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Share Name Share Symbol Market Type Share ISIN Share Description
Keywords Studio LSE:KWS London Ordinary Share GB00BBQ38507 ORD 1P
  Price Change % Change Share Price Shares Traded Last Trade
  +24.00p +2.05% 1,194.00p 15,597 10:01:27
Bid Price Offer Price High Price Low Price Open Price
1,194.00p 1,198.00p 1,210.00p 1,156.00p 1,184.00p
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Technology Hardware & Equipment 134.58 10.66 10.99 110.8 764.6

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Date Time Title Posts
10/1/201915:07Keywords Studios - Tech for Video Gaming2,327

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Keywords Daily Update: Keywords Studio is listed in the Technology Hardware & Equipment sector of the London Stock Exchange with ticker KWS. The last closing price for Keywords was 1,170p.
Keywords Studio has a 4 week average price of 1,006p and a 12 week average price of 980p.
The 1 year high share price is 2,110p while the 1 year low share price is currently 980p.
There are currently 64,039,529 shares in issue and the average daily traded volume is 440,721 shares. The market capitalisation of Keywords Studio is £764,631,976.26.
togglebrush: All quiet on the KWS front even when a day we have a 9% share price hike
1670127: @ali47fish. Sorry for the delay in responding. The reason I'm moving to a cash position is due to broader factors. In the next two weeks we have the Brexit vote. If the agreement doesn't get approved, which is not likely, who knows what will happen. Worst case from a stock market position is we have a general election and a labour government that is not friendly to businesses. Add to that global trade wars and tariffs and a general slowdown in growth everywhere means companies are likely to struggle to grow at the same rates. Shares like KWS where even today operate on high forward P/Es are likely to bit hit harder as thier share price is based on the growth story. We are in December now, KWS indicated in thier results they would have two more acquisitions this year. It's starting to look tight for those to happen. Don't forget the later these happen the less revenue will be factored into the next results, they need these to keep the growth numbers up.
1670127: I appreciate the numbers that the analysts are giving and they may turn out to be accurate. That said I disagree with them. The current market valuation is 738 million. My estimates are that with all the acquisitions this year included that the total profit will have increased to around 30 million during 2019. That gives a forward P/E for next year of still 24 to 1 or double the NASDAQ average. In the last statement KWS indicated that they only had $100,000 of free cash so any additional revenue through acquisitions would need to be through a share placement, at a discount, or through debt. With the volatile share price no company will accept shares as part payment. The rolling credit facility is likely to have covenants attached, I have no idea what they are but I would suspect that they include some statements on the value of the company, think about taking a loan out on your house, the bank will lend you more money if your house is worth more. The short numbers are high, very high in fact. They have probably got some inside information about some problems or maybe breaches of those covenants. I am hearing a number of rumors from friends who work at KWS, that may or may not be true, but I am putting out here that the first half of next year will show a reduction in organic business not growth. If that happens a P/E rating of 8-1 is probably a more accurate valuation. That would be a 70% reduction from where we are today. I'm sure other people have differing views to me and I respect their positions but I would point out I was predicting this correction long before it started to happen!!
1670127: Scooper I hope that you were not too exposed. It is easy to get emotionally attached to stocks, I have done it a number of times to my cost. There will be up days and down days for this stock, however I still feel the correction has some way to run. My general rule is not to hold more than 10% of my portfolio in one stock. I would be cautious before re-entering the fray. The volatility needs to settle, unless you want to day trade. Even at these levels, the current valuation is based on the forward growth story, but based on the predicted earnings for next year this is priced above fair market value, which is a huge risk. I believe that organic growth has largely disappeared. Yes they reported 8% (2%) in the last results but this is is mainly due to inter-company pricing mechanisms. With the large acquisitions, that took place last year, it is possible to massage the organic growth numbers. Next year that will be challenging, a base revenue of 300 million and acquisitions of only 30 million will make this almost impossible, especially with the loss of large clients like Telltale (that went under) and the fact that 2018 is a high year for Games development. If the growth story goes towards a standard IT service company, with moderate growth, you are looking at P/E ratings of between 8/1 to 12/1. The KWS acquisition strategy has also become more difficult with the share price drop, companies may no longer accept shares and ask for all cash transactions, and for those that will accept shares the dilution on the company is now twice what it was a month ago. More worrying to me is the lack of comment from the company. A reassuring RNS stating that that revenues and profits are in line with market expectations would give some support to the share price, as would some director buys (which have been none existent for a year). My gut is that there are some underlying issues that may have leaked out to institutional investors/holders of shares through acquisitions and shorters. This has allowed them to off-load before the average shareholder I still believe this will trend down to 8 pounds a share. Any miss on the numbers and it could go well below that level.
jamesjjj: scooper totally understandable. I would not worry too much even if an RNS is released as the share price is so depressed that buying back in even at much higher prices should eventually reward. Again the price has started as I called it yesterday with a rally which i believe is been also fuelled by shorts being covered to protect their gains of the last few days.
1670127: I think KWS have an opportunity to grow but the successful strategy employed to date is not going to work going forward. Once you have all the services and work with all the major clients then you already have the cross selling opportunities. Buying other companies, with the same clients, provides limited upside and there are risks that some clients will move work to keep a diversified supplier base or ask for reduced rates on current work if the acquired company has lower rates. I've not analysed FDEV but after a cursory look it is interesting that the wife of the owner has bought 460,000 pounds of shares. At least they back themselves. I've not seen any director buys on KWS despite the near halving of the share price, probably says it all!!!
1670127: @Mr Euro … you and I are in full agreement on this. My fair value estimation is between 300-400 million, with a growth premium of maybe 100 million based on peer P/E ratings (I have posted before). So even though this had dropped still think that the price should be 8 pounds per share (or thereabouts). I would buy at that level. The share price drop will make their acquisition strategy more difficult and I suspect those companies (and staff) that have shares will be looking to sell at the moment. I know others have different views and I respect their opinions (and also reasoning), I have no position in the stock at the moment. On the positive side, Sony is up on good sales (followed up by Nintendo) so there is some positive news in the sector.
togglebrush: FWIW by my reckoning ' Friday was the maximum daily trading volume recorded this year by a large margin at 1,182,413 ' My calc gives daily Median at 188,193 and top quartile starts at 281,503 We haven’t seen volumes of this order since the placing on 25th October 2017. Shares in issue are 63.78 million ' All this adds to past six days trading where over 4.2 million shares have been traded or 6.5% (if each was a discrete buy or sell then 3.25% of issued shares changed hands). The share price reaction is that it is down from 1946 to 1496 or a 22% drop
scooper72: How come all this discussion about service down turn is being brought up now just after the share price has had a major drop, it seems a bit contrived, and makes me wonder why you have never mentioned it previously. It doesn't seem to match up either with the CEO painted last time he gave an update on the company. Just asking.
1670127: The risk here is with the share price tanking they will put their acquisition strategy at risk as people will all want cash not shares. This will potentially compound the price drops. Suspect that some of the price movement currently is driven by some of the issued shares for previous purchases being off loaded. we will see over the next few days.
Keywords share price data is direct from the London Stock Exchange
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