S & U Share Discussion Threads

[greatbear] 08/4/2002 20:53

kaffee,

No don't hold ITE.
I can see that ITE they have a negative EPS growth over the next 12 months (-1%), which would put me off. However, there is a forcast 30% increase during their Sept 2002/03 year, and their P/E is less then 60% of the average for the sector. Also, I believe (if you believe all that you hear), that the smart money is currently moving into media ready for the next bull market, which could start 4th quart this year.

I've just checked through my back issues. If you bought just after the tip you should be doing reasonably ok on this one. With out checking the actual detail of the updates it sounds as though it's been excitement all the way with director buying and bid rumours.

Looks like another good one from SCSW.

GB

[alfwilson] 08/4/2002 16:39

andysand

If as you predict eps come in at 59p and next year's forecast is upgraded to 68p ... my absolute minimum target price at time of results would be 560p and 800p for this time next year, which with the dividend ... may prompt me to top up again.

[kaffee] 08/4/2002 09:13

Well Albermarle and Bond was a bit of a dog of Portfolio I. They will only have bought that if that want to vindicate 'both' purchases they made in them two or three years back.... I'd be surprised though.

Of the two.. SUS has better fundamentals.. and a great set of results is already in the bag. SCSW seem to favour buying ahead of results at the moment.

Are you holding ITE as well ?? I think they may have run their course for the moment... and a £34 million loss is very very bad !!

[greatbear] 07/4/2002 22:13

kaffee,

There is a chance that they purchased Albemarle & Bond instead of course.
Also very good growth prospects on the year. Majestic (which I hold) I feel is good and solid, but is not as likely to make the strides that S&U and A&B are IMHO.

Taking part profits on Shiloh (which I also hold) or Mears I agree is a possibility, as both appear to have stalled for the time being.

GB

[kaffee] 07/4/2002 21:52

It's a given that SCSW bought them... I would imagine it was their purchase
that started the run from 4.75.

All the clues were there.. they didn't buy Majestic, and they only have enough cash for one more purchase... unless they've taken part profits on Mears or Shiloh.

This one will be the next star of Trader Portfolio II.

[greatbear] 06/4/2002 23:15

Essential,

This was in my opinion the best stock mentioned in last months SCSW (excluding any which I already hold). It as all the hall marks of a growth comany, with the bonus an excellent dividend (nearly 6%) thrown in. Nice to hear that REFS seems to confirm this with their black moons.

I also agree that SCSW are likely (if history repeats it self) to make this one of their main tips, and/or add it to their portfolio.


Best of luck

GB

[andysand] 06/4/2002 13:18

Having done a thorough analysis of S&U's accounts, I am going to stick my neck out and give a forcast of 59p eps for the results on April 19th. Assuming a p/e of only 10, that will give a price for now of 590p. However, that will shortly be an historic p/e so I am looking towards next year now. I believe that 'Advantage Finance' is growing at a very fast rate and we should expect to see a 25-30% increase in eps for 2003 giving a figure of 76p per share. At some point, this growth should trigger a re-rating to a p/e more in line with the sector. Cattles for example has a pe of 20! Being conservative and assuming a p/e of 13. my price target for 6 months is 13*76=988p assuming no share split has taken place before then. For these reasons, I believe there to be an opportunity of almost 100% returns at todays levels!

Good luck to holders,

Andy

[peladon] 03/4/2002 00:51

Consensus (post-statement) is for 49.5p, and 56.7p to Jan 03.

That puts them on a PEG of 0.6, which is still cheap. To get to a PEG of 1, you need a share price of over 800, which is not going to happen quickly, given the shaky market and the illiquidity in the shares.

A share split/sales by the Coombes family would help a lot. But they will rise anyway if they keep beating forecasts.

[andysand] 03/4/2002 00:24

Well, maybe. But awarding ratings to comapanies is all about growth. Since SUS seems to be growing fast, then i would have thought a p/e of 12 was hardly racy! EPS would only have to be around 58p to justify a price of 700p. Not at all unlikely i would have thought.

Andy

[andysand] 03/4/2002 00:24

(deleted repeat post)

[andysand] 02/4/2002 13:43

I think you're right about a split. The share price is too 'heavy' for a lot of small investors. I would like to see a 4 for 1 split to bring the price down to around 125p. Might well help liquidity.

Andy

[peladon] 02/4/2002 13:23

Yes, you're quite right, Andy. These forecasts are not yet upgraded. And if Advantage takes off, then even your forecast might look conservative.

But I still don't expect the shares to rocket until the liquidity issue is tackled.

Having said that, I've been averaging up on these for a couple of years now, and they've yet to disappoint.

