Horizon Discovery Share Discussion Threads

[kestelmill] 09/5/2019 21:16

Where's the buyers gone?

[phowdo] 02/5/2019 13:03

Someone is certainly buying a fair clip.
We've seen that before - you only have to look at how spiky the chart has been.

[mamcw] 02/5/2019 12:22

The company is all about a DCF of where you think it will be in 5 years' time. You cannot be so short term - it's why the US market is miles better for companies like HZD (and why it will get taken out too cheap).

[kestelmill] 02/5/2019 12:03

Will be margin dilutive for anyone taking it on. That's not going to make it any more attractive.

[carpingtris] 01/5/2019 17:11

Should think they'll be taken over by then? ... imo..

[kestelmill] 01/5/2019 17:08

According to the IC article, market expectations are:

"Numis gives cash profits of £1.0m for the December 2019 year-end, leading to a loss of 2.1p a share, rising to £2.6m and a loss of 0.9p in 2020."

[jurgenklopp] 01/5/2019 16:08

…. followed by further very large trades at 193p

The next 48 hours could be interesting.

[mamcw] 01/5/2019 15:06

Another chunky trade of just under 500k shares. It is reported as a sale, but I suspect it is a delayed reporting of a purchase, that now looks like a sale following the tick up in the share price. Someone is tucking in ...

[jurgenklopp] 01/5/2019 09:06

Some solid momentum behind the share price now !!

The lack of an RNS regarding who ended up with the tranche sold by Invesco last week suggests a new substantial holder still below the declarable threshold. Combined with the strength of the share price suggests we could be in for an exciting ride.

I still think this would be a perfect fit for the healthcare division of Softbank's huge investment vehicle.

[kestelmill] 30/4/2019 12:55

I see, you think they are being conservative in their own estimates of their own growth - under promise and over deliver. In the last 3 years they have grown their revenues by the following percentages (stripping out Dharmacon).

2016: 19.3%
2017: 7.7%
2018: 16.0%

Dharmacon is 60% of their revenues and mature/slow growing.
To treble in 3 years they would need to do 24.5% per year on all their revenue, including Dharmacon and the services business (shrinking and not highly scalable).

I understand there is a bull case here but I would be more circumspect than yourself around growth estimates on all except Applied Products, which grew by 72% in 2018 to £15M.

[mamcw] 30/4/2019 11:38

Hi Kestelmill. In their results presentation HZD state:

• Global market growth from $1.4bn in 2018 to $4.4bn by 2023
• Global market will exceed US$7.5bn by 2024

So my crude assumption is that if HZD grow at a similar rate to the global market (i.e. gain no market share) their revenues will treble over this period.

[carpingtris] 30/4/2019 10:08

That's what I am after... being brought out at a higher price than current, though what price it's worth? hmm..

[kestelmill] 30/4/2019 10:05

I think ValueAct's game here is selling HZD. If you look at the background of the Board member they have installed it is all investment banking. What value can she add to that Board other than the process of buying or selling companies?

[kestelmill] 30/4/2019 09:57

MAMCW how are they going to at least treble revenue over 5 years when they have themselves set the growth expectation at <10%? Let's be generous and say they increase it 10% per year, they would grow 61% over 5 years taking revenues to £94.5M. They will have 70%-ish GM so £66.15M GP. Current non-exceptional costs are £42M (inc Dep and Amort) so that would leave £24M profit before tax and the current market cap of £280M would look ok. That's if they achieve it though and if they don't increase their cost base at all (unlikely).

I would only agree that they are i) well-placed to take advantage of market growth, ii) someone could buy them for this reason. I think they do have competition on all fronts, e.g. Seracare on the NGS standards, Sigma on the gene editing.

[rambutan2] 30/4/2019 04:07

Re ValueAct, I've only just noticed that Jeff Ubben himself is the co manager of the Spring Fund, having stepped back from being CIO of ValueAct itself in 2017, although remaining CEO of course. He certainly won't be expecting to get it wrong on one of the first investments of his new baby.

The fact that Margarita Krivitski took a seat on the board, which is by no means the norm for ValueAct, would seem to emphasise that point.




imho

[rambutan2] 30/4/2019 03:16

mamcw, yes, I watched the presentation webcast and also think they are headed in the right direction, albeit not without bumps on the journey.

Extra reassurance is provided by the fact that ValueAct are sat alongside me holding 18.5% of the shares and with a seat on the board.

[mamcw] 29/4/2019 16:45

Good investor presentation


What this comes down to for me is the following:
- Market opportunity (size) to treble over next 5 years
- HZD has enough cash / is EBITDA positive to be self-funding (big plus)
- Do you believe HZD can at least treble revenue over next five years? If yes, it is very cheap as £120m of extra revenue at 67% Gross margin = £80m of incremental gross profit. Yes, there will be some more operating costs, but operational leverage will be huge.

The bear case is that HZD's technology / know-how is out-of-date / it is not in the right areas and other innovations will make it obsolete. I don't hear anyone making this case. Therefore, the bear case is really only about execution risk.

Personally, I think the Bull case is much stronger than the Bear one, but that's the joy of a stock market!

[seaking1] 29/4/2019 14:37

Thought the company said in line with market expectations. Which I read as steady as she goes.

[seaking1] 29/4/2019 14:36

I’m making sure I have shares in either horizon or Abcam all the time as I reckon Abcam will be back in to make another offer at some stage.

[seaking1] 29/4/2019 14:31

Thought the company said in line with market expectations. Which I read as steady as she goes.