Mears Share Discussion Threads

[5dally] 18/9/2009 16:22

Am I the only one enjoying this ??

[5dally] 18/9/2009 16:20

Blinking nora this is doing well :-)

[rivaldo] 18/9/2009 07:35

Looks like a decent re-rating is about to occur with all this support - 362p would be nice. From today's UK-Analyst market round-up:

"Brewin Dolphin issued a 'buy' note on support services company Mears (MER).

Analyst Mark Fleetwood believes that Mears' shares have materially underperformed Connaught and the majority of its support services (SS) peers in the past few weeks, at a time when many defensive stocks have seen prices rally. Brewin noted that average SS sector ratings have seen an upward step change and it expects further ground to be gained in the next 12 months.

"Mears in our view has unfairly been left behind, but is in excellent shape and is at an exciting stage in its development. We are confident that full year numbers will be in line, and the social housing market remains very defensive and continues to provide excellent opportunities for growth," the broker commented. There is also the possibility that further material contract wins could also come through before the end of the year and help catalyse the performance with a number at an advanced stage.

"We move to a target price of 362p (15.2x Dec 10 PER), Buy from Add and add Mears to our Conviction Call list," the analyst concluded. Mears shares rose 6.5p to 283p."

[cwa1] 11/9/2009 11:54

Good stuff r, thanks

[rivaldo] 11/9/2009 10:03

Excellent news today:



"Altium
Mears Group Raises price target to 335p from 300 Buy"

[rivaldo] 09/9/2009 12:05

Going very well here - still some way to go to the 335p broker target prices though.

Nice 30% gain so far in a couple of months.

Good news here:



"Watford Community Housing embarks on UK's largest energy efficient window installation programme
Published by Jon Land for 24dash.com in Housing

Monday 7th September 2009 - 11:05am

Watford Community Housing embarks on UK's largest energy efficient window installation programme

Watford Community Housing Trust, in partnership with Mears Group and Mulalley, has commissioned the UK's largest energy efficient window installation programme – some 25,000 windows - cutting CO2 emissions from across its portfolio and making homes warmer and more secure for tenants.

Replacing early generation single glazed PVC-U windows with new advanced performance Window Energy Rated 'A' rated products, the programme could help the Trust cut CO2 emissions by up to 76,500 tonnes over a ten year period. This equates to the equivalent of almost 45,000 double-decker buses full of CO2.

Delivered by lead partners Mears Group and Mulalley, the partnership has commissioned Profile 22 fabricator, Select windows to complete the programme. This includes a requirement to recycle the old early generation single glazed PVC-U windows recovered as part of the replacement programme...

etc"

[chillwill] 08/9/2009 22:59

Just got this on my monitor list (after reading the zulu principle funnily enough), just been trading ftse350 stocks mostly until now, but I reckon a lot of them are closing on to 'fair value' territory and time to start looking down the chain!

Annoyingly though, this doesn't trend very well so no idea where to buy in! Have to see what Autumn retrace provides.

[geovest] 08/9/2009 16:10

Nice breakout today. About time we see some positive action here.

[rivaldo] 28/8/2009 10:22

A nice article I missed - the Olympics starting to come through and £2.9 billion of further wins being chased:



"Mears Group today predicted a major Olympics boost as it won its first work for the 2012 Games.

Rosamund Urwin
18.08.09

Under the £9 million contract, the council housing repairs and maintenance provider will kit out the first 300 flats in the athletes village with plumbing and electricals.

Chief executive Bob Holt said he was confident the company would win further work on the other 2500 flats.

Meanwhile, Mears, which has contracts with Hackney and Richmond boroughs to provide social housing services, said it is chasing another four contracts worth over £100 million each. In total, it is pursuing contracts worth £2.9 billion. "We are benefiting from local authorities looking to lock companies into long-term deals," Holt explained.

Mears posted an 18% jump in operating profits to £10.8 million for the first six months of the year, and hiked its interim dividend payout to 1.6p from 1.35p last time.

