Keywords Studios Share Discussion Threads

[soupdragon55] 18/9/2015 14:14

My 1040 at 175p. First tranche of starting to add a few here.

[rivaldo] 17/9/2015 15:32

Cheers modform. Ah, the good old days :o))

Let's hope for similar outperformance from KWS - certainly possible imho.

[modform] 17/9/2015 14:41

Nice to see you onboard here rivaldo, I recall those days in OPAY from 80p I think

[rivaldo] 17/9/2015 10:20

Nice move up on a 2k buy at 171p. It does appear that those large trades have cleared the way nicely.

[modform] 16/9/2015 19:07

Remarkably strange saucepan, we can only assume that the large sells were for a buyer in a background, which is very encouraging

[saucepan] 16/9/2015 15:21

A very interesting trading day - hard to make sense of, but it does now seem to be provoking a rise.

[rivaldo] 16/9/2015 12:04

More large transactions today - and a tick up, so hopefully good news such as the clearance of an overhang.

[rivaldo] 15/9/2015 08:43

Yep, good to see healthy volumes changing hands without a problem (doesn't look like a rollover?).

Thx for posts 56 and 57, very useful info.

[mg1982] 15/9/2015 08:12

Some very large trades early morning. Holdings changing hands perhaps?

[saucepan] 13/9/2015 18:57

Terrific, MG1982: thanks very much for spotting and sharing.

KWS seems to have found itself a unique spot in an exciting marketplace and has developed critical mass that will provide strong competition barriers. It seems to have a great relationship with important bluechip clients - something mentioned in the video. Moreover, whenever I have heard Andrew Day speak he comes across as an impressive individual who makes the case for the business in a most convincing but modest way.

He describes KWS as "prudent" towards the end of the video and that seems to sum up the management approach very well. The recent acquisitions and what they bring to the business are also very well explained.

All of this backs up the growth patterns shown in this ShareScope fundamentals snaphsot:



All in all, in my view, a great young growth company - and also with a rather compelling current valuation.

[mg1982] 13/9/2015 17:56

Very good interview with CEO www.edisoninvestmentresearch.com/edison-tv/clip/executive-interview-keywords-studios

[saucepan] 11/9/2015 10:05

I added a few more today; looking forward to results on 22 September.

(Thanks for the link, rivaldo)

[rivaldo] 08/9/2015 12:01

Nice quiet share. Any decent buying interest should see nice rewards imo.

Here's Edison's recent update FYI:



Conclusion:

"Valuation: Attractive price for visible growth

Liquid Development is expected to be earnings accretive in its first full financial year. Factoring in the contribution from the acquisition, Keywords is trading on an FY16e EV/EBIT valuation of 8.3x. This is below the peer group median for Keywords’ closest localisation peers and the major listed video game publishers.

Keywords’ recent July trading update showed that it continues to grow strongly. Its higher-margin businesses verticals are growing at a faster rate than its core testing and localisation business, a positive for its future margin profile. As a result, we believe that despite its relatively small size, this valuation discount is unwarranted."

[mg1982] 08/9/2015 10:17

thats now 2 x 10k buy trades in 2 days. Clearly someone is building a stake here. Will be interesting to see the results and outlook statement.

[mg1982] 08/9/2015 08:28

It is encouraging to know that there is a buyer waiting for sellers to appear. 2 days in a row now that you can't buy more than 1000 shares without sending it to dealer. The next 1k buy will help move this further up so we can get that handle for the cup we've been waiting for ready in time for results!

[saucepan] 07/9/2015 15:19

I added a few more earlier today. Same experience for me: not possible to buy online, only through an order.

[mg1982] 07/9/2015 11:35

Thanks Rivaldo. Not much stock around just tried to buy more but have had to send a limit order to broker.

Should be interesting results coming up

[rivaldo] 07/9/2015 11:26

Nice article here - Numis have a 200p target:

Http ://www.proactiveinvestors.co.uk/companies/news/110504/keywords-studios-significantly-expanded-by-art-acquisitions-numis-says-110504.html

"Keywords Studios ‘significantly expanded’ by art acquisitions, Numis says
03 Sep 2015

“Art outsourcing is a large and rapidly growing market," Numis says

Keywords Studios (LON:KYS) significantly expanded its business with the recent acquisition of game art outsourcer Liquid Development, says Numis Securities analyst Will Wallis.

Game art is now a material part of the Keywords business, which had started around audio services and testing for game development studios, he added.

Liquid Development and Lakshya, an Indian art contractor acquired previously, together will represent around 17% of pro-forma revenue for 2015, the analyst points out.

