Share Name Share Symbol Market Type Share ISIN Share Description
Sdi Group Plc LSE:SDI London Ordinary Share GB00B3FBWW43 ORD 1P
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 204.00 94,897 16:35:00
Bid Price Offer Price High Price Low Price Open Price
205.00 208.00 206.50 203.50 203.50
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Electronic & Electrical Equipment 24.50 3.26 2.66 76.7 202
Last Trade Time Trade Type Trade Size Trade Price Currency
17:13:32 O 15,000 205.00 GBX

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Sdi Daily Update: Sdi Group Plc is listed in the Electronic & Electrical Equipment sector of the London Stock Exchange with ticker SDI. The last closing price for Sdi was 204p.
Sdi Group Plc has a 4 week average price of 165.50p and a 12 week average price of 160.50p.
The 1 year high share price is 208p while the 1 year low share price is currently 49.50p.
There are currently 99,058,164 shares in issue and the average daily traded volume is 462,030 shares. The market capitalisation of Sdi Group Plc is £202,078,654.56.
sweetunicorn: It is a very theoretical assumption because the markets tend to be inefficient for SC in general and for serial acquirers in particular in the young phase. But I personally think prices around or above 300p 8/22 are realistic. I personally anticipate a strong FY21 and expect growth over the broad growth factors for FY22 of 25-30%. In addition, I see potential arising from further moderate multiple expansion as the market prices out the SC discount and SDI's valuation aligns with the peer group mean. But I don't really like these short-term thoughts on SDI, which is why I will hold back here. I am very long-term oriented and consider SDI a very long-term investment. There is a very large potential via the smart buy and build strategy. SDI has a portfolio of companies oriented towards less cyclical sectors. There are strong cross-selling effects and scalability. Regional expansion and expansion into adjacent sectors, which can be implemented via add-on or platform acquisitions, provide further strong growth opportunities. SDI generates a significant proportion of its revenue from recurring regular sales. The stable and constantly increasing CAshflows are also predominantly achieved in a broadly diversified manner across various sectors and regions and in rather less cyclical sectors, which should ensure that the CAshflows remain consistently high over a full economic cycle. Serial acquirers, especially in the early and still very dynamic growth phase in which the broad growth factors are in expansion (change YoY %), are real compounding monsters. With high profitability (ROICE over 20%), the strongly rising FCF can always be reinvested in high-quality acquisitions and thus further accelerate the compounding rate and thus growth. The problem that many investors have is that conventional valuation methods have problems valuing the potential of future acquisitions and the resulting crosselling and scalability potential of such powerful, predominantly M&A-driven growth machines (organic growth at SDI is nevertheless extremely robust and high at ~8%). I think we will continue to see 1-2 acquisitions/FY at SDI in the long term. However, these are my personal assumptions. They only show a brief outline of my valuation. I am heavily invested in SDI. Always check the information yourself. Everything I write is NOT an investment recommendation!
sweetunicorn: Personally, I think HAlma is definitely valued very high and the risk/return ratio is therefore not adequate for an investment. A great company is not a great investment at any price. However, when I look at SDI as a whole and compare the future potential with the strong growth factors to the average peer group valuation, I find that SDI is still very attractively valued. However, to recognise SDI's great long-term potential, it is necessary to study the business model - company/subsidiary, management/people and target markets in detail and to consider the stage in the company's growth cycle. I think SDI, as an extremely potent serial acquirer/compounder, will still create very very high shareholder value. I have written numerous posts on SDI on my Twitter account.
sweetunicorn: SDI can be compared well with Halma because of the very similar structures... let's do a quick evaluation comparison on a forward PBT basis. ... SDI is trading at 21x fwd PBT (profit before tax) (based on the very conservative forecast of SDI management from the last TU with forecast FY22 PBT 8.7m GBP). Whereas I personally believe SDI to have a forward growth factor of 25%-30%. Assuming 15% profit growth for Halma over the next 12 months, which I personally find very sporting given the lack of acquisitions/M&A growth and 5y PBT growth of ~10% p.a.), this gives Halma an estimated FY22 pre-tax profit/PBT of ~GBP307m, which at the current share price means Halma is trading at 33 times fwd PBT at about half the growth factor of SDI! Personally, I think the huge potential of SDI is still misunderstood by the market because investors regularly fail to recognise cross-selling effects, scalability and opportunities for regional expansion as well as the impact of future acquisitions in such high-performance serial acquirers. An intelligent buy and build strategy offers almost unlimited upside growth opportunities through regional and sectoral expansion. No investment recommendation! Data and figures must always be checked by the investor! Note: I am very heavily invested in SDI! ... and therefore probably extremely biased ;-)
sweetunicorn: The market is taking steps to reduce the strong valuation discount to the peer group. SDI has more than twice the average growth across the broad growth factors of the peer average, but is still trading at a significant valuation discount to FCF BAsis. Serial acquirers should always be valued on an FCF basis. Currently, the market is trading SDi at a Fwd FCF factor of GBP 5.5m for FY21. I expect a FCF FY21 of GBP 7m. This would mean that SDI is currently trading at MC/FCF 28x (peer group average is 36x). If I assume 35% FCF growth for FY22, which is very conservative, and factor out the COVID support for FY22 (SDI 5y FCF growth ~100%), I arrive at a fwd MC/FCF for FY22 of 21x at current prices. If one assumes that the market will grant SDI a peer average multiple as it matures, this results in a share price potential of ~70% for the next 14 months until the publication of the FY22 figures. In the long term, SDI management expects organic growth of ~8% and additional M&A growth of ~20%. I assume long-term growth across the broad growth drivers of ~25% p.a. I have written a few things here about SDi... Posts are not investment recommendation. Check information yourself.
