Oxford Instruments Share Discussion Threads

[cockneyrebel] 29/6/2008 16:05

Mail on Sunday:

Oxford price storms ahead

Midas recommended Oxford Instruments in December, when the shares were 197p. Now they are 249½p, a rise of 27%.

Oxford designs and makes tools and systems using nanotechnology. This is a special form of science that takes tiny particles of matter and uses them in a range of products, such as sunscreens and energy efficient light bulbs.

Two years ago, Oxford recruited Jonathan Flint as chief executive and he created a plan to double turnover by 2011 and move into the FTSE 250 index. This month, full-year results to March 31 showed pre-tax profits up 26.7% to £9.5m, with turnover up 9.2% to £176.5m. Most importantly, chairman Nigel Keen said Oxford was on track with plans to double in size. Brokers believe the company will deliver profits of more than £13m next year and £20m in 2010.

• Midas verdict: The shares have come a long way, but are still well short of last year's 310p. Oxford has many fans and its shares are owned by some of the biggest investment institutions. This is primarily a growth stock, but the yield is still a respectable 3.4%. Hold.

CR

[cockneyrebel] 26/6/2008 13:23

I've just been looking back and that was the biggest one day volume in 18 months yesterday, and the stock rising in a weak market - definitely looks suspiciously like something going on imo. 4% will need to be RNS's I would imagine.

CR

[simon gordon] 26/6/2008 11:38

They would make a good fit for a large technology-focused engineering company. I keep expecting to see a bid one day.

[cockneyrebel] 26/6/2008 11:07

Any idea why someone wants to pay over the market for 2m shares Simon? They paid 5p over market which is usually a bullish sign - are they in for a bid from someone?

2m shares is over 4% of the co - strange to see such a large chunk bought at a premium like that and the chart seems to be extremely strong too.

CR

[simon gordon] 26/6/2008 09:24

From Growth Company Investor - 25/6/08:

Oxford Instruments: niche, focused, flourishing

London-listed since 1983, for most of its quoted life Oxford Instruments has been admired more for its science than its investment attractions. But that has changed under CEO Jonathan Flint, who is successfully implementing a five-year plan to double its size and expand margins. While the wider economy falters, Oxford Instruments offers investors exposure to defensive end markets where demand is being driven by environmental and safety issues.

Oxford Instruments designs and makes high-technology tools for sectors including industry and research, education, space, energy, defence and healthcare. It also aims to be the leading provider of tools and systems for the emergent nanotechnology and bioscience markets. Customers typically need to 'observe and manipulate matter at the smallest scale', and its products, delivering increased efficiency and productivity, are in demand in industries where environmental and safety concerns are paramount.

'We are in quite narrow niches and our customers need to buy our products in order to stay compliant,' assures Flint, pointing out that Oxford Instruments' spread of high-margin products and systems represents a key strength.

On the analytical side, measurement and fabrication instruments are supplied to industry and research clients, as well as Formula 1 teams, who use its tools for testing on the next generation of racing cars. Demand from the industrial sector remains strong, driven by requirements for environmental monitoring, quality control and materials identification – recent concern regarding the lead contamination of toys provides just one example of how environmental issues drive the market.

Within 'superconductivity', Oxford's materials, tools and systems range from superconducting magnets to cryogenic systems, for industrial and government customers 'working at the frontiers of science'.

Recent results for the year to March came in at the top end of analysts' forecasts. Sales grew 9.2 per cent to £176.5 million, despite US dollar headwinds (at constant currency rates, sales growth was 11.6 per cent). Pre-tax profits increased by £2 million to £9.5 million, with a total dividend of 8.4p proposed from earnings lifted 22 per cent to 11.7p.

The second full year of Flint's five-year plan to double Oxford Instruments' size and expand EBIT margins by ten percentage points was one of organic and acquisitive growth. Two years in and trading profit margins have improved from three to six per cent, with returns of 15 per cent now targeted.