"We have never missed City forecasts, which tells you about the resilience of the business. We are expecting another record year for orders," Holt said. Mears' order book stands at £1.8 billion."

[nellie1973] 21/8/2009 17:10

I hope everyone else has had a cracking day, blue on all of my stocks apart from incy drop on DGO!
Mears still driving on towards the magic 280...
Thanks for the tips peoples :0)

[melody9999] 21/8/2009 12:31

Nellie I've been investing 2 or 3 years now in growth stocks and reasonably successful. Bought in here at 240 so ticking up nicely. I find its good to have some steady performers in the portfolio to balance some more aggressive movers. At present major focus is ensuring my picks are not heavily indebted or are well financed.

Previously I have found I have been most succesful when I find a theme and can research around a small number of shares. eg palm oil NBPO AEP etc were hot at one point. Oil - BUR, PFC, AFR. When solar energy was in vogue I jumped onto SOLA at the right point. This year companies in training have shown large growth EDD, MLO. I don't do banks, insurance etc as I do not have a clear understanding of the business so i missed out there earlier in the year.

Commercial property seems to be the latest area of receovery.

Think the other thing I have found is that the longer you have your 'nose to the ground' then you get a feel for which stocks are quality businesses with quality management. MER is a case in point.

[rivaldo] 21/8/2009 08:12

Excellent start today....

No probs nellie.

[nellie1973] 20/8/2009 17:18

So slow and reliable succeeds, I like the idea that a company has something behind them before committing my cash. Apart from my small stake in TRP, bought at 7p now 2.5p. Stupid purchase on a day of excitement, wont be doing that again. Like many I am tempted by GKP but think it may burn me!!!
Thanks for your replies, it's difficult to start out without help!!!

[cwa1] 20/8/2009 12:36

Your last paragraph rings very true for me too-and certainly massively improves the portfolio's chances overall rivaldo. Still the odd duffer, it's very hard to get them all right all the time, but they are fewer and further between than they used to be. Although I'm still quite heavily in cash I added a few Carillion(CLLN) a couple of days ago FWIW.

[rivaldo] 20/8/2009 09:49

Good to see MER continuing to move up slowly and surely.

Hi nellie. Most of my stocks are safe ones due to (for example) high recurring income, like GNG, ALN, CAR, MER etc, but all with the potential for a step-change in market perceptions for one reason or another. Or they might be on ridiculously low P/E's of 3 or 4 with high tangible NAV and superb prospects like CHNS and RCG. Or they might have high tangible NAV, but combined with a turnaround going on unrecognised by the market, like VLE, C21 or WKP.

Even my oilies - SMDR, GKP, EEN, DGO, AST, HOIL - had a degree of safety built in when I bought them due to existing reserves, or an imminent drilling programme etc.

I've made losses on stocks in the past of course, but they're getting less and less as I realise that blue sky stocks without asset backing or recurring income are usually a recipe for disaster - better to get solid gains with the potential for more.

[chrisfoster] 19/8/2009 16:59

Nellie - I started at the same time as you and have had a similar experience. I'm not sure whether these are the best or worst times to be learning! Like you, I've made a few mistakes but the most frustrating thing has been picking good stocks but over-trading or being impatient and ending up losing money on winning shares! :-/ Overall I'm up about 10% thanks chiefly to trading Mears 3 or 4 times now. Along with MER I've also held GSK for a while as a classic defensive (gains from flu just a bonus), and I've found Aviva (AV.) to be a good share too that has probably under-performed.

[nellie1973] 19/8/2009 14:25

Riv,

How the hell do you decide what to pick in these turbulent times? I started trading in Jan 09 with a few £500 blocks of shares. I am up slightly but have made some stupid mistakes, mainly overtrading.

I currently hold CHL,OFF,MER,HOIL,DGO,TRP(oops)and HDY. All in varying degrees of profit apart from TRP (suckered in like a thousand others!)

Mears I have had twice now the first time at 211 and sold at 250.

