Perform Share Discussion Threads

[aleman] 06/8/2007 15:17

Sold these a while back but they are starting to look cheap , if risky, again. Has been a shorters favourite in the recent past. I'm not recommending them. They just seem to qualify comfortably.

Wagon (WAGN) Forecasts
Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPS Grth. Div Yield
31-Mar-08 670.00 14.00 8.78p 6.8 0.0 +339% 4.00p 6.7%
31-Mar-09 668.00 20.90 13.02p 4.6 0.1 +48% 5.00p 8.4%

[scburbs] 04/8/2007 20:14

Great idea for a thread PP.

AHT is my second largest holding and has proved very profitable over the years, but in a temporary decline until the integration risk of a major acquisition reduces which appears to be occuring given latest results and credit rating upgrade. I also hold small positions in ATCG and GOC and have profitably held LEAD in the past.

My largest holding should also qualify, CCT. A toy manufacturer and distributor experiencing very strong growth and holding a number of excellent toy licenses such as Doctor Who.

They have confirmed expectations of at least 16.39p for the year ended 31 August 2007. At 173p this puts them on a current year ratio of 10.6.

"the Directors remain confident that the Group will at least meet current market expectations for the financial year ending 31 August 2007."

"The Group is also pleased to report that demand at retail for the Group's
products generally across its ranges remains robust and the Board expects this
trend to continue as retailers start to focus on the Autumn trading period
including Christmas." [Christmas 2007 is the major period in the 2008 forecasts]



The prospective P/E forecast is 18.29p (+11.5%) giving a prospective ratio of 9.5.

However, the broker Charles Stanley who made this forecast said:

"We see significant scope for upgrade to that FY08 number as H2 [this year] progresses and with further news on product deals." i.e. the forecast is very prudent as all of their forecasts have proved to be in the recent past.

CCT is expecting Doctor Who to continue to perform:

"The Directors believe that the development of the Doctor Who brand will give the Group scope for further substantial sales growth of Doctor Who products in 2008."

In addition a number of new licenses have been won recently, including the popular Primeval:

"The Board of Character is delighted to announce that BBC Worldwide has awarded
the Master Toy Licence for the hugely successful Impossible Pictures series
Primeval to Character Options, the Group's trading subsidiary. ....

The first series of Primeval which started earlier this year, achieved an
average rating of almost 6.5 million viewers for each of the first six episodes
and this success is expected to continue in 2008."



CCT has net cash (not included in the above P/E ratio) is very cash generative and has been taking advantage of the low P/E to make sizable eps enhancing share buybacks. The beauty of the model is that it is achieving massive growth and buying back shares from cashflow at the same time as opposed to most growth companies which eat cash in working capital/acquistions (interims had 38% turnover growth, 78% operating profit growth and 99% cashflow from operations increase). The board remain confident that the strong growth is set to continue for the forseeable future. Historically the broker forecasts have been far too prudent resulting in continuing upgrades (implicitly recognised in the above comments).

"Taking into account the on-going strong demand for our continuing lines and our new introductions, we are very excited about our prospects and expect to see further exciting growth as we continue to build our existing brands and develop new ones. ....

Current Trading and Prospects
The Group expects demand to remain strong for both its continuing ranges and new introductions. Taking this into account, coupled with the strength of our
product portfolio, the Board is confident that the business shall continue to
achieve further sustainable growth for the foreseeable future."

[cockneyrebel] 04/8/2007 17:02

Excellent thread PP !

Edit - agree with slapdash, the earnings growth from the past year and the forecast growth would be handy.

Can I suggest WH Ireland (WHI)

Market Cap £23.82m

Yield 3.6% hisoric, increased by 39% at the interims this year.

Cashflow positive and the company said this at the last results:

Our strong balance sheet and substantial net cash have enabled us to increase the interim dividend by 39% to 2.0p per share (2006: 1.4375p per share), to be paid on 28 September 2007 to shareholders on the register on 10 August 2007. Once again, a scrip dividend alternative will be offered..