Contributing £6.9 million to the top line, acquisitions included the £9.3 million takeover of WAS, a German maker of instruments used to analyse metals' chemical properties, which 'gave us access to the buoyant metals recycling market'. Strengthening the range of industrial spectrometers in markets driven by rising quality control and safety requirements, WAS's technology can identify elements such as carbon, nitrogen and sulfur, as well as steel, which is vital for nuclear and petrochemical industry clients, where usage of the correct metal alloy is critical.

Meanwhile, VeriCold Technologies, acquired for up to £5.7 million, strengthened the offering in the area of cryogen-free refrigerators (refrigerators that work without liquid helium). Elimination of the need for liquid helium has given the NanoScience operation access to growing markets outside academic research, including airport security and quantum computing.

Post year-end takeovers include LINK Analytical and TDI, a US developer of technology allowing Oxford to produce tools that enable suppliers of environmentally friendly 'high-brightness light emitting diodes' to cut manufacturing times and production costs.

While bearing a degree of technological risk, Oxford Instruments' broad spread of customers, applications and geographical markets (sales are split between the US, Europe and Asia) represents a real strength. Emerging markets, particularly the technology-oriented Asian nations, as well as Russia, India and the Middle East, offer further long-term opportunities.

Analysts see pre-tax profits rising to £13.4 million as turnover moves past the £200 million mark this year, while a further profits advance to £20.4 million is forecast for 2010, from £233 million of sales. Based on forecast earnings, the shares are swapping hands for undemanding multiples and offer prospective yields of around four per cent. In our view, the current rating is too low for a world-class technology tools maker offering robust earnings growth.


Recommendation: Buy
Ticker: OXIG
Sector: Electronic & Electrical Equipment
Listing: Full List
Mid-price: 242p
Market cap: £119.52m

[cockneyrebel] 26/6/2008 08:30

Big 2m buy yesterday - well over market price.

CR

[wad collector] 06/6/2008 13:19

Link Analytical looks an appropriate acquisition at a discount to its asset value.

[wad collector] 16/5/2008 12:38

Someone just bought a million shares ; thats 2% of the company.Should give the share price a boost when it gets around.

[wad collector] 16/4/2008 17:54

Finally a bit of upwards movement.Flotsam on a tide or something else?

[desp1a1] 13/2/2008 21:48

Back from hols and see the following (old) news...somewhat encouraging considering rest of portfollio is red

[desp1a1] 21/1/2008 17:49

expected a bashing today but with buys outnumbering sells consider share price plummet much overdone....but then I would.

I don't think its worry time yet as the buys & sells are small (although they do harv effect the sp), worry time is if main stakeholders start worrying and binning out (but I think the majority would be binning out on major losses).

the question is will share price bounce this week?

[wad collector] 20/1/2008 20:52

Oh dear,it keeps on falling.Perhaps I should start worrying.

[simon gordon] 24/12/2007 17:08

Geographic turnover - 31/03/07:

UK - 18.5m
Europe - 41.5m
USA - 54.2m
Japan - 18.2m
Rest of Asia - 25.4m

With the pound becoming very weak against the Euro and Yen I would expect Sterling profits to be up. The Dollar is next!!!!

[wad collector] 24/12/2007 13:21

The 7 year chart puts this year in context.I don't have a large holding here but I think it is safe and not one I worry about.

[simon gordon] 24/12/2007 09:01

If it breaks £1.80 then the next line of support is £1.40.

The £ is forecast to fall much further against the $ in 2008. I have read forecasts of between $1.60 and $1.80.

The next trading update is in April.

Catalysts for getting the share price higher are pretty low: the biggest one is a take over approach at £3.00. This is the main danger in waiting to buy at a lower price.

Maybe next March is the time to pick up some stock at a lower price!?

[desp1a1] 18/12/2007 13:27

OXIG win £2.5M UK single contract wonder if this will effect sp, given already healthy orderbook?

[simon gordon] 14/12/2007 13:29

I thank you for your informative post.