[rivaldo] 19/8/2009 13:39

Good stuff from today's FT:



"Mears in move to lengthen contracts
By David Fickling

Published: August 19 2009 03:00 | Last updated: August 19 2009 03:00

Mears is to focus on consolidating existing relationships with councils and social landlords as the recession starts to affect the maintenance market.

Bob Holt, chief executive, said the social housing repairs group was looking to extend the length and breadth of its contracts.

He said Mears had moved into more renovation work as well as essential repairs, while the average contract length has extended from three to seven years and as long as 10 years.

"Our opportunities are coming in the main from existing customers," Mr Holt said. "There's an increasing consolidation, and people are trying to get value-for-money contracts from fewer providers."

Although maintenance is proving one of the most resilient parts of the construction market, analysts expect conditions to get tougher.

The Construction Products Association sees overall public housing maintenance spending down 5.5 per cent this year at £6.1bn, with declines continuing to a low of £5.2bn in 2012.

Mr Holt said that clients were showing particular interest in squeezing extra money out of tight budgets by striking joint venture deals to avoid VAT on outsourced services.

Mears saw turnover rise from £203m to £233m in the six months to June 30. Pre-tax profits fell from £7.7m to £7.3m, largely due to a £2m amortisation charge on the acquisition of 3C, a lossmaking arm of the collapsed Erinaceous group.

Diluted earnings per share rose from 8.15p to 8.55p and the interim dividend is increased from 1.35p to 1.6p.

The shares closed down 6p at 265p.

* FT Comment

Like its rival Connaught, Mears has a tried-and-tested business model that has so far breezed through the recession. Both leverage their size and professionalism to win long-term housing maintenance contracts with local authorities and social landlords. The complexity and longevity of the tenders creates a high barrier for entry: excluding the acquisition of 3C in January, Mears' profit margin has held solid this year at 4 per cent. The dividend yield is an anaemic 2.25 per cent and the stock trades at 15.7 times expected full-year earnings, behind Connaught but still well ahead of the 11.25 times construction and maintenance sector average. That looks pricey, but earnings per share have increased at a comparable 16 per cent over the past 12 months. If this rate is maintained, the premium should be justified."

[nellie1973] 19/8/2009 11:05

Riv are you a fan of the naked trader? .You seem to be in a lot of stocks on his lists. I know he ditched mears a while ago but I bought in on weakness. This is my first year of trading and I have held Mears twice.

Oh good posts on all boards by the way!!

[rivaldo] 19/8/2009 10:55

From today's Mail, Investec say 332p:



"Another day and another excellent set of figures from social housing and geriatric care group Mears, 6p lower on profit-taking at 266.25p. Operating profits for the half-year rose 18% to £120.8m and the dividend is up 19% to 1.60p. The order book stands at £1.8bn and the company is currently pursuing contracts worth £2.9bn.

Mears' mechanical and engineering division has won a contract to provide infrastructure and fit out works on the Athletes Village for the 2012 London Olympic Games. It comprises the first phase of the village with approximately 300 apartments valued at £9m. Follow up contracts on the site are expected. Investec's target price is 332p."

[nellie1973] 18/8/2009 17:32

Bit of profit taking on the results. I am still holding after buying in at 225.

[rivaldo] 18/8/2009 14:58

Confirmation from Collins Stewart:



"Collins Stewart has a buy and 335p target for Mears Group"

[rivaldo] 18/8/2009 14:12

Pbracken, ta for the Charles Stanley update - great to hear the results were ahead of their expectations!

MER have certainty over this and future years' revenues, and I'm looking forward to further contract news soon, as they've hinted at in the results.

We seem now to have several brokers recommending to their clients target prices for MER of betwen 300p and 340p (the 340p being Charles Stanley's).

[hosede] 18/8/2009 13:18

Rivaldo
I agree, But there is mounting evidence that the so-called recovery is a sham and that markets will be anything but stable! In which case you need a huge risk premium to be in equities in general