Luceco Share Discussion Threads

[onjohn] 21/2/2020 13:04

Luce ready to rock

Just made a few k on Upgs

[wton1] 21/2/2020 12:31

ps you said UPGS was too early to buy

its up 26% in a week

expecting the same at LUCE


Watch the birdy

[wton1] 21/2/2020 12:30

hows your nephew

[nw99] 21/2/2020 12:29

Too early to buy

[wton1] 21/2/2020 12:27

This looks ready to fly

[napoleon 14th] 21/2/2020 11:54

LUCECO 123.8p
Gain to date: 6.7% Original entry point: Buy at 116p, 19 December 2019
INVESTORS SEEM TO be taking a shoot first, ask questions later approach to electronics components and LEDs firm Luceco (LUCE) and any potential output problems from the shutdown of its factory in Jiaxing, China.
The site has been closed down for the past couple of weeks because of the coronavirus outbreak. Importantly, there have been no reported cases of coronavirus among Luceco’s employees.
But after raising 2020 full year guidance at the end of January thanks to firming demand, investors are clearly concerned that those bumped up targets may now be missed.
As we went to press we had been unable to confirm if, or when, the factory might reopen but as analysts at Liberum rightly point out any shortfall in volumes near-term can be made up for during the rest of the year at the cost of some modest overtime.
‘Management note that there is no impact to current full year guidance,’ says Liberum. Guidance for 2020 adjusted operating profit of between £20.5m and £21.5m.
SHARES SAYS: Short-term risks cannot be discounted but the powerful growth and margin improvement story remains intact. We will keep an eye on events in case of a more prolonged impact.

[onjohn] 21/2/2020 11:16

😻😻😻

[onjohn] 21/2/2020 11:12

Luce starting to run

[napoleon 14th] 19/2/2020 10:09

Luceco's recent share price weakness reflects the recent, and currently unquantifiable, disruption to the company's Chinese production facilities.
We do not ignore this risk, however we view market reaction as overdone relative to a) what we know so far,
b) the company's inventory headroom, and
c) performance of peers.

a) What we know so far:
As with most other companies across China, Luceco has seen some production disruption as a result of the coronavirus outbreak. This is not a surprise, given 37% of the company's fixed assets and 90% of its workforce are based in the country. However, we note the following:
Luceco's Jiaxing factory re-opened on Monday, as anticipated, following last week's voluntary closure (the second week it was closed).
Management note that any lost volumes from just two weeks of closure can be made up for, at the cost of some modest overtime.
No cases of coronavirus have been recorded amongst Luceco's 1,000 person workforce.
The virus has had little direct impact on the city of Jiaxing, where Luceco's production is based, with just 43 cases out of a population of c.5 million people.
There have been no new cases of the virus reported in Jiaxing during the last two days.
As with most other companies reporting from across China (e.g. Volex), Luceco has re-opened at a reduced capacity. This is due to travel restrictions elsewhere in the country that have prevented some workers from returning after the Lunar new year holidays.

b)Inventory headroom vs peers
It is not yet known how long it will take for the company's subcontractors and component suppliers to return to normal. Nevertheless, Luceco has 100 days of inventory in the UK and we believe this will provide sufficient near-term cover to fulfill orders should the sector face component shortages.

c) Performance vs peers
Luceco has more inventory headroom than European Industrials which have 89 days on average, another reason why we see its share price under-performance as unjustified (The European Industrials Index is flat since the outbreak of the virus).
This compares to just 45 days for the auto-sector, where tighter supply chains and just-in-time fulfilment are likely to leave companies at risk (e.g. Goodyear & Hyundai).
Despite this, Luceco's shares have fallen 10.7% since 20th January, when Chinese authorities commenced official reporting on the coronavirus outbreak. The European Industrials index is flat over the same period.
Demand unaffected
Whilst the company has faced some near-term production disruption, this does not account for the company's inventory headroom (100 days) or sales exposure to China (zero).
As a result, demand remains unaffected by the coronavirus. Management's current guidance remains unchanged at present. We of course recognise near-term supply-risks that may increase costs should these capacity constraints continue for a protracted period.

P.S. My thanks to amarett; I C & P'ed his post above from a.n. other site as IMO it's highly relevant, & this thread is slightly sleepy.

Also, I admit I sold my LUCE @ 139.3p last week on supply fears to an otherwise much improved
company. I might well buy back.

[nw99] 18/2/2020 15:50

Too early to buy back with Apple problems

[onjohn] 12/2/2020 13:30

UPGS

TAKING OFF

[sphere25] 12/2/2020 09:13

Posted here Monday with the stock off 15% citing it as a buying opportunity.

Well, that patch of weakness didn't last long! Stock has shifted from a move of slightly under 120 to currently trading at 137. Well done if you bought the weakness.

Buy, sell, hold. Your choice now.

Also bought SCS (short-medium term overhang clearance play) and XAR (higher risk short term play only with consecutive days of significant buying volume) if you want to make more dough.

[onjohn] 12/2/2020 08:08

UPGS take off time

[onjohn] 11/2/2020 14:50

Mightnot yet have resumed ops in China so caution prevails

[nobilis] 11/2/2020 13:24

Ahead statement recently

[onjohn] 11/2/2020 13:07

Looking but good

[onjohn] 11/2/2020 11:32

Starting to rocket

[onjohn] 10/2/2020 23:32

Where is the W7l factory
That’s not fallen

[death by donut] 10/2/2020 14:18

I believe the factory is in Jiaxing , near Shanghai?On the website is where i saw it.

[bartyf1] 10/2/2020 12:50

At least the price has stabilised, creeping back up very slightly

[sphere25] 10/2/2020 12:49

Interesting lunge down with the stock off 15% on the day. RNS time from the company.

Buying opportunities are starting to present themselves around the market. Unfortunately, it has taken a deadly force to provide them. Historically, these events only carry a short term effect and I suspect this will be a repeat.

Ultimately, any losses in the short run will be recouped quite quickly so it is surprising to see investors throwing in the towel to a significant extent. Still, as market participants, we have to take advantage of the opportunities when they represent themselves.

It is just the timing that makes it tricky, but this one is an average into candidate on significant weakness.

All imo

DYOR

[saurish] 10/2/2020 12:37

Following is from 2019 half year report presentation,"Luceco operates an integrated model which includes wholly owned manufacturing and product development facilities in the UK and China.""China factory produces circa 50% of products sold-a key driver of Group profitabilty."I could not locate the factory locations however from the above statements it canbe deduced that it is a 50-50 split between the UK and China.

[napoleon 14th] 10/2/2020 11:26

john09 - that's much what I suspect. Didn't say so as it could look like de-ranping.
Not good if that's right, but is it in an affected area?

I gather that's not the case, as in should be resuming work sometime soon.
Next problem is shipping...

[bookbroker] 10/2/2020 11:05

Give the staff an extended break!

[john09] 10/2/2020 11:05

They are ALL in China of course