rivaldo: SDI are one of the two main tips/"Great Ideas" in today's Shares Magazine in a page-length feature. They conclude that SDI trades at a 16% discount to JDG, and: "We see this gap narrowing and mid-teens earnings growth to keep pushing SDI’s share price higher." The main thrust of the article sees SDI as a mini-Halma, acquiring good value businesses "that add consistent cash flow and profits to the overall group." And: "Its share price jumped 33% on 10 February after telling the market that it would smash forecasts. The company secured material follow-on orders for its Atik cameras business, proving kit for real-time PCR DNA amplifiers, clever medical kit that allows us to test for Covid infection by studying genetic code. Given that the Covid-19 strain is stubbornly sticking around, and may do for some time, there could be plenty more PCR test-based orders over the coming months, but SDI has plenty of other opportunities beyond the pandemic. For example, the near-£7 million acquisition of Monmouth Scientific last year provides a range of clean air solutions to healthcare and science customers, such as clean rooms, which could take SDI into the booming semiconductors space."
fillspectre: Thanks for that Riv. Looks like Monmouth was a very good buy. Could its star eclipse that of Atix? Do you think the share price is drifting downwards ahead of result because some think they can't live up to the recent uptick in the share price? Fils
rivaldo: SDI are already confident enough to tell us - a year in advance - that they will "substantially exceed the market's sales and profit expectations for the year ending 30 April 2022". Assuming they achieve forecasts, they will have trebled their EPS in just four years, and grown PBT from £2.3m to £4.3m in two years and then to £8.8m in the four years. Given that confidence, it's likely imo - particularly given the Board's usual caution - that the figures quoted will be on the conservative side. Which means that SDI have a good chance of exceeding these figures too. Plus there are likely to be more earnings-enhancing acquisitions every so often. The secret is out, and SDI are no longer "cheap". But the market is always happy to pay larger multiples and increased ratings for the type of visibility that SDI currently have. Particularly once a management team have gained the market's trust over a long period as SDI's have.
ymaheru: I’m a long term holder also. I think the share price was low a few months ago. I couldn’t believe it was staying put at 98p(Ish) and then suddenly it has shot up. Now, it seems closer to fair value. I know growth this year had been great, but SDI don’t always grow EPS at a strong rate, so I’m surprised share price is this high.
sev22: Aim's magnificent seven quality shares. London's junior market leads the way in this month's Alpha quality screen. February 1, 2021. By James Norrington, Investors Chronicle. Aim stocks are once again scoring the best against our Alpha quality screen rules, with 37 companies passing at least 7/9 tests of which seven companies scored 9/9. This month’s magnificent seven includes SDI Group (SDI), a company which manufactures niche scientific and technology products. The dream company... The holy grail for buy-and-hold investors is to find a business that is capable of generating high returns on its capital and is able to reinvest all its profits for decades to come, while maintaining those returns. The compound-ing effect of such an investment is what every long-term investor’s dreams should be made of. A company making a consistent 15 per cent post-tax return on its equity and reinvesting all its profits would experience a near-30-fold (28.6 to be precise) growth in its equity base over 25 years, and after 50 years it would be a mind-boggling 1,084 times bigger than when it started. For a patient investor convinced that they have found such a situation, valuation should not act as a major impediment to a purchase. Unfortunately, this kind of dream company is extremely rare and stock screens are too crude to provide the depth of analysis needed to provide confidence that a business may be the real deal. In particular, it is inevitable that some of the shares highlighted by our Alpha Quality screen will be cyclical companies that are enjoying a good run rather than companies that are well placed to sustain high returns through many business cycles to come. What our screen does do, however, is attempt to find pointers for companies that may have the potential to go some way to filling the dream brief. What’s more, buying shares in companies that look attractive based on quality metrics can often prove a profitable strategy, even if many of the shares picked fall short of the buy-and-hold ideal. Our Alpha Quality screen uses two key measