Ms Share Discussion Threads

[onlyonestorm] 20/6/2006 10:05

Max online with Barclays is £250, very strange!!!

Stormy

[cockneyrebel] 20/6/2006 10:04

And good things come to those who wait!!

As has been said many times here - you might go through spells of boredom but they are worth it for the exciting periods - and when you look at how these hold up v the market too then it's even better.

100% growth pa on this PE of 7 or so is just miles too cheap imo.

[rivaldo] 20/6/2006 10:02

The amount I can buy online has now reduced from 1500 to 150 :o))

If the results are anything like as expected then there will be plenty more to go for imo.

[onlyonestorm] 20/6/2006 09:53

I think we all posted at the same time, everything comes in three's!!

LOL

Stormy

[cockneyrebel] 20/6/2006 09:50

We're cooking with gas now - great breakout as the results approach - can obly be good news to do that imo :-)

50% undervalued still imo.

CR

[nurdin] 20/6/2006 09:50

Looks like a break out..very thin volume though

[onlyonestorm] 20/6/2006 09:50

Still looking good!!!! New high!!!!

Stormy

[cockneyrebel] 19/6/2006 15:32

yep, I would have thought any commercial property since 1989 has at least doubled in values apart from some very rare grim areas.


CR

[johnrxx99] 19/6/2006 15:27

Another view is that the board should have 3 yearly valuations and be aware of current values, otherwise it is not managing the business efficiently. My old firm did research that 60% of the ftse100 value was in property or similar assets. Indeed, if the 89 value was £5m, it could well be 50% of the company's worth. Who knows, we certainly don't.

[xdavid] 19/6/2006 12:37

I take the point about the 3 niche areas (although maybe 4 now with the MSI-Quality Forgings brand?.. ) so maybe they just need to get the MSI Group business more transparent to potential investors - a group web site, just with investor info, would be a good start.

PROPERTY

There is some freehold on the accounts, but not huge relative to their current $32M cap (but nice asset nonetheless)...

Freehold Property at professional valuation 1989: £4,965,000
Freehold Property at cost: £1,004,000 (no indication as to when this was but presumably after 1989).
TOTAL: £5,969,000

The Net Book Value (after depreciation charges) is down as £4.87M. They note that freehold land is included in this at a book value of £2.44M - separated out purely because land is not subject to depreciation charges.

Interesting but I can't really see them selling it off since they presumably need it to carry on their business. A good asset to have though, covering anything from 20% to 40%(?) of their current valuation.

-david

[rivaldo] 19/6/2006 11:55

David, thx about the property info - look forward to your comments.

I'm not sure MSI would be better off as just a defence-orientated company. For example, the forecourts business has been expanding into Eastern Europe/Russia - these regions must have huge growth potential, let alone if MSI manage to get into India or China.

And management have always (well, twice) emphasised to me that each of the 3 divisions is in highly profitable and expanding niches. Though I know what you mean - conglomerates (large ones at least) have often traded at lower P/Es than other companies.

In addition, unless something fundamental changes like the AIM rules or the directors' intentions, I'm absolutely convinced that MSI will stay fully listed. No PLC would go through a long consultation process, announce it was not moving to AIM and then change its mind within months without looking completely unprofessional - and that's the opposite to how MSI operate.

[cockneyrebel] 18/6/2006 13:40

Always been a takeover target imo - three very attractive divisions all trading on low PE's, no debt. Assets just an extra attraction.

Also have a look at the interim divi - highest ever in actual size and percentage increase - a good guide imo.

CR

[johnrxx99] 18/6/2006 12:24

CR - re the assets, does that introduce a takeover angle?

[cockneyrebel] 18/6/2006 12:15

Well at the interims they said they were not going to AIM - I can't really see them changing their mind so quickly. They do think of shareholders despite not spending a penny more than they need to keep shareholders informed.

This isn' a stock for punters that need a regular fix of news imo. Mose like you hold and you get very pleasant returns tho they often come in huge percentage spikes on news rather than steady. It's a company that gets on with the job of making money as th earnings growth shows. Also they are consevative on what they say. "Cautiously optimistic" at last year end translated into 50%+ earnings growth in H1!

Rivaldo - like you I suspect the assets are worth far more than on the balance sheet.

CR

[doubleorquits] 18/6/2006 11:49

and ISAble too

Oddly enough, that is one of the few concerns I have. Having raised the possibility of moving to AIM last year when the price was around £1, it held me back from buying as I didn't like the uncertainty and the short-term prospect of a sell-off by folk holding in an ISA and not having the funds outside the ISA, or the desire to re-purchase at all maybe.

