Inspired Share Discussion Threads

[rivaldo] 26/4/2020 14:22

This Gresham House fund manager says INSE are on a "compelling" valuation and is presumably one of his "unprecedented opportunities to back fantastic businesses at attractive prices":



"LF Gresham House UK Micro Cap fund manager Ken Wotton says his team has lowered exposure to cyclical companies in the portfolio to limit downside risk and maintain liquidity. However, he has also taken advantage by investing in businesses he feels now have compelling valuations, such as Inspired Energy and Dominos Pizza. He believes the market environment will provide “unprecedented opportunities to back fantastic businesses at attractive prices either due to forced sellers in the market or through capital raises"

[wanttowin] 14/4/2020 09:37

Thank you 1gw, I will have a look at them.

[masurenguy] 10/4/2020 11:41

Interesting 1gw - as you're probably aware, both Rivaldo and I are also long term investors in Enteq. Consequently, let's hope that it's a case of "great minds think alike" ! :0)

[1gw] 10/4/2020 11:23

With apologies for the off-topic for anyone not interested, but if you're asking it's Enteq (NTQ). For full disclosure, it is currently my 3rd biggest holding (INSE is my 5th after this sale), I've been in since 2014 and I'm nursing around a 1/3 mark-to-market loss on my average purchase price.

It is oilfield services (Measurement While Drilling equipment) and its main "oversold" argument for me is that I think it has around 12p/share cash plus a management that managed very successfully to preserve cash through a previous downturn. It is however illiquid (can be difficult to buy or sell in quantity), despite the CEO's attempts to broaden the appeal through interviews with Proactive Investors. Its core business is providing equipment to shale oil and gas service companies in the US, hence why it is so beaten up at present, although it is attempting to build an international business as well. More on the NTQ board if you're interested.

[wanttowin] 09/4/2020 19:30

A clue 1gw ?

[1gw] 09/4/2020 15:21

I've taken a very healthy profit on most of the ones I bought on 19th and 20th March to fund purchase of something looking (to me) even more oversold.

[rivaldo] 07/4/2020 13:38

Interesting new article from INSE about how they can help businesses during COVID-19:

[rivaldo] 06/4/2020 14:41

Good to see the bounce continuing as the market sees a few glimmers of light at the end of the tunnel.

[owenski] 02/4/2020 11:24

From CNA TU today -

"In our customer-facing businesses, although we are starting to see increased energy demand from residential customers as more people work from home, we are seeing a more significant reduction in demand from business customers as sites temporarily close. We also expect to see an increase in working capital outflows and customer bad debt, as certain customer segments defer payments due to the reduction of household incomes and business revenues."

[rivaldo] 31/3/2020 11:58

...and buying at the full 14p offer price now.

[rivaldo] 31/3/2020 10:08

Buying today in 15k chunks - good to see the share price responding upwards again.

[tole] 30/3/2020 10:58

Nice someone keen 110k at 13.5 0.5p premium

[masurenguy] 27/3/2020 16:06

Holding steady on a big down day in the market. The shareprice has regained 40% from its post crash closing low of 9.5p last week. However, it is still 38% off its high of 20.5p this year, just 5 weeks ago.

[diesel] 26/3/2020 10:31

Riv, agree with most of your post, but I would completely ignore the Peel Hunt forecast, or any broker forecast for that. As far as debt two years of cash generation would clear it, I doubt that it concerns them, and I would imagine one two distressed businesses will be too tempting following this turmoil.

[masurenguy] 26/3/2020 10:25

Re post #2264: I don't think that should be a real problem at the moment. With cash in hand, plus £46m of headroom on their RCF plus the accordion option, they should not have any cashflow issues unless the lockdown extends for much longer than anticipated !

"In addition to cash and cash equivalents of £10.7m on hand as at 25 March 2020, approximately £14.0m of the Group's £60.0m Revolving Credit Facility is undrawn with an additional £25.0m accordion option available, subject to continued covenant compliance. The Board is actively focused on cash conservation and management, taking prudent and proactive measures to preserve cash."From today's update.

[rivaldo] 26/3/2020 10:23

- INSE are extremely cash-generative
- the EV/EBITDA is very healthy, and the Corporate Order Book has increased further
- INSE have today confirmed that 90% of their business is hardly seeing any impact at all, and the effect on the other 10% is heavily mitigated already by cost reductions

Which presumably explains why Peel Hunt have retained their 25p target price, implying they've retained their 2p EPS forecast.

[winnings1] 26/3/2020 09:36

I must say that in these highly uncertain times the debt could become a worry, as it seems high against turnover, the latter prone to a big fall.

[rivaldo] 26/3/2020 09:33

Peel Hunt have reiterated their Buy and 25p target price.

Which presumably also means they've retained their 2p EPS forecast for this year - that's a current year P/E of just 6.25:

[rivaldo] 26/3/2020 07:18

That's an encouraging update this morning....



- the Corporate Order Book has increased further since the year end
- no material impact on the core Corporate division, whic is 90% of revenues
- the SME division is only 10% of revenues, and demand reduction has been mitigated anyway by large cost reductions

And an optimistic outlook:

"Whilst we undoubtedly are in a period of economic uncertainty, the Board believes that the Group's profitable and cash generative nature coupled with a strong order book and substantial liquidity at its disposal will see it well placed as the economy emerges from the current period of uncertainty."

[rivaldo] 20/3/2020 11:29

Good to see a 178,000 share buy just now at 11.25p - nicely above the 11p published offer price.

[1gw] 20/3/2020 09:23

I've bought some more this morning.

[tole] 20/3/2020 09:15

For what it's worth I probably contributed somewhat with the drop taking the initial few I bought on the first dip to 13p off the table almost immediately as it became clear someone was forced selling and with mm's not wanting to take them on was seriously taking the price lower.I rebought yesterday with the suppressed price. Plenty of buys yesterday and again today being reported on NEX.

[rivaldo] 20/3/2020 08:05

Good to see the share price responding nicely to just a couple of buys. You could be right about an overhang having cleared Tole.

[tole] 19/3/2020 15:54

That 150k seemed to clear a line of stock available at 9pThere's been a fair few buys reported on NEX too.

[rivaldo] 19/3/2020 14:17

Agreed 1gw - I'm also torn between INSE producing a good, solid year of organic growth and consolidation, against taking advantage of the current market by snapping up a number of smaller rivals who are undoubtedlly going to need liquidity or will want exits even more than previously.

With 2p EPS forecast this year, and record Corporate Order Books at the last year end plus strong trading in January, the current share price looks crazy. Even if that forecast was to reduce by say 30% to 1.4p EPS, then a 9p share price looks 100% undervalued.