As for the PE for this year and next

Current PE for this year is 9.8 on forecasts but I suspect this is way to low a forecast as WHI reported EPS of 14.17p in H1, more than the entire eps for last year and a 76% rise on H1. H2 last year saw over 5p eps. If they just repeat that the years eps will be 21p+

Forecast PE for the coming year starting Dec1 is 7.8 and eps of 18.9p.

Chart has just broken out past the 1 year high.



CR

[liarspoker] 04/8/2007 14:38

ZRX - true. My apologies but I didn't read the filter properly ( or at all ). ;o)

[papalpower] 04/8/2007 09:01

It will be interesting how these stocks do in the coming SEPT to MARCH period, which is the normal time of the bull run.

A good wobbly August, like we are having now, should set the markets up for a strong run Sept 07 to Mar 08 imv.

I can certainly vouch for the BB's going "dead quiet" at the start of August looking at visitor numbers, seems like "everyone" is now on holiday, so, all being well, things should start to pick up in September.

Myself, starting to add a few positions now while blood is being let, trying to beat the potential herd that will likely come in.

[papalpower] 04/8/2007 08:58

Updated now.

OPD/NBI/FIO/APL added.
ZRX not added as on current year x15 now.


I will, sometime, do another thread, which will be for any stock, regardless of market cap, current situation etc.. on a forward of times 7.5 or less (which will obviously be the higher risk stocks, tiddlers and everything else).

[liarspoker] 02/8/2007 16:22

Low and behold ZRX tipped in Shares Mag today.

[liarspoker] 02/8/2007 14:54

OK here is one Zirax ( ZRX )

Forward P/E of 7.49p. Excellent cash position and very lowely geared. Trading at about 4 times net book value. Company is increasing production as at the moment demand is outstripping supply. :O)

[papalpower] 02/8/2007 14:15

Keep them coming, I'll do the next update this weekend.

[cockneyrebel] 02/8/2007 11:21

Edit - deleted - not a £10m+ mkt cap sorry.


CR

[saucepan] 01/8/2007 17:57

The promised GOC comparisons chart:

[saucepan] 01/8/2007 16:59

Torabora, reference your post No. 47:

The eleven stocks with market capitalisation LESS THAN £10 million that made it through my filters are as follows:

ACG, DSL, DWHT, EQI, MME, SIN, TGP, TPA, VIG, WTL, ZHG.

Kindly share your findings if you follow these up.

[papalpower] 01/8/2007 15:42

Interesting observations Saucepan, sadly there is no "sure" way of finding the ones that will bloom. This is why everything needs to be thrown into the melting pot (earnings, cash, debt, cash generation, prospects.etc) along with a large dose of sentiment.

[torabora] 01/8/2007 15:17

Also, could someone post lowest pe shares[as reported in last years results.] this should bring up small caps, with no broker forcasts, [to small for research]. Just the place to find gems.

[torabora] 01/8/2007 15:12

Saucepan, best cheap shares have a Market Cap under 10m pounds, could you post the 11 shares that fall into that group please, i will then do some dog work on those. thanks.

[saucepan] 01/8/2007 15:10

I have also taken a ShareScope look at the 15 stocks listed in the header table.

Just 5 have PEGs (lack of data may explain the other 10!).

Rolling PEG-1:

COL 1.66
BVM 0.55
BKIR 0.52
ANGL 0.49
APC 0.32
AHT 0.05

From a quick look at the charts, APC seems the most interesting and was rated Investors Chronicle "Buy" on 25 May at 35.5p.

[saucepan] 01/8/2007 15:00

Papal Power

I have been running some of your criteria through ShareScope.

There is a "universe" of 3,654 UK stocks out there.

Applying the first criterion of Historical PER less than 12, this reduces the list to 312 stocks.

Adding the second criterion of Forward PER of less than 10, this reduces the list to 101 stocks.

Adding a third criterion of Market Cap in excess of £10 million, the shortlist reduces to 90 stocks.

If I then add a criterion of Rolling PEG-1 less than 0.75, the list comes down to 27 stocks.