This still makes me wonder whether the issue will be raised again at some point. With a company who are conservative in their use of RNS announcements (saving £100 a time) and do not have broker forecasts (more savings), it would signal the likelihood to me that they would be in favour of saving even more money by moving to AIM.

That is the biggest downside I see, and my post above in response to CR was a genuine attempt to see what downside there was with the share - all I could come up with was a lower price forecast than him but still well above where we are today. So may be the biggest downside risk could be based on a "what if scenario" of great results dampened by a move to AIM. What if that scenario occurred? How much would it effect the price of the share? Would it rise or fall?

In the long term, I guess the answer would be it wouldn't matter as the fundamentals would eventually win. But it would cause me a lot of short-term hassle in having to sell out of my ISA where I hold rather a lot of illiquid shares. Then it would be a question also of re-investing outside the ISA with money I haven't got available at the moment and waiting for two years to claim my fully enhanced taper relief on MSI as an AIM stock.

[rivaldo] 18/6/2006 11:03

The days are ticking by and we're in T10 territory now...

With two lots of director buying just before the interim period end and a share buyback two months into H2 it wouldn't be unreasonable to expect H2 to have been at least as good as H1. The minimum to look for must be around 16.5p EPS, especially with the busier winter months/H2.

On the other hand an optimist could expect maybe 10p-12p EPS in H2 and maybe 20p EPS upwards for the year given commencement of the £15m contract.

So a historic P/E of at worst 10 and maybe only 9, and a current year P/E as CR says of maybe 7? Bargain - and ISAble too!

A quick question. I see that MSI have £8.2m of property, plant and equipment on their Balance Sheet, but that the property was last valued in 1989! Does anyone have a clue as to whether this property is in good areas, whether any of it could be sold off etc - any clue at all really, as pretty obviously it must be worth a hell of a lot more now than it was 17 years ago?

[cockneyrebel] 16/6/2006 21:25

in total 12400 buys, 9900 sells - net 2.5K buys moved it 4.5p.

Going to be magic watching the punters scramble for stock on the results "I can only get 100 online" blah, blah.

I agree DorQ - the downside looks to be above where we are to day! :-)

Results were June 28 last year so Monday week or sooner I reckon.


CR

[iandippie] 16/6/2006 19:56

If we take the non-cautious approach, then by Sept, like last year, they could be on an historic pe of 14. If eps comes in at 20, then thats 280. OK, perhaps it's more likely that Engerland will win the u-no-what, but I can dream.

[johnrxx99] 16/6/2006 13:24

With this and one or two others (DRX, CHTR, KIE) been adding rathert han the other - why bother if not more than 20% but that's another story.

And good company to be in.

[sja123] 16/6/2006 13:21

There are five buys gone through on Plusmarkets, around 5,500 shares in total and what looks like a sale of 1000.....these are not shown on ADVFN.....

[doubleorquits] 16/6/2006 12:34

I know you are being cautious CR - but I shall be extra cautious to allow for your own caution ;0)

Just doubling H1 suggests a comfortable 15.6p (as you say). Just applying GDWN's PE of 12 for the year gives us around 187p and (as you say again) that is historic. We remain about 10% short of even that.

Even if we allow for a conservative 16% growth (based on the great info provided by CR and rivaldo) on that the PEG would remain a reasonable 0.75, an EPS would equal 18p, and on a PE of 12 the share price should be 216p. We are 25% short of that.

I think CR you are much nearer the truth with your estimtes but I just wanted to illustrate what I considered the downside to be! :0)

[cockneyrebel] 16/6/2006 12:13

I've held all my MSI right the way through, trying to trade in and out must be a nightmare. If you do sell out it can be almost impossible to buy back without paying a huge premium.

Now a little bit of thought.

These will have no net debt come year end results I reckon, unless they have taken on a bit to fill these huge gun barrel orders.

After SFR trading statement I can't imagine anything less than strong trading for the outlook too.

with 7.8p eps in H1 just matching that in H2 would mean 15.6p eps for the year, an historic PE of 11, and way behind the industry on PE's - but I think they will show they ar etrading much better than this - 19-20p eps for the year gone, being cautious 24p looks on the cards for the year ahead, PE 7, perhaps less?


SFR trade on a forward around 14 to compare the fabrication business.

VTG trade on a forward PE around 15 to compare the gun barrels side of the business.

GDWN trade on a forward PE around 12 to compare the fork lift fork business.


Just 24p eps next year and a PE of 10 = 240p a share.

Going to get snapped up by a bigger player if they don't re-rate imo

CR

[jgscott] 16/6/2006 11:57

thanks guys... I have now just completed 2 x £2,500 buy transactions through Squaregain. By adding to my existing holding, this is now 21% of my portfolio.