lot to fix. We have no idea what the normal cost would be. It would have been very useful to know the labour time and the cost of the part.
HaynesPro provides this information to its subscribing mechanics already so they can price a job. It’s also useful for hire car companies and other organisations.
The knowledge has already been created by HaynesPro. So, at little additional cost, it could be made available to the general public – my son would pay a few quid to know what would be a reasonable amount to fix his steering.
And that is just one idea for brand and knowledge extension now that Haynes has the information base.
Dividend policy
A question was raised about dividend policy, and the reply was: “the dividend we have declared is our confidence in the future.”
This statement contributed to my hope for the future of this firm, because what I think they are saying is that the current low dividend cover ratio will be corrected as earnings grow again when the rewards of the strategic shift that started in 2008 with the purchase of Vivid (now HaynesPro) come through.
HaynesPro profits
On the issue of profits at HaynesPro I raised a concern: I said that the accounts did not reveal whether or not HaynesPro made a profit, could the Board enlighten us. The answer came back: Oh yes, it is definitely profitable, as their eyes lit up.
The two manuals businesses
One question that had been bugging me is......

[profdoc] 19/10/2015 18:20

Thanks mrx9000 - I look forward to our future discussions

[mrx9000] 19/10/2015 09:00

Profdoc: You may be better off doing your newsletter without advfn, just a thought. Alas your posts do not upset me, in fact you are one of the genuine types on advfn! Look forward to discussing HYNS further with you in the future.

[profdoc] 19/10/2015 08:38

mrx9000,
Thank for your points - I agree that these positive factors are significant. I have a few more, with a particularly focus on the three underlying businesses (qualitative analysis).
I'm unashamably promoting my Newsletter! I wouldn't mind putting the other 2,000 words here to stimulate more debate (activity is somewhat limited on the BB), but my subscribers (and ADVFN) will be a little annoyed if I did that.
I'll stop posting here at all if it upsets people.
I hope to see some of you at the Sparkford meeting next week.
Glen

[mrx9000] 18/10/2015 12:07

ProfDoc: Thanks for that, but surely you must admit with the closing "I'll explain some attractions in tomorrow's Newsletter" that at the end of the day that you are perhaps just promoting your own newsletter?

Admittedly your newsletter is only five quid but never the less it is still promoting it.

I have this on my watchlist but at present that is all. Here are a few plus points from what I can see and I won't be charging a fiver ;)

- Low price to Sales
- Good dividend yield at around 6% and has paid a dividend for the last 10 or so years, sometimes as much as nearly 9%
- Reasonably good ratios, with current ratio at 2 etc

However revenue is falling and technically in my opinion I see these going to the 80-85p region.

One I will keep an eye on and one that no doubt we will have further discussions about, albeit free ones :)

[topvest] 10/9/2015 21:52

Its a good company. Unfortunately the unstoppable power of technological obsolescence is overcoming all the good work done over decades. Sad, but true! They will have to restructure the business and move it all on line more more successfully than they have done. The good days are over though in my view.

[wad collector] 23/4/2015 21:17

Gosh it is turning into a surge ; must be up a good 10p this year.

[wad collector] 24/2/2015 15:44

It would appear that you two have talked up the price a few pence!

[mrx9000] 19/2/2015 11:38

It does have competition, however it is bolting things onto HaynesPro that I like the look of. I never saw any of the video stuff in Autodata. So it looks like they are developing it in a way that may win over subscribers from the likes of Autodata, when their subscription runs out etc. However I think they need to do more in the marketing department to make their product known to motor garages and the likes.

I see they have expanded the product into Scandinavia and from the statement "within the next twelve months we will launch a new repair and service labour time database". Autodata has this already so they are clearly identifying how to make improvements in their product.

It may not have a competitive advantage yet but if they continue with the proactive route that they are going along than they could have a product that is better than anybody else, backed up by the great brand name of Haynes.

[profdoc] 19/2/2015 10:07

mrx9000,
Thank you for your comparison of Autodata and HaynesPro. Do you think HaynesPro has a strong competitive advantage?
Glen

[mrx9000] 18/2/2015 15:46

profdoc: Interesting, I will read up some more on average EPS data.

I have not come across the Haynes Pro one before, however I notice that they own Vivid which I have actually used, which is the same product but renamed and more upto date I should imagine.

Both interfaces looks quite similar to Autodata. Both products look quite similar actually.

Autodata has more options and data by the looks of it though. The Haynes one has more pricing options and can work out a lot cheaper.

An identical business, producing a very similar product. Haynes actually did a good acquisition of Vivid back in 2008 by the looks of it.

I shall keep an eye on it now thanks profdoc.