[desp1a1] 10/12/2007 22:02

OXIG the good.....
-provides a good/fair dividend
-frequent roll out of new products/upgrades
-world leader in field
-steady growth
-established (and steadily growing) customer base

The not so good....
-narrow field
-expensive products compared to competition
-tendancy to over engineer products
-R&D bais
-sp fluctuation (normally down) on relatively small trades
-not much in the way of news (no one could accuse them of blowing their own trumpet)

OXIG is one of my main stocks (I only hold 6 permanently) and I have invested over the last 4yrs on a regular basis, last time in Sep 07 at 243p thinking share price had bottomed out (following a bin out of half my shares at 300p in June). The main reason for investing into OXIG apart from pros above is that
-I use their products in the coating industry as do most others and can testify that their measurement products are probably the best out there.
-Friends working at OXIG.
-in for the longterm and want a share I don't have to frequently check (have n't the time during the day) and carries little risk

I hold 23000 OXIG shares and am averaging around 220p so last 6 months especially since Sep has seen any potential profits evaporate (ouch).

Whilst -
the Mail's report is encouraging
-there is potential
-forecasts for 08/09 appear healthy
It should be balanced against
-a potential downturn in industries OXIG supplies, currently industry preparing for worst (or do we require new plant, if so can we get away with upgrade to existing plant or cheap not so good but does the job new plant).
-currency issues (although this would impact on most in sector, not just OXIG)

So outlook (short/medium) could be mixed erring on an acceptable outturn (based on current orderbook/forecast). But as for buying now I would wait and see as share price looks fragile with probably no news which would effect it on the horizon and share price could drop and more so if a major investor bins out. However if share price falls below 180p without any good reason and the dividend either remains the same or marginally dips I'll be buying in bulk and sticking away for major longterm return.

[simon gordon] 09/12/2007 14:44

From the MoS:

'Nano technology is all about using matter at the molecular level to make our lives better in a wide variety of ways.

Sunscreens, for example, now contain particles that block out sunlight and the technology has also helped to create brighter and more environmentally friendly light bulbs.

The science is also widely used in medicine and is helping toy manufacturers detect lead in toys and so prevent children being inadvertently poisoned.

Oxford Instruments specialises in the design, manufacture and support of nanotechnology tools and systems. The company was spun out of Oxford University and spent years being good at inventing things but pretty bad at selling them.

Two years ago, Jonathan Flint was brought in as chief executive, with a brief to turn it round so it was not just clever but commercially successful too. He and finance director Kevin Boyd created a plan to double revenues by 2011, take profit margins from three per cent to 13% and move the stock from the FTSE Small Cap index into the FTSE 250.

So far, the duo are doing well. Interim figures released last month showed sales up nine per cent to £78.3m and pre-tax profits of £3m against a loss of £0.7m in 2006. These figures were achieved despite the weakness of the dollar - sales would have been 15% higher if the currency had been as strong as it was last year.

Flint admits the company is being affected by currency issues but he remains confident in its prospects.

The City agrees, forecasting profits for the year to March of at least £9m, rising to more than £11m in 2009.

•• Midas verdict: The shares have fallen from 310p to 197¾p in the past six months, even though most followers believe the business has huge potential. Buy and be patient.'

[simon gordon] 02/12/2007 20:16

Hi Wad,

To me, the rating is still pretty rich and with no near term catalysts, I can't see much action in the share price. Risks are to the downside as brokers have a Hold recommendation, (which means Sell), and if the market comes under further pressure, with the Banking Crisis, the share price could just trend lower.

I am interested to pick up stock closer to £1.50 rather than £2.00.

[money mountain] 30/11/2007 20:48

I am confused why this stock seems to be losing so much value - looks like the final year share price will be close to, if not lower than, 2006. I hear what you say about the directors throwing their lose change into the shares but something or someone does not like the look of this company.

Should I pick up more shares at £2.02 or should I go back to my oil exploration companies?

[wad collector] 21/11/2007 16:07

Director spending £20k cannot be a bad thing.

[wad collector] 20/11/2007 13:20

Solid results , yet price plunges.I remain confused.Is it dollar worries?

[wad collector] 23/10/2007 23:39

I remain puzzled why we are at 2/3rds of share price 4 months ago .OXIG is in a niche position and it is relatively immune to a housing or general economic slump.What has changed except sentiment? Or am I missing something?