Renew Share Discussion Threads

[igoe104] 18/5/2021 09:44

Cheers for that Rivaldo, good to see that I have three companies in that list.

[rivaldo] 18/5/2021 08:51

Further to today's excellent results, the IC yesterday issued an Alpha screening report looking for businesses that are "capable of generating a high return on capital and sustaining it while reinvesting profits" - the "holy grail" of investing.

On the whole of AIM, only 7 companies passed all 9 tests outlined below - RNWH were one of them:



"●An operating margin higher than the median average(mid-ranking) stockin each of the past three years (i.e. quality thatshows some signs ofpersistence).χ9;A return on equity (RoE) higher than the median average(mid-ranking)stock in each of the past three years (i.e. again,quality that shows somesigns of persistence).●RoE higher than it was two years ago (i.e. qualityis improving as well aspersistent).●;Operating margin higher than it was two years ago(i.e. quality isimproving as well as persistent).●A dividend-and-debt adjusted price/earnings growth(PEG) ratio belowthe top fifth of stocks screened (ie stocks must notbe too egregiouslyexpensive for the growth on offer).●A price/earnings (PE) ratio above the bottom 10 percent of stocksscreened and below the top 10 per cent (i.e. not asuspiciously cheap ordangerously expensive valuation).●Interest cover of more than five (i.e. high RoE isnot overly dependent onthe use of debt).●Forecast earnings growth for each of the next twofinancial years.●Positive forecast free cash flow

[harrogate] 18/5/2021 07:49

2% is as good as it gets on building but I agree it looks more and more a spare part. I have always thought this management team are less wedded to specialist building than the previous one so could see a sale as part of a tidying up exercise. Not sure it would fetch a great deal

[rimau1] 18/5/2021 07:26

Results look excellent, the increased interim dividend is a good sign and i think we are still cheap by historic standards. 23p eps for H1 with strong momentum going into H2 and remember the nuclear decommissioning work only restarts in H2 so we could be looking at a good jump in H2 earnings. I am particularly excited by the 5G opportunity and Water. If i am picking holes all i can find that i don’t like is the 2% margin in the specialist building business. Sell it please, whats the point! I might even top up today if we don’t rerate as we could end the year at 50p eps rated on 13x earnings, should be 15x IMO.

[rivaldo] 18/5/2021 07:24

Excellent interim results, and a lovely, positive outlook.

With almost 23p EPS in H1, and particularly with (1) Nuclear recovering in H2 and (2) the J Browne acquisition kicking in, there's a strong likelihood imo that RNWH will beat expectations.

Excellent cash flows too, with net debt stable despite the acquisition consideration, and the interim dividend has been reinstated showing their confidence.

With the Engineering Services order book up almost 13%, I'm extremely confident about RNWH's prospects going forward:

"Trading has started strongly in the second half of the year underpinned by a record order book and we are well positioned to take advantage of the compelling infrastructure-led growth opportunities that will play a key role in the UK's economic recovery."

[harrogate] 18/5/2021 07:23

Lots to read in those interims but the strong start to H2 and the positive noises on outlook suggest to me we could see some upgrade to numbers after that. Very solid performance

[rivaldo] 18/5/2021 06:55

Great spot tanneg - looks ideal for J Browne, with much of that additional £2.8 billion going towards sewerage upgrades, removing chemicals and lead pipes from the treatment and supply network etc:

[tanneg] 17/5/2021 17:21

The J Browne acquisition looks even shrewder after proposals announced this morning.

[wad collector] 17/5/2021 13:38

Good to see a bit of a share price resurgence ahead of interims tomorrow.

[rivaldo] 14/5/2021 15:08

Cheers bsdjj. Great to see Liberum apparently - and at last - realising what a load of rollox their initial notes on RNWH were!

It's interesting that Liberum should make such a confident move only days before the interims next week on the 18th. Perhaps an indicator of continued positive vibes to come.

It's just a shame there are no notes available at all on Research Tree to help spread the word further.

[bsdjj] 14/5/2021 14:36

Haven't seen the note. Perhaps a catch up with events. They have constantly been behind the curve on this one.

[harrogate] 14/5/2021 14:27

Wonder what brought that on ? Do you know if they have upped their EPS numbers for 21 and 22 at all? Thanks

[bsdjj] 14/5/2021 14:20

Liberum have raised their target from 560 to 650. Liberum has been the most negative broker on Renew in the past.

[wad collector] 11/5/2021 15:09

Picked up my trade from last week at 618, I do like to make a quick 5% , but probably not worth the risk, I will try to sit on my hands in future.....actually I see it was only 3.7% after stamp duty and commissions.

[rivaldo] 09/5/2021 22:00

Yep, I remember a while ago there were mentions that RNWH would be an attractive target for a predator - presumably largely due to that security of income.

The interims are only 9 days away now, on 18th May. We already know that H1 was strong, and given the confidence already expressed in at least achieving consenus expectations for the year I suspect the outlook will be nicely positive.

[harrogate] 09/5/2021 08:57

Hi Riv. You may be right on the rerating due to level of certainty. It is what has always kept me here Numis target was upped to 715p after the Browne deal and 2022 EPS was upped to 49.6p. I still feel it will need a 2021 beat of the current 44.9p and as you say a likely upgrade to 2022 to push us on from here - unless with the pension issue gone they are attracting some interest from a predator who likes that framework business

[rivaldo] 09/5/2021 08:10

The market looks forward, not back. There's only just over a third of this year left before the new one starts on 1st October.

Shore Capital were forecasting 47p eps for that year back in December, before the new acquisition which should contribute £5.5m or more next year. This should increase that forecast to say around 51p EPS. Then if RNWH do mildly better than forecasts this year, that forecast could increase to say 53p EPS.

At 640p RNWH would therefore be on a P/E of only 12.1.

Numis already had a 715p target price according to a post made here. From memory this was prior to the J Browne acquisition?

Also, the market always loves recurring revenues and values them at a premium. I just wonder if there's a re-rating going on here due to this. Perhaps investors have woken up to the fact that whilst RNWH's revenues are not "recurring", they are - for the most part - repeatable, secure and regulated, under long-term frameworks and in largely high-growth sectors. And this will continue as it's the group's stated strategy.

[pugugly] 07/5/2021 16:28

Harrogate - Agreed - but if crystalise profit where to re-invest. Market looking very toppy but has been very toppy (imo) for the last month or so -
The experts are punting rotation to value from tech - but the world is going digital and most ESG's neither true ESG's and grossly overvalued - Cash in many cases at negative nominal interest rates and certainly (imo) at negative real rates.

[harrogate] 07/5/2021 15:39

Hard to argue with that. Based on current 2021 EPS consensus of 44p that is close to 15x which is the highest rating we have had for a while. Move from mid £5 after last deal has been pretty strong and surely they will have to beat this year to kick on much further from here. Well done

[wad collector] 07/5/2021 15:26

Couldn't resist , sold a few for the highest sell of the day , 643, but Rivaldo I feel like a vicar who has just sold the church.
Mind you , a vicar with several other churches and a plan to buy it back cheaper...

[rivaldo] 06/5/2021 22:18

Nice close at 633p-639p. I bet tomorrow morning's open will be around 617p-639p before the bid price creeps back up yet again around midday!

[wad collector] 06/5/2021 17:10

I like that up at the end today!
Even as a believer here I am tempted to sell a few , reason tells me that it cannot keep going up , at some point it will retrace. Time to top-slice and buy back into an inevitable dip?