[andysand] 02/4/2002 13:06

"Consensus (post-statement) is for 49.5p"

Exactly my point. This forcast is nonsense now. It is really irritating how slow these 'analysts' are to update their forcasts. There is actually a small clue in the recent announcement at what level of eps we can expect so i am going to stick my neck out and make my own forcast which will definitely be more accurate than the one we have! Here we go: eps for this year will come in at about 61p. Why? Well the statement contained a reference to earnings having increased by 30% in the last 6 months. I think that will have continued, especially since they were keen to point it out. That gives a price target BEFORE the results of 600p assuming the lowly rating of 10 persists. However, what about the inevitable upgrades to next years earnings. Even assumming growth only comes in at 15%, eps for next year is going to be around 70p hence my conservative target price of 700p which assumes no re-rating of the shares. A BIG assumption!


Andy

[longphil] 02/4/2002 11:51

I personally think Andy may be a little over optimistic, and it is nowhere near a certainty, but I'm in because I think there is good upside on this one. they would automatically be cheaper on fundies like PE than the likes of Cattles, but better performance could well narrow the gap. Mind you that could mean a mild downgrading of Cattles.

[bristolbaz] 02/4/2002 10:58

looking at the chart - it would seem that news is in the price since Feb 19th - there maybe a few more pennies to be earned here, but I would expect a sell off results day - bad or good

oh and the FD has quit

IMHO

[andysand] 02/4/2002 10:56

Agreed. The nearest thing in the market to a 'no brainer' given the recent news and lowly rating. If earnings per share come in at around 60p (which I think they will) then a fair target price would be well over 700p.

Andy

[tvsound] 02/4/2002 10:44

Results are due April 19th.

Yield 5.6%
PER 9
PEG 0.6
Growth (old prediction) 14.5%
ROCE 17%
Margin 25%
and also
Yield 5.6%


Company Announcement 0n Feb 19th...
"...based on present indications, profits before tax for the year ending 31st January 2002, due to be announced in April, will be materially ahead of market expectations".

Any thoughts on tagets prices? I think a similar business is cattles which is obviously much much bigger but is trading on a PER of around 15

[kaffee] 26/3/2002 20:28

Freddy... Warren Buffet is past his sell by date. Even I beat him last year and that's in a bear run.

So if that's the best comparison you've got... come and pay homage at my feet if you like.

In the words of Will Smith... Gotta get Jiggy with it.

[alfwilson] 26/3/2002 16:45

JRB

Freddie is a challenge ... and now you have mentioned it ... I can see how his lack of honesty/modesty might put some folk off ... and more importantly put them off SUS.

[jrb] 24/3/2002 15:44

See what I mean, Alf? He's even claiming to be honest now. No mention of his/her 'large' losses on Avon, though. (He seems to have bought back recently, so he may have recouped some of them.)

My point really is that SUS actually is an undervalued share, and probably still has a long way to go. Mindless and provocative ramping tends to give the opposite impression.

[ydderf] 24/3/2002 07:42

actually my record is superb, of course i make the occasional mistake, but i'm usually quick to retrace and move on - i lost about 50k on giardino but this pales into insignificance against the profits i have made on molins, nrunel, hornby, avon, sus, api, etc etc etc etc etc etc - most of you, being human, can't stand it when someone doesn't pretend to me modest, imho honesty is much more important - i'm better than anyone i've ever met at sharepicking ( never met warren b) !!!!

[greatbear] 23/3/2002 19:48

I'm with you on this one kaffee. I got in at 172 last week.

Info below is what I've prepared for the share club I belong to, therefore sorry if there are repeats of some of the information above.


S & U are providers of unsecured loans to consumers on low incomes. Typically loans are from around £175 to £3,000 and last for about a year.
Competitors Provident & Cattle offer the same sort of services, but work on lower margins. This is probably due to S & U using full time staff, unlike it's competitors.

Even though the weekly credit industry is mature, as the economy emerges from recession then credit grows at it's quickest purchasing durable goods.

It is anticipated that their new subsiduary, Advantage Finance, which extends rent-to-own credit for larger purchases , in this case cars costing under £5,000, will become an important driver in increasing the profits.

During February S & U stated that their results for the year to 31 January, to be announce in April, will be "materially ahead of expectations". The broker report as yet to be revised.

I believe this will be a very good defensive stock with potential to increase it's price by at least 40% over the next 12 months to £7 (current price 510). This does not take into account the anticipate EPS growth over the next 12 months or the increase in last years EPS. Oh and it pays a good dividend (over 5%).

GB

[jrb] 22/3/2002 17:07

Quite right, Jeffian. Freddy may be odious, but he is not always wrong. Naive lurkers should however be informed that he is not the investment genius he claims to be.

[alfwilson] 22/3/2002 08:35

Ian

Well said.

Alf