However, the vast majority are in horrible downtrends (as viewed on a one-year chart), which is worrying (remember: the trend is your friend). None jump out as obvious technical buys, which is disappointing, otherwise I would highlight them.

If I add "broker consensus" to the criteria, filtering for consensus view to include "buy" and "strong buy", the list comes down to 14 stocks.

If I then add the view of Investors Chronicle, ("good value" to "strong buy") the list reduces to just 8 stocks:

BVM
CHNS
INVP
MMC
MEA
OKD
OML
RBS

I stress, looking at the charts, none of these takes my fancy.

ShareScope is not infallible, not least as it does not always include forward data on interesting smaller stocks. GOC is a case in point.

[papalpower] 01/8/2007 14:17

Thanks Tole, looks good on first glance.

[tole] 01/8/2007 13:57

Okay....one to have a look at for addition to the list.


Financial Objects - FIO (Share Price 55p)

Forecasts -

- historic(2006) P/E is 10.4 on 5.3p EPS, 1.0p Divi
- current (2007) P/E is 8.7 on 6.3p EPS forecast, 1.2p divi
- forward (2008) P/E is 7.4 on 7.4p EPS forecast, 1.4p divi

Broker - Evoultion, Edison Investment



Thread -

"Financial Objects provides software, and services and support for its software, to the banking, wealth management and energy industries. To compliment its primary software products, the company has several software offerings in other markets including property asset management, document management and financial advisory services."

"Revenues are derived from licence fees for its software and from ongoing annual maintenance fees which are typically 20% of the upfront licence fee. Additional revenues also come from professional services and support. The company has over 600 customers in 40 countries worldwide including blue-chips such as Abbey, Siemans and Lloyds TSB, although around two thirds of revenues come from the UK. Customers are served from regional centres located in Europe, Asia and North America and from the company's development centre based in Bangalore, India."


Recent Results

Revenues increased by 43% to £19.9m in the year to December 2006. Around half the increase came from acquisitions and the rest was organic. Recurring support revenues are £8.3m and pre-amortisation profits rose from £178,000 to £2.37m.

The banking software division more than doubled its profits and all that improvement was organic. It still accounts for three-quarters of group profits.

The company is back paying dividends after a period when it suspended payments and the final dividend was 1p a share. The balance sheet is strong with net cash of £2.8m.

Edison Investment Research forecasts pre-amortisation profits of £2.8m this year, and £3.4m in 2008. The shares had risen by around 50% in the past year yet they have retraced somewhat over the last few months and are now trading on a modest prospective multiple of 9 and that falls to 7.5 next year.

The group has £11m of tax losses to carry forward.

[papalpower] 01/8/2007 13:25

jeffian, I'll look at OPD on the next review, thanks for the suggestion.

Steve, no worries.

Saucepan, if you could supply the PEG figures (saves me the trouble of working them out) then I will add a column on the end for PEG.

[saucepan] 01/8/2007 13:21

PP: this looks like a great thread in the making - congratulations! I have added it to my favourites.

Did you consider including any reference to Price Earnings Growth Factor (PEG)?

This, to me, seems an important measure for helping to determine whether or not there is growth linked to apparent value.

I shall be happy to supply PEG figures, from time to time, for stocks that appear on the thread, should you choose not to include a PEG column.

My own investment style is a combination of technicals and fundamentals - in other words I try to invest in value when I think there is a favourable technical wind.

Thanks for posting the charts. It is possibly very significant that the majority of stocks are in downtrends or at best moving sideways. Perhaps there is something else the market knows?

The stock that appears to have the best chart, in my view, is GOC. (ATCG, and FAN look quite interesting technically, too, but not as good).

Surprise, surpise, GOC is the only stock listed that I currently have in my portfolio, and it is also presently my largest holding.

In a results webcast yesterday, GOC showed a slide demonstrating how the company is trading at a significant discount to its peers.

I shall try to post up later.

[steveofsw19] 01/8/2007 13:18

Cracking Thread PapalPower.


Big Thank you for all your efforts here.


S.