Northbridge Industrial S... Share Discussion Threads

[woodcutter] 31/12/2014 17:17

been in cash most of the year ebb but i am beginning to see some value coming so will be more active in the new year.

smithie you've got mail

woody

[eggbaconandbubble] 31/12/2014 11:08

Dare I say it......There have been some very obvious times over the years (sometimes in retrospect!) when it has been best to stay in cash. I have a feeling this is one.

[smithie6] 31/12/2014 10:09

...imho..little doubt.....oil price fall

after large fall....phps will hold at 400p ??...we'll see

[qs99] 30/12/2014 15:58

Interesting to see NBI share price downward movements. Not a holder but have made money before and on watch list. Not all its revenues are oiler dependent IMO, but meaningful none the less and recent NED sale didn't help sentiment, although he still has a decent chunk from what I can see DYOR etc.

More interesting for me was the comment at interims which had me concerned and why I didn't buy more then, was the words about needing more revenue to meet full year expectations type comments...IMO this put the risk on the downside, so I wonder how much of this is oiler related falls or Director sales OR underlying H2 trading?

I'll watch and wait.....cheers for informative posts above,

[smithie6] 30/12/2014 13:00

deleted...off thread

[woodcutter] 30/12/2014 10:22

On reflection the real issue now isn't at what point does the share price level out and NBI become good value. More importantly is how long will the oil price remain at current levels. We could see complete stagnation in the entire oil services industry sector for years to come. So there's a real risk in having your capital tied up in a sector that is declining.

On the other hand if you're prepared to wait out the trough then when the sector picks up you will most likley be well rewarded.

As i've mentioned before having debt and equipment idle and depreciating in value is not a very pleasant proposition.

aimho

woody

[woodcutter] 29/12/2014 22:15

In an illiquid stock like NBI any sizeable director selling would be quite difficult imv. The fact that they sold even a small number tells a story. Besides, whilst director buys and sells are informative, directors themselves are not investors and are often blinded by their attachment to the business and very often get their timing wrong.


With the industrial engineering sector having lost nearly 20% of it's value since May and the drop in the oil price it's a very brave investor who calls the bottom. Fwiw i would see this at a per of less than 12 before i'd consider re-investing now, that would be a share price of around 375p at current forecasts of about 31.3p eps.

I sold on the chart TA formation and i will only buy now on supportive TA. I agree with PUG it could go down a lot further yet and there's no real historic support level visible if it drops through 420p.

Woody

[pugugly] 29/12/2014 13:51

Be careful - VERY VERY careful - Very large proportion of the share price increase has, as has been said above, been due to a rerating from a hisotoric p/e (according to Ref) of 6.2 in 2010 to 21.5 in 2014 (at the peak) so with the price of oil having crashed and virtually all majors cutting back heavily on capital and exploration expenditure

PLUS Director selling

Date of trade Number of Ordinary Share price,
Shares sold pence
17/12/2014 12,500 518.40
22/12/2014 1,000 493.00

this could have a lot further to fall - Chartwise looks as though 1st real substantial support may be back at the 280p level as NBI has (as yet) not seen the same %age level of pullback as many in the oil services sector.

(imo etc)

[smithie6] 23/12/2014 15:46

btw

DAX looking weak in last 1/2 hr !!...relative to Dow & FTSE

[smithie6] 23/12/2014 15:44

well, hopefully a war without bullets !

(I guess for the 'West' that we are lucky that Saudi is on our side !
...& the motivations behind the use of military force in Iraq etc.....can see even more clearly the drivers/logic at times like this I think)

indeed interesting times...

but I guess for investing and global economics there have always been a number of different key movers/drivers at any one time....

[smithie6] 23/12/2014 15:19

I'm not an oil sector person, but I would guess that big oil cos, such as those that NBI works for......will still continue to do exploration drilling of oil fields that they have licenses for....even if they then cap it waiting for oil price to be higher to make extraction sufficiently worthwhile.

they want/need to know where the oil is or isnt ...and how much of it there might be..in the fields they have licenses for

as part of overall operation and planning

Repsol bt. Talisman Oil (Canada)recently....and I think corresponding to an oil price higher than 60$/barrel.....big oil cos. often/normally think/act long term


(big oil suppliers cant ask production department to double production in 4 weeks....only to be told, 'well give us 1 year first to do test drilling on our fields to find the oil'...imho they will do a lot of test drilling in advance, with less interest in the oil price at that moment)

[apad] 23/12/2014 15:18

It's a war Smithie6: threats, posturing, lies advances, retreats.
Malcys blog seems to be the best source of opinion.
We've got possible Greek snap elections and our own in May too.
Interesting times.
apad

