Invensys Share Discussion Threads

[rumpelstiltskin2] 23/5/2013 12:30

I am not worried about it. on my guesstimates there is close to £1.5bn in cash after the disposal. if the markets fall it could be good for them, as they could make acquisitions at lower prices, buy back their own shares with the cash to boost EPS, while also becoming an even greater takeover target!

[bobsidian] 23/5/2013 11:49

More nonsense.

When arriving at your so called consensus for 2013/14 did you adjust operating profit for tax or do you believe ISYS to be a non-taxpayer on an ongoing basis ?

You do know what a PEG factor is and the relevance it has for valuations ascribed to shares ?

You do understand that equity markets are exhibiting signs of being dangerously overvalued ?

2013 will in all probability be no different to 2007 and 2000. On each previous occasion market tops were characterised by investor complacency. The moment you hear commentators referencing historic cheapness of markets whilst ignoring the underlying pace of growth in earnings then you can just sense a major correction in the offing.

[rumpelstiltskin2] 23/5/2013 11:48

unbelievable!!! if you start from operating profit from continuing items of £131m it is very easy to see how the consensus numbers stack up.

why are you so determined to talk this down?

[bobsidian] 23/5/2013 11:25

Did you not read post 113476 ?

Even with revenue growth and margin improvement EPS is at significant variance to so called consensus.

Adjusting 2012/13 underlying EPS for exceptionals would still mean that year on year growth in EPS for continuing operations would only be around 14%. Given that ISYS is incorporating a pace of pre-exceptional EPS growth for continuing operations for 2013/14 of around 32 times, you can just see how overvalued ISYS currently is with its related PEG factor of 2.3.

But hey, this a bull market and ISYS is far from being the only overvalued share.

[rumpelstiltskin2] 23/5/2013 11:18

you have still offered no valid reason while ISYS consensus numbers could be wrong. perhaps they are too low?

[bobsidian] 23/5/2013 11:08

"you need to have a valid reason to challenge it"

Nonsense.

The one thing I have learned over many years of involvement in stockmarkets is not to accept so called consensus. All too often consensus has been proven to be wrong.

The current so called consensus on EPS for ISYS for 2013/14 and 2014/15 seems yet another example of this.

[rumpelstiltskin2] 23/5/2013 11:02

no. consensus is just that. you need to have a valid reason to challenge it, and you have not presented any valid reason

[bobsidian] 23/5/2013 10:58

lol. I am too. Particularly when they start quoting so called consensus estimates.

Take a look at note 2 and see the segment operating profit for continuing operations pre-exceptionals. Adjust that for revenue growth and margin improvement and deduct tax and you still get nowhere near the EPS estimates for 2013/14 that supposedly represent consensus.

[rumpelstiltskin2] 23/5/2013 10:48

lol. I am far more sceptical of bb posters

[bobsidian] 23/5/2013 10:44

"who are you to say this?"

And yet you seem prepared to accept without question the consensus estimates of others.

[rumpelstiltskin2] 23/5/2013 10:43

I have read that. the EPS must be based on earnings of £69m , so the other exceptionals must be included

[bobsidian] 23/5/2013 10:41

Not quite. Note 5 details the EPS for continuing operations:

"Before exceptional Group reorganisation costs; exceptional pension settlement gain/loss; exceptional pension past service cost; and exceptional finance costs."

The management of ISYS have done this exercise to allow investors to see the effect of the absence of contribution by Invensys Rail.

[rumpelstiltskin2] 23/5/2013 10:32

"The growth in revenue and margin will still not move underlying EPS of the remaining business of ISYS to anywhere near that of the consensus estimates for EPS for 2013/14."


who are you to say this? on my rough calculations the consensus numbers implies 5-6% revenue growth and something like 0.5% increase in margins

[rumpelstiltskin2] 23/5/2013 10:30

bobsidian


the EPS of 8.5p implies earnings of £69m, which appears to mean they have included the provisions and more tax in the adjusted earnings number, as operating profit was £131m.

[donkeystone] 23/5/2013 10:24

I think the "level line" price is £4.027
Below that at consolidation would be a loss.
Above that, sell before consolidation you should be up, BUT do your own maths.

If however you think ISYS is generally on the up do nowt, like me

As ever

£4.40

ttfn

[bobsidian] 23/5/2013 10:10

"so I will be £65 worse off"

Not necessarily so. If this rampant bull market continues it is not inconceivable that, even after the effective dilution of your existing stake, the share price of ISYS moves yet higher in line with the market.

Take a look at PSN. It too involved itself in a return of capital. The share price of PSN did indeed correct after the return of capital but then proceeded to move yet higher.

[bobsidian] 23/5/2013 09:56

I suggest you look at the Financial Statements. They show the underlying performance of the different elements of the business and account for the absence of the contribution made by Invensys Rail.

The growth in revenue and margin will still not move underlying EPS of the remaining business of ISYS to anywhere near that of the consensus estimates of EPS for 2013/14.

[dp9115] 23/5/2013 09:55

so I will be £65 worse off

[rumpelstiltskin2] 23/5/2013 09:52

bobsidian


the consensus numbers appear to assume 5-6% revenue growth and some margin improvements. so I think you are mistaken

[bobsidian] 23/5/2013 09:50

"...my holding is now worth £3900 less ?"

Compensated for by the return of cash.

[rumpelstiltskin2] 23/5/2013 09:49

no. work out what you have before and after, my calculation suggests it is the same. you have £19.5 k before, £15.6 k after assuming the same share price and also the cash

[dp9115] 23/5/2013 09:42

So they pay me £3835 , then my 5000 shares turn into 4000 shares , assuming the share price was the same , approx £3.90/share, my holding is now worth £3900 less ?

[rumpelstiltskin2] 23/5/2013 09:38

have you read the Return of Cash announcement, its very simple. they are paying out 76.7p per share and then consolidating every 5 shares into 4.

[dp9115] 23/5/2013 09:18

being a layman to all of this , can someone explain to me what will happen regarding my current holdings of 5000 shares when the return of shareholders is completed ?

[bobsidian] 23/5/2013 09:03

"don't know what your game is but the consensus numbers are 16.1p in the current year and 19p the following year."

Utter nonsensical numbers. Such numbers would suggest that underlying EPS of the remaining business is to grow by around 100% for 2013/14. Obviously consensus has not been updated to account for the disposal of Invensys Rail.

"...there is still pots of money on the balance sheet doing nothing, so you need to adjust for that"

It is true that ISYS may have a net asset value of around £1.70 per share with around 60p of that being cash after the return of capital, the pay down of the pension fund deficit and the settlement of the likely tax liability associated with the disposal of Invensys Rail.

If equity markets significantly correct then I would not expect the share price of ISYS to be immune from any correction.