[profdoc] 18/2/2015 11:44

Hi mrx9000,
Thank you for the information on Autodata.
The idea of using 7-10 years of earnings per share data goes all the way back to Ben Graham in the 1930s, but also used by Prof Robert Shiller (Yale, Irrational Exuberance fame). It has respectable backing from academic papers - I explained some of them in my Newsletters earlier this month. The underlying hypothesis is that the generality of investors do not allow sufficiently for the tendency of earning growth to revert to the mean (again, see earlier February Newsletters).

When looking at Haynes professional electronic business forget the familiar manuals. Twenty years ago a totally electronic information company for car maintainance was set up in Holland, called Vivid (no manuals! it used CDs to start with, now mostly subscription based downloads - to tablets, etc. - see recent Newsletter).
In 2008 Haynes bought this business and developed into the dominant European firm for professionals needing info on cars and trucks. It links with parts suppliers and with diagnostic kit. It is compatible with OEM specifications thus servicing using HaynesPro does not invalidate warrantee.

On the manual side: they have moved into electronic versions of the manuals which have lots of additional features, e.g. video. No doubt this was helped by the technical expertise in the HaynesPro business. They charge a price for a year's access, and a different price for permanent access.

Given your experience in the area of electronic car information/maintenance/repair/diagnostics, I would really value your view of the Vivid/HaynesPro product. If you have time, could you go to the HaynesPro website and tell the rest of us where they fit in with AutoData? Are they competitors or do they feed into AutoData.
My Newsletters are at
Regards
Glen

[mrx9000] 17/2/2015 16:56

Looking at the company Teon Medias accounts here

does it look like a good acquisition?

I would suggest that their EPS has been falling because they were to slow to adopt to digital methods? Surely they should of had something like this in place already? And why would someone want it when there are better products, like the Autodata one I have mentioned above.

[mrx9000] 17/2/2015 16:37

Profdoc: Interesting points you have brought up in regard HYNS. I have not seen anyone use average EPS figures before set over a long period of time (this case 8 years). I am not convinced on this methods validity. If an EPS has been generally falling for a number of years than it would suggest to me that there are inherit problems. I like to see an EPS that is growing.

I would like to add that I have setup various technical systems for car mechanics (one I still support) for various models of cars. They all generally have different systems and different software, but the principle is the same, you install the software and you plug the interface plug into the cars diagnostics computer. You read the fault code/s and then you can go about fixing the fault. You would then consult the other manufacturers software which has the necessary diagrams, part numbers, wiring diagrams etc.

Never once have I seen a professional car mechanic utilise a Haynes manual, either in its paper form or in any kind of electronic form so I was interested to hear of your figure of 40,000 of them do.

I am intrigued as a lot of car manufacturers diagrams and software are closed and you have to pay a paid subscription to access their software, hence Haynes does not use this. I have never seen a Haynes diagnostic kit before that you plug into a car.

I have also seen some pretty good pieces of software such as Autodata which has 29,000 models in its database. Cost £795 for a one year subscription which the data is updated all the time. Still not a Haynes manual in sight.

Hope that has given you some food for though profdoc :)

[profdoc] 17/2/2015 10:45

The Teon acquisition meshes well with the strategy pursued over the last decade. Congratulations to the managers for picking it up so cheaply - keep deepening and widening that moat around the economic franchise.

[profdoc] 16/2/2015 11:14

In last Friday's Newsletter ( I ask if Haynes' current share price low relative to the average of the last eight earnings per share numbers? Convincing research shows that using the earnings per share, eps, averaged over a 7 to 10 year period to compare with the current share price (rather than just last year’s eps) helps to identify grossly under-priced value shares.

These tend to out-perform both the market as a whole and a portfolio of value shares selected based only on last year’s eps – see my Newsletter posted 4 February 2015.

The answer reveals a current share price only 5 times greater than the average eps over eight years. Given the evidence I previously presented of the market tending to underweight the potential for "reversion to the mean" in earnings growth I think this gives us an indication that this share is worthy of more investigation.
In the next Newsletter I'll look at Haynes from the perspective of Piotroski factors. Then I'll consider the strength of the economic franchise and then the quality of management and the company's stability.
Glen

[profdoc] 11/2/2015 11:41

Even if you accept that the car/motorbike manual is irrelevant the following list of shows Haynes attends tells you something about the potential for 'manuals' on all sorts of subjects from boats to caravans (that is just 2 month's worth) - check out the list of manuals on their website.