[smithie6] 23/12/2014 15:12

interesting posts...

bit surprised with Saudi comments....
if I was them (if only !) if I could sell half the quantity at 100$ and obtain the same nett benefit as selling more at 60$...and hence get my reserves to last double the amount of time.....I would.

maybe they see that global economy is stuttering so they are trying to lend a hand by getting the oil price down.....since if economy were to slow badly...then its bad for oil sales volumes which is not good for them

[apad] 23/12/2014 11:33

All except WEIR that fell more than most and has been rising steadily.
Plenty of reasons for a market fall in the offing though Woody!
apad

[woodcutter] 23/12/2014 11:25

yep probably a bit too early yet to be looking for value in the oil services sector and the oil producers sector too. The recent bounce is likely to pull back imv it usually does after a sharp drop. Sharp drop, bounce, pull back it's often the case.

I'm less pessimistic though about the oil price and how far it might fall. My feelings are it will level out around $60/barrel over the coming months and like most commodities if they're cheap then we tend to get a little complacent and use more. I see a similar process happening in the mining sector too.

As we use more the price will inevitably rise. There are going to be winners and losers. Those in the oil sectors will lose but those who are high energy users or dependent on hydrocarbons for their products will be beneficiaries. I figure some companies will see profits rise and possibly higher wages for employees too, followed by more consumer growth and inflation and then interest rate rise.

Higher tax take and inflation will reduce the real value of government debt too.

I'm fairly optimistic about the near future for the markets and after spending most of the last year out of the markets i'm now beginning to look at returning and re-investing my pot.

aimho

woody

[apad] 23/12/2014 09:08

FT - 23/12/14:

Opec will not cut production even if the price of oil falls to $20 a barrel, the cartel’s de facto leader said, spelling out a dramatic policy shift that will have far-reaching implications for the global energy industry.

In an unusually frank interview, Ali al-Naimi, the Saudi oil minister, tore up Opec’s traditional strategy of keeping prices high by limiting oil output and replaced it with a new policy of defending the cartel’s market share at all costs.

“It is not in the interest of Opec producers to cut their production, whatever the price is,” he told the Middle East Economic Survey. “Whether it goes down to $20, $40, $50, $60, it is irrelevant.”

He said the world may never see $100 a barrel oil again.

The comments, from a man who is often described as the most influential figure in the energy industry, marked the first time that Mr Naimi has explained the strategy shift in detail.

They represent a “fundamental change” in Opec policy that is more far-reaching than any seen since the 1970s, said Jamie Webster, oil analyst at IHS Energy.

“We have entered a scary time for the oil market and for the next several years we are going to be dealing with a lot of volatility,” he said. “Just about everything will be touched by this.”

Analysts say that Saudi Arabia is throwing down the gauntlet to all the high-cost sources of crude — from the oil sands of Canada and US shale to deepwater Brazil and the Arctic — in an attempt to face down the threat they pose to its market share.

Mr Naimi said that if the kingdom reduced its production, “the price will go up and the Russians, the Brazilians, US shale oil producers will take my share”.

[woodcutter] 23/12/2014 08:44

well sad to see one of my favourite businesses share price falling so sharply. For once i think my exit strategy in the summer months was the appropriate course of action.

As we all know it's a well run business and sooner or later the share price will level out and hopefully we'll see a chart reversal for re-entry but for now watching with a little patience. I'm sure at some point it will begin to look very undervalued again.

WC

[smithie6] 22/12/2014 11:56

some relevant background news from New Zealand

from Mosman RNSs

-----

"low cost onshore exploration project located near Greymouth on the South Island in the southern extension of the proven Taranaki oil system"

"low cost onshore"


"Petroleum Creek Project, New Zealand

Mosman owns 100% of permit PEP 38526, the Petroleum Creek Project, which is a 143.6 sq. km low cost onshore exploration project located near Greymouth on the South Island in the southern extension of the proven Taranaki oil system. The project has a Mean Unrisked Recoverable Prospective Resource of 26.6 million barrels. In the first month of drilling, oil was discovered at Cross Roads-1 well which declared an Oil Discovery in June 2014 and at Crestal-1 which declared an Oil Discovery in July 2014. In H2 2014, the focus is on the appraisal of existing discoveries and additional exploration.

Taramakau, Murchison and East Coast Permits (New Zealand)

These permits were granted to Mosman on 9 December 2014 as part of the 2014 Block Offer.