Albeit, he also highlights that Liquid Development’s revenue contribution will be phased and as such any impact for the current financial year will be limited.

“Art outsourcing is a large (c.$1.2bn) and rapidly growing market, reflecting both the increasing complexity of video game animation driven by increasingly powerful hardware, and increased outsourcing by game developers,” Wallis said.

“We expect Liquid to continue to provide a predominantly onshore service, while also using some aspects of Lakshya's offshore-based capabilities.”

Wallis rates Keywords as a ‘buy’ with a 200p price target, which suggests some 30% of possible upside to the current price of 154p.

“We continue to believe that this is excellent value given the group's strong organic progression (c.20% organic revenue CAGR over 2012-14), added to what we believe is a value-creative acquisition approach and its global market leadership in outsourcing to the video games industry,” he added."

[rivaldo] 03/9/2015 11:44

Cheers Lanzarote. Been on hols, but thought there might be more buying after that article appeared on the Mail web site - perhaps any effect was stymied by the recent poor markets.

I note that Edison's forecast for next year following the acquisition has moved up to 13.08p (with a 1.32p dividend), with 9.94p EPS this year.

[lanzarote666] 24/8/2015 21:14

Mail online have published from the same source today;

[rivaldo] 20/8/2015 15:58

Nice article today on Proactive:

http ://www.proactiveinvestors.co.uk/companies/news/110141/keywords-studios-a-less-risky-play-in-the-video-game-market-110141.html

"Keywords Studios: A less risky play in the video game market
13:05 20 Aug 2015

James Serjeant at Numis said Keywords was a “very neat way of playing the fast and high growth gaming sector.”

Video games have gone through a resurgence in popularity lately and investors seem keener than ever to play the market.

A refresh that took place 18 months ago, when the a bevy of next-generation consoles were released, provided a much-needed boost to the industry.

Typically, investors have bought shares in game publishers such as Blizzard or Activision, but their dependence on the success of a single game or franchise has always made them a risky, cyclical play.

Illustrative of this volatiility is THQ, which, in 2012, went bankrupt after a raft of poor games and console accessory mistakes.

One way to invest in the sector, but avoid these periodic booms and busts, is game service provider Keywords Studios (LON:KWS).

It offers a range of skills including translation, localisation and, most recently, art services to game publishers, thus ridding itself of the ‘hit and miss’ nature of the video game market.

James Serjeant, managing director of corporate broking at City firm Numis, describes AIM-listed Keywords as a “very neat way of playing the fast and high growth gaming sector”.

Safe haven status doesn't come at the expense of excitement for Keywords is expanding at a rapid pace.

This morning it announced it had bought video game art creator, Liquid Development, as part of its on-going effort to provide a full project offering.

But Liquid will gives it a lot more than just art assets.

Numis analyst Serjeant said: “In relation to this latest acquisition, it is in the art space and if you are involved in the art sector the entry point into video games life cycle is much earlier.”

Ths in turn adds “additional work streams that go with it such as translation and localisation”, he said.

Not only this, but the location of the company, in Portland, Oregon, puts it in close proximity to emerging game developers such as Pipeworks, Silver Creek Night Dive Studios.

Of course Keywords also has some blue-chip connections - with companies such as EA and Microsoft - but Liquid has provided the opportunity to work with two new major players, Warner Bros and 343 Industries, the company behind the Halo games franchise.

From a numbers stand point, Liquid is expected to be immediately earnings-enhancing, with the company forecast to post revenues of US$7.5mln and pre-tax profits of US$1.5mln in 2015.

To put that into context, Keywords itself is predicted to make US$8.38mln (€7.5mln) in pre-tax profit this year.

Liquid isn't the only acquisition Keywords has made recently, after it took a 50% stake in Kite Team, last month.

This deal strengthened its position in Latin America, which the company has identified as a key market for the coming years.

And with the industry primed to grow in double digits over the next few years, you can see why savvy investor see Keywords as one of the winners of the games market."

[nurdin] 20/8/2015 13:56

cheers Riv....I was sure they had but there you go.

[rivaldo] 20/8/2015 13:53

Nurdin, I don't think SCSW has covered KWS. Yet!

Certainly can't see anything on its web site when searching.

[nurdin] 20/8/2015 13:31

Has KWS ever been tipped by SCSW? I have drawn a blank in my search.

[mg1982] 20/8/2015 12:50

Bought some early morning to. Chart def looks like a "cup and handles" Today's acquisition seems to have strong fundamentals. Looking forward to reading the interims.

GLA