Norcros Share Discussion Threads

[1fox1] 21/6/2018 10:30

Ex dividend today me thinks

[thorpematt] 21/6/2018 00:27

Not much stock available MMs a little caught out and not gonna fill orders cheaply I sense.

[podgyted] 19/6/2018 11:04

Spread gone out to 600bps+ . Screens say 216p buy quote is 230p - I'd buy in the low 220's but this seems a bit silly.

[edmundshaw] 18/6/2018 10:42

I see the bid and offer are being messed around with - presumably to try and rip off naive punters after the newspaper tips... Irritating...

[fredfishcake] 18/6/2018 09:13

I sympathize Loganair - I find the sell decisions the hardest, and NXR has spluttered a bit over the years in terms of its share price. As for the correction, it's been predicted for the last few years already and when you consider the shocks that have been shrugged off over the last few years, you'd have thought we'd have been in a recession five times over. It's never a bad idea to have a bit of cash ready to pick up bargains, but when to use it?

[edmundshaw] 18/6/2018 09:04

loganair, saying a correction latest time being 1Q 2020 - will anyone even remember that prediction in 2 years' time? Not a very brave prediction...

[shauney2] 15/6/2018 15:39

Tipped in the Times i believe.

[loganair] 15/6/2018 15:27

After 3 times this year the share price peeking its head just above 200p and falling back again, when the results came out and the share price dramatically rose on the day I decided to sell at 210p thinking like with the other 3 times that the share price would again fall back down to below 200p.

Oh well! I seem to have got it wrong....

2014 the Share price rose to 250p, before falling back to below 140p in mid 2016.

I still like this company and I am hoping the share price will fall back as it did in mid 2016 giving me a chance to buy back in.

All the bankers I've been hearing say there is a market correct of 30% plus coming, the earliest being October 2018, the latest being 1Q 2020, with most saying 1H 2019.

[jeff h] 15/6/2018 14:37

Thanks guys, it's a Buy in today's IC also.

[1fox1] 15/6/2018 14:32

HmmmmmmmmmMight get to 250p quicker than I thought :o)

[lomcovaks] 14/6/2018 19:59

+1 Jeff. Many thanks for sharing. I had a look today and noted I bought mine way back in 2011. Patience pays they say.

[robsy2] 14/6/2018 15:33

Thanks jeff for sharing that.
Onwards and upwards
R2

[jeff h] 14/6/2018 15:09

Bathroom fit-out specialist Norcros (NXR), the firm behind the Triton brand of showers, is riding high this morning. The shares are up 6.4% to 212.7p on a strong set of full year results, which reveal a ninth consecutive year of growth.

Revenue in the company’s two main market, the UK and South Africa, is up 10% and 12% respectively as the company benefits from a mix of acquisitive and organic growth. The dividend is hiked 8.3% to 7.8p.

The company has recently pursued a strategy of broadening its bathroom offering in order to provide a full suite of products.

The full year performance is impressive given both markets have uncertain consumer backdrops. Numis analyst Christen Hjorth notes the UK outcome ‘represents a robust performance against a challenging backdrop.

'In our view, this result reflects management actions over the last five years to refocus the group away from the DIY end market into higher growth areas (e.g. trade, specification, housebuilding, etc.)’.

He also cites the strong performance of the South African business over the last five years as mitigation against any risks from a difficult economic environment there.

SHARES ARE ‘SIGNIFICANTLY UNDERVALUED’

Hjorth, who reiterates his ‘buy’ recommendation and 300p price target, reckons the shares are ‘significantly undervalued’. At current levels the shares trade on a multiple of 6.8 times his March 2019 earnings forecast.

‘Furthermore, given the group’s robust balance sheet (FY20 net debt/EBITDA: 0.7x) and “well developed” acquisition pipeline, we expect organic growth to be augmented by further M&A (which we do not include in our forecasts),’ he adds.

We discussed our positive view on the stock in this article. A risk which may be a factor in the company’s discounted valuation is a substantial pension liability. Though, notably, the net pension deficit actually fell in the period from £62.7m to £48m.

The company is currently in discussions over a new triennial valuation of the pension scheme.



...also tipped by Tempus in The Times today.

[enami] 14/6/2018 14:22

Another good rise today, my chart target reached.

Only one broker note I could see from yesterday

Numis Reiterates Buy Target 300.00

[fredfishcake] 14/6/2018 10:35

£3 would get us to a P/E of 10, which seems undemanding and makes you realize what a bargain the recent 190-200 range has been. Nice to see us break out of that range, let's hope we keep going.

