Judges Scientific Share Discussion Threads

[marben100] 21/7/2014 09:59

Broadly speaking, I agree with Kalkanite. I don't think Judges has gone "ex growth", rather it is going through a tough time, being hit by two factors:

1. Sterling strength (as discussed)
2. A global squeeze on public spending, affecting many purchasers of Judges' equipment

Are either of those factors likely to persist forever? I doubt it. When they resolve, I expect organic growth will resume.

In the meantime, however, there is a risk of further profit warnings/downgrades. Therefore, having topsliced heavily in the past (much too soon, with hindsight) and banked more profits than my original investment, I will consider topping up, when I'm more comfortable with the short/medium-term downside risk.

Cheers,

Mark
Twitter @marben100

[kalkanite] 21/7/2014 08:43

Hi Martin

My term "growth" is expected due to acquisitions. The last 2 companies in particular were very high quality with strong growth CAGRs of 23% and 31% repectively and bought at multiples of around 6. The pool of private companies operating in this field in the UK is around 2000 (iirc)so plenty more opportunities.

The strength of the pound will clearly be a factor going forward either for better or worse but in the meantime I expect DCs acquisitions to be business as usual.

[shanklin] 21/7/2014 08:19

kalkanite

I agree with much of what you have written above.

Prior to the update, I would have thought £1.10 - £1.15 EPS was likely. However, if one views WHI's forecasts as credible then why would one be paying a growth rating for an ex-growth company whose margins and sales are under serious pressure both in the UK and abroad.

When I wrote 12x earnings would be a reasonable valuation, I believe I was being quite generous, building in something for future acquisitions.

Cheers, Martin

[kalkanite] 21/7/2014 08:12

Martin

The company has not changed at all. The only thing that has changed imo is the pound has got stronger which means that sales are flatter/reduced as a result.

The price got ahead of itself when it went to £23 but for me it was difficult to sell the shares when my view was that they would be £40 in around 3 years time if business carried on as usual, so I, like many missed that opportunity.

My own forecast was for around £1.10 - £1.15 EPS this year with any acquisitions being on top of that. Clearly with the strength of the pound JDG needs to either reduce its margins by cutting prices accordingly or keep margins and accept a reduced order, what this translate into EPS we can only go by the recent forecast.

Going forward I expect acquisitions to be as good as in the past as other UK companies will be feeling the same selling pressures so this is still going to be an excellent growth company(imo),it will just be growing from a now reduced level of EPS.

IN CONCLUSION

Still a great growth company now selling at an attractive price.

I've topped up this morning and will continue to do so if the price falls further.

K

[skyracer] 21/7/2014 07:56

Is this the same WH Ireland that showed such shrewd judgement with NOP ?

[shanklin] 21/7/2014 07:41

I don't see how JDG have a price target of £15.50 given their revised EPS forecasts of 86p and 90p for this year and next. If they think JDG have gone ex-growth then, as a small-cap, I would have thought 12x earnings would have been more reasonable.

Of course there is always the likelihood that JDG will find a decent acquisition but how much of that should be built into the valuation?

[cornishman33] 19/7/2014 11:56

Schroders must see some value at this price as they appear to have purchased about 70,000 shares on the update, about a million quids worth. Having said that, although I reduced slightly at £22 I now wish I had been more ruthless!

[shanklin] 17/7/2014 11:09

Thank you HE.

Given those numbers then, even with the potential for more acquisitions, trading on a forward P/E of 16 seems pretty adventurous to me.

[horndean eagle] 17/7/2014 10:58

WH Ireland forecasts this morning.

[davidosh] 17/7/2014 09:57

It will be much easier to do an acquisition if sales growth is slowing as vendors will not be looking for crazy multiples.

[shanklin] 17/7/2014 07:54

HE, where did you see those forecasts please?

[cockerhoop] 17/7/2014 07:40

Are they alluding to a further acquisition in the final paragraph?

[horndean eagle] 17/7/2014 07:31

REvised forecasts for about 86p this year and about 90p next.

[pugugly] 17/7/2014 07:19

Anyone got a guess as to P/E FOR 2014 at say £12.60. Looks to me as thought could still be in region of 14-16 trying to back calculate from the ims and the 2013 accounts.

Other views ?

[supersturrock] 17/7/2014 07:13

Yes, badly need one or two acquisitions with customers outside the public sector.

[stegrego] 17/7/2014 07:07

I guess the wheels had to fall off at some point.

It's been very highly rated, rightly so for years, but the forecast eps growth and now this trading statement do not support the multiples it was on.

[shanklin] 16/7/2014 15:14

Well we know Scientifica has been doing OK.

[cornishman33] 16/7/2014 15:11

Trading update likely any day now. There have been a lot of small sells over the last couple of weeks moving the price down. The sellers probably know something that I don't, but I will wait for a statement.

[shanklin] 16/7/2014 15:01

Well this is a bit of a pain.

[pugugly] 08/7/2014 08:58

Alphabeta4 : Wise man- A great company and great management but the share price had and still has (imo) run ahead of itself unless DC pulls a really good acquisition but EBITDA selling prices are becoming much less attractive (DC - I know you look at this board from time to time - so may I please ask you not to make another acquisition unless it more than washes its face - Cash is king so please be in no hurry - )

Also the strength of sterling is going to have a negative effect on both the bottom line and competitiveness going forward.

However (imo) at this price £18.40 bid probably a long term hold but if looking to top up or buy next chart resistance appears to be in the region of £16 -£17

However I can see the current small stop loss sales continuing and gaining momentum so risk is to the downside ,

Anyone any thoughts as to a fair value clean p/e?

[alphabeta4] 04/7/2014 18:41

Pains me to say this but out for now at an average of just over £20. Been seeing growth shares on straight rises derating, I'm concerned about the strength of the pound against the dollar and there is quite a gap below £20 to next support.
Of course could be an acquisition Monday but think best to play the odds and not get attached if on average I think will fall first.

[cornishman33] 03/7/2014 14:21

Looking back over the last few years there has always been an update in mid July. Last year was the exception with an update at the end of June, presumably because they had an acquisition to announce. I'm hoping this is just a bit of drift in the absence of any news, but whatever happens I'm looking forward to a nice divi tomorrow.

[davidosh] 03/7/2014 14:17

We know from experience that every deal done by DC and the team has been a very good one and the share price will kick on by 20% or so once it is announced ....the question is who knows when the next one will be ? Forecasts do not allow for acquisitions and they generally do well with like for like increases each year too.

[luckymouse] 03/7/2014 13:55

2 channels
1930 & 1620 seem to be the main support trend lines respectively - so we are at one of them now

dont know how you tell which channel its going to stay in?

PBT% f'cast looks epic - EPS% f'cast looks flat - 1 bkr - hold - 2370 (12% upside)
looks like they just drew a line at the top of the chart

12% isnt a lot for a whole yr so maybe the lower channel?