Autosport International
8 - 11 January 2015
NEC, Birmingham, B40 1NT
www.autosportinternational.com

CWM FX London Boat Show
9 - 18 January 2015
ExCel, London, E16 1XL
www.londonboatshow.com

Motorcycle Trade Expo - Strictly B2B: No Public Admitted
18 - 20 January 2015
Stoneleigh Park, CV8 2LG
www.stoneleighevents.com

London ExCeL Wedding Show
31 January - 1 February 2015
ExCel, London, E16 1XL
www.excel-london.co.uk

Vintage Tractor Show
31 January - 1 February 2015
The Royal Bath & West Showground, Shepton Mallet, BA4 6QN
www.somersettractorshow.com

February 2015 Shows

35th Carole Nash Bristol Classic Motorcycle Show
7 - 8 February 2015
The Royal Bath & West Showground, Shepton Mallet, BA4 6QN
www.classicbikeshows.com

London Bike Show
12 - 15 February 2015
ExCel, London, E16 1XL
www.thelondonbikeshow.co.uk

Triathlon Show: London
12 - 15 February 2015
ExCel, London, E16 1XL
www.triathlonshowlondon.co.uk

Carole Nash MCN London Motorcycle Show 2015
13 - 15 February 2015
ExCel, London, E16 1XL
www.mcnmotorcycleshow.com

Craft Hobby & Stitch International
15 - 17 February 2015
NEC, Birmingham, B40 1NT
www.chsi.co.uk

Caravan, Camping and Motorhome Show
17 - 22 February 2015
NEC, Birmingham, B40 1NT
www.caravancampingmotorhomeshow.co.uk

Race Retro
17 - 22 February 2015
Stoneleigh Park, CV8 2LG
www.raceretro.com

[profdoc] 11/2/2015 11:29

I respect what you are saying bookbroker, but offsetting that is this interesting fact: half a million manuals sold in UK last year. Also dominates USA Australia and other places. Also dominates motorcycles.
Glen

[bookbroker] 11/2/2015 11:00

You may be correct, however there are fewer and fewer old bangers left on the road where the manuals apply, these days car dealers offer several years free servicing as part of the package for new cars, although I respect this is just part of their underlying business now!

[profdoc] 11/2/2015 10:56

Haynes intrigues me because the market seems to think it is out-dated and destined for nothing but decline. My analysis indicates otherwise.
I think it qualifies as a deep value share on the basis of its average earnings per share over eight years, its high Piotroski score, good business prospects, able managers and stability.
I'll post the analysis in my Newsletters ( the next few days. But here is what I posted earlier today (ADVFN don't like me to post much on the free BB, so I can't post any more here - sorry). I would value your views - perhaps I'm too optimistic?

Regards Glen

"How would you like to buy a stake in a hi-tech B2B e-commerce company that already has 40,000 online business subscribers, making it the market leader in Europe?

It has a strong brand and a history of high profits relative to its current share price.


Oh, and I nearly forgot, it publishes paper books – over 2,000 different titles in 15 languages. It is the market leader for these types of books in the UK, USA, Australia, most of northern Europe.

And, in case you were thinking that books are a little old-fashioned, not very hi-tech, well they have been working on that too. Now most of the car and motorcycle manuals have online versions with neat videos and other additional features helping the DIYer and professional alike.

The 40,000 online subscribers I mentioned are just the professional lot who pay an annual subscription to gain access to a comprehensive database.


These are mostly garage mechanics who need technical information on maintenance and repairs, tracing and fixing electronic faults, links to component codes, ordering the right parts and job cost estimates.


Can 40,000 hard-nosed mechanics be wrong? Haynes must be doing something right to get their orders.


On top of the 40,000 professionals there are many more keen amateurs subscribing to an online Haynes manual (LSE:HYNS).


In the face of all the gloom and doom in the stock market about the firm, it must be noted that in the last 8 years it has never made a loss, with the lowest earnings per share of 14.2p and the highest at 31.6p. Throw in the dividend yield of 6.5% and you certainly have my interest kindled.


And you can buy into a company of this quality for a share price of 115.9p, or a total market capitalisation of £17.5m.


This is a share for my modified-PER portfolio: It looks good on the ratio of share price to average eps over eight years, on Piotroski factors, and on the key qualitative elements.


By the way, I’ve been following this company for a decade without buying. There was always the nagging doubt that DIY maintenance and repairs was going out of fashion. On top of that the share price was two or three times what it is now.


Following a sharply lowered share price we now also have eight straight years of profits; if this business is headed for the dustbin, how come it keeps on reporting profits?


Perhaps it has found ways of profitably growing beyond its paper manual origins that the market has not yet cottoned on to?


In tomorrow’s newsletter I’ll focus on describing the three businesses created by Haynes. Future Newsletters will consider the earnings history and earnings prospects, Piotroski factors, key qualitative factors and the elements about Haynes that still trouble me."

[topvest] 23/1/2015 20:53

Technological obsolescence - two words but sums up Haynes and its product I'm afraid. Sad but true.

[wad collector] 22/1/2015 22:23

Chart looking even worse as the FTSE100 moves back to new highs this dog looks like it is heading to receivership. Not this year but eventually. It would need a pretty drastic change of product direction to save it in my view.
Perhaps they should start selling flowers or something...