[its the oxman] 14/6/2018 10:21

Nice results, pension progress / getting sorted, more growth to come , rating could justify over 10x surely on further delivery. With good chance of a further relating, anyone else looking for break of 300p in time?

[loganair] 13/6/2018 20:02

Fed raises rates by 0.25%.

Fed say they expect to raise rates a total of 4 x 2018, 4 x 2019 & 1 x 2020.

Grant Thornton say they expect a recession in early 2019 and the US to fall of a fiscal cliff Q4 2019.

The fed is chocking off credit quicker then they think they are doing.

Guggenheim expects recession late 2019.

"Economic expansion doesn't die of old age, the Fed takes it out to the back of the shed and shoots it in the back of the head."

[thorpematt] 13/6/2018 19:58

Three times (and three times only) have I ever managed a "buy at the bottom sell at the top trade".

DGO
IRV
CLLN

were the fortunate trades in question.
I'm quite good at the buy at the bottom bit.
Invariably I buy too early and sell too early.
BOO
being my last example

Here at NXR I was only thinking this morning how the quality of the stock warrants the Buffett approach way more than almost all stocks listed these days.

Brands or barriers-to- entry are the usual mechanics which drive Mr Buffet's strategy, alongised some good ROE, cash flow and margin...and often low R&D and cap-ex.

As a PI there really is no need to be Buffett on any stock (IMO) but there are some (not many) companies where a hold and forget approcach will do you well.

XXP
TRI
ASY

have been some of mine.

As I have posted recently in a little bit of detail the future for NXR and the forward price calcs do IMV give rise for confidence in a re-rating (I won't repeat them all here again). That chart is certainly looking tidy too now and I won't post one of those here either (since Enami has drawn it beautifully).

Congrats to those taking profits...I'll be running this winner for while yet however.

[edmundshaw] 13/6/2018 15:34

norcros that is a nice pair of quotes. WB certainly has a way with words... as well as equities! :-)

[enami] 13/6/2018 13:12

Quite a nice reaction to the results. Look forward to the dividend any maybe a rise to match the 2015 high at 227.5

WEEKLY CHART


free stock charts from uk.advfn.com

[norcros] 13/6/2018 13:00

Let me start by offering some wisdom from Warren Buffett:

On "locking in profits", from the 1987 Berkshire Hathaway shareholder letter:

"We need to emphasize, however, that we do not sell holdings just because they have appreciated or because we have held them for a long time. (Of Wall Street maxims the most foolish may be 'You can't go broke taking a profit.') We are quite content to hold any security indefinitely, so long as the prospective return on equity capital of the underlying business is satisfactory, management is competent and honest, and the market does not overvalue the business."

On market timing, from the 2012 Berkshire Hathaway shareholder letter:

"Since the basic game is so favorable, Charlie and I believe it's a terrible mistake to try to dance in and out of it based upon the turn of tarot cards, the predictions of 'experts,' or the ebb and flow of business activity. The risks of being out of the game are huge compared to the risks of being in it."

And now onto Norcros:
Excellent results (apart from Johnson Tiles UK).
Dividend up 8.3% resulting in a dividend yield of 3.7%.
Underlying free cash flow (FCF) of £17.6m (with Merlyn only contributing for 4 months!) resulting in a FCF yield of 10.5% at current stock price. Valuation thus remains very attractive. I estimate current fair value at £3.2 per share. As the current stock price offers a large margin of safety, I won't be trying to time the market.

[spangle93] 13/6/2018 12:06

Taking comments at face value, I can see your concern, and taking a profit is never bad. I've certainly got a fair proportion of portfolion in cash waiting for an opportunity.

But that's really been the situation for the last 7 years - you can name any number of macro factors from Brexit through US presidents, Qatar vs Saudi and all the other Middle East turmoil, Russians in Crimea, and somehow the market has been grudgingly buoyant, so if you're out of it, it becomes a question of when do you get back in (plus missed dividends, of which NXR isn't shabby).

I've waited a while for NXR to start to move upwards, and there's now a very healthy trandline, so I think I'll stay longer ;-)

[loganair] 13/6/2018 11:38

I agree Norcros is undervalued and the share price may well go higher, however I am sticking with my convictions that there is going to be a 30% plus stock market correction which will see the Norcros share price fall then I will buy back in.

[1fox1] 13/6/2018 11:35

Whatever. Good luck to you either way. I will continue to hold. I think breaking through the old 20p barrier is a significant step in the right direction. In my opinion this share is still undervalued. Good divi too. £2.20p-2.50p next step up. £2 should now make a good support