Officer Basin Project, Australia (Application)

Mosman has a 25% investment in the Officer Basin Project, a 22,527 sq. km large land holding with significant exploration potential, which lies in one of the more explored parts of the Basin with road access. The project area is in the Western Australian part of the Officer Basin and offers both conventional and unconventional potential with hydrocarbon shows reported and all elements of a petroleum system are present.

Amadeus Basin Projects, Australia

Mosman owns 100% of two granted permits and one application in the Amadeus Basin in Central Australia which total of 5,458 sq. km. The Amadeus Basin is considered one of the most prospective onshore areas in the Northern Territory of Australia for both conventional and unconventional oil and gas, and hosts the producing Mereenie, Palm Valley and Surprise fields.

Otway Basin Project, Australia

Mosman owns 30% of VIC/P62 in the Otway Basin. The permit was recently renewed and is in relatively shallow water. The 70% permit holder funded a 3D seismic survey in 2013. The results of the 3D seismic survey are now being integrated in to a geological model to allow identification and ranking of drilling targets. Within the Otway Basin there is commercial production both onshore and offshore."

[smithie6] 19/11/2014 14:42

btw
nice to see the chairman buying again..after other buy around 500p level X months ago...55k pnds worth this time

(he previously bt. around 13k shares at approx. 500p in June 2014)

owns around 1.1M shares now....clearly he is a big NBI fan !

[eggbaconandbubble] 18/11/2014 20:31

Cut & paste!

[davidosh] 18/11/2014 19:25

The attendees usually post on TMF in the Pub so best to ask there.

[apad] 18/11/2014 16:51

Any feedback on the Mello meeting for those of us who live in foreign parts?
apad

[davidosh] 15/11/2014 18:45

As posted on TMF...

After all the excitement of three days away in Derby and the huge Mello2014 event that so many of you attended and supported it is now back down to the simple company presentation and networking dinner format that was the basis for our popular Mello meetings. The next Mello Monday as promoted and listed on our website at www.mellomeeting.com is actually only three days away and I have an excellent company coming to present to us...

Northbridge Industrial Services (NBI)

Craig Robinson the FD at Northbridge is coming to SeaSalt to tell us all about their industrial services and rental company which announced its interim results to 30th June just a few weeks ago...



Highlights

• Group revenue up 13.8% to £21.2 million (2013: £18.6 million)

• Gross profit up 16.6% to £11.6 million (2013: £9.9 million)

• Operating profit up 27.6% to £3.6 million (2013: £2.8 million)

• Strong cash generation from operations before movements in working capital of £6.5 million (2013: £4.8 million)

· Continuing investment into hire fleet totaling £3.0 million

• Reduction in net gearing to 29.8% (31.5% at 31 December 2013)

• Significant increase in revenue from Middle East and Asia-Pacific businesses

• EPS up 17.5% to 14.8 pence per share (2013: 12.6 pence)

• Interim dividend increased by 10% to 2.2 pence (2013: 2.0 pence)


At the same time they also announced an acquisition and a placing which I am sure Craig will be keen to explain the rationale behind...

Acquisition & Placing

· The acquisition of Tasman Oil Tools Ltd and Tasman Oil Tools Leasing Ltd ("Tasman") and placing of 642,202 new Ordinary Shares in Northbridge to raise approximately £3.5 million before expenses, announced separately today

· Tasman, a New Zealand based independent renter of specialist drilling tools suitable for the oil, gas and geothermal industries

· The acquisition reunifies the Tasman brand in Australasia

· Builds on Northbridge's presence in Australasia and complements the existing oil tool rental portfolio


Northbridge is a very well run company in my opinion and I have held the shares for over five years and they were on a very low rating of seven times earnings which has now increased but the story just gets better and better...

Revenues and pre tax profit are increasing very steadily each year

2011 £24.9m & £2.9m
2012 £30.8m & £4.9m
2013 £37.6m & £6.6m

Forecast to reach...

2014 £43.8m & £7m
2015 £49.7m & £8.4m

That would put them on a p/e in the mid teens so not as low rated as they used to be but they have a strong following amongst Fools here on TMF and if you use the search box I am sure you will find a lot of helpful background research.

Do let me know if you would like to come and join us on Monday by email through the website or just by replying to this post and using the email option. We will start at 6pm for drinks and then the presentation will start at 7pm. We may also be showing a short film of the highlights of Mello2014 which a large number of you may feature in. It is always useful to know the numbers in advance as it helps the restaurant prepare the long tables and have the staff numbers required to cope.

Looking forward to seeing you all again on Monday evening

David