Inspired Share Discussion Threads

[funkmasterp12] 20/6/2017 13:58

Did anyone from here attend the AGM?

[rivaldo] 20/6/2017 07:29

Agreed, excellent stuff.

The order book is up 13% in just 5 months, Trading is nicely in line with expectations - which are 1.45p EPS and a 0.5p dividend, i.e a P/E of only 10.4 - and acquisitions are performing well.

In addition, the new COO has a successful track record in making acquisitions and then selling the resulting entity.....

[yump] 12/6/2017 09:57

The information and the data is very useful. imo its the conclusions that can lead you astray.

The key warning sign about valuations and share price estimates, is that there is a major positive bias. That is in itself enough to take the comments sections with a pinch of salt.

There's a whole load of research on it.

[rivaldo] 12/6/2017 09:42

I believe the points made by Panmure are extremely pertinent.

Further, I love reading broker notes about companies. No-one should take their views as gospel. However, it's foolish to ignore often extremely detailed 15-30 page notes on companies pulling together almost all of the information you could possibly wish for. Particularly when that info is obtained by talking directly to the management of that company, with access which is usually unavailable to PIs.

[bateleur] 10/6/2017 15:07

@rivaldo Try not place too much faith in brokers, Panmure, Finncap etc. They are just ordinary people who have to rely on a day job. If they were exceptional investors, they wouldn't be writing results notes for a living. Panmure's interpretation of the apparent 20% discount (the 4 points in your post) serves to underscore my point. None of them are particularly pertinent.

[bateleur] 10/6/2017 14:54

@yump I'm not sure the market allows you to be all that arbitrary...without taking your shirt in the process. Hopefully the pdf link helps you to get, as Buffett suggests, closer to being vaguely right versus completely wrong.

[bateleur] 10/6/2017 13:59

hxxps://www.frc.org.uk/Our-Work/Publications/Accounting-and-Reporting-Policy/Research-Report-Investor-Views-on-Intangible-Asset.pdf

[yump] 08/6/2017 21:42

Ultimately it isn't cheap as chips, but its certainly not expensive either, if you just take a view of an averagey sort of eps value. Which is not very professional, but then the debate can go back and forth, so an average seems the best working figure.

So, 1.5p this year minus some to get to say 1.2p. Very arbitrary.

Back to the 'buy a good business at a reasonable price' principle I guess.

[gswredland] 08/6/2017 19:18

Mum so where do you catch the falling knife!

[pj 1] 08/6/2017 16:24

Its also hit the same resistance levels as back in March 2014

[1gw] 08/6/2017 16:00

That's enough of a dip for me to buy back the ones I sold recently.

The adjusted vs basic earnings debate is interesting on INSE I think.

They're growing in part by acquisition, so we might expect to see continued chunky additions to the intangibles, which then get amortised against basic earnings. They also add in this internal software development to their intangibles.

On the other hand, they amortise relatively quickly (except for trade names) so the intangibles don't hang around on the balance sheet for all that long (except for goodwill of course). So if they were to stop making acquisitions (and stop making big investments in software), basic earnings would make a decent move towards adjusted earnings relatively quickly I think (customer databases amortised over just 2 years, software over 5 years, customer relationships over 4 years).

And underpinning it all, they are growing organically as well as inorganically, which provides me with some comfort that it is not all accounting smoke and mirrors.

[yump] 08/6/2017 15:48

Valhamos

I agree with you. I was being a little obtuse, in that headline eps is often quoted without qualification, which, if its going to be quoted and used as a financial valuation guide, should as you imply, include perhaps a range of valuations including and excluding the adjustments. Then there isn't just the cheapest apparent valuation to work on.

[fizzypop] 08/6/2017 15:19

Thx rivaldo. I put the recent hiatus mainly down to poor sentiment from UTW but difficult to weight the other influences listed by Panmure. Patience plus time will resolve the conundrum.

[rivaldo] 08/6/2017 14:12

Panmure called the share price post-results "curious", and they were "baffled" by the 20% discount to the wider market when the share price was 16.6p.

They put this down to (1) the slower organic growth in the last H2, which they expect to snap back this year, (2) acquisitions causing a rise in gearing, which is expected to now fall rapidly, (3) the management's placing of shares and (4) the very poor performance by peer UTW, which "fails to recognize the fundamental difference between the two companies’ different models".

I appreciate the prior debate about dep'n/amortisation etc, but feel the combination of the above are much the more likely to be behind the current stagnation.

I suppose one shouldn't be surprised about a hiatus since the share price rose nicely from 13p or so.

The AGM is in less than 2 weeks, and interims are only 2 months away in August.

[valhamos] 08/6/2017 13:44

Well maybe the market does which is what I am suggesting. It could be that in valuing the company it is using a more realistic eps than the adjusted one that is often touted here by those who then struggle to comprehend why that share is in their view absurdly cheap. And by "the market" I obviously do not mean Panmure.

[yump] 08/6/2017 13:01

I go: la la, la la la la la la la... who cares about whether eps is adjusted or not.

[rivaldo] 08/6/2017 12:26

Fizzypop, I didn't notice your post, thaks - going ex-div explains today's tick down.

Panmure have a 21p target and use the adjusted EPS figures of 1.45p EPS and 1.64p EPS respectively, which I believe INSE will achieve.

[valhamos] 08/6/2017 10:15

Those are of course heavily 'adjusted' eps. As discussed before a realistic eps is a lot less and hence the value the market ascribes to INSE is maybe not as "bonkers" as first appears. Having been in since 4.5p I recently sold the last of my shares for 17.5p.

[rivaldo] 08/6/2017 09:38

INSE are forecast to make 1.45p EPS this year and 1.64p EPS next year.

That's a P/E of 10.9 falling to just 9.6.

The divi yield is now above 3%.

Bonkers :o))

[fizzypop] 07/6/2017 15:30

Ex-div tomorrow.
Also nibbled 10k @ 16p.

[wanttowin] 05/6/2017 16:22

Nibbled another 10k @ 16p, good opportunity imo.

[nurdin] 02/6/2017 13:53

It is a bull market for small caps right now!

[igoe104] 02/6/2017 13:49

I wouldn't say that, INSE is still having a decent year.

its that time of year, where stocks can drip down a little, on small volumes.

Its the bigger picture that matters.

[nurdin] 02/6/2017 13:44

INSPE remains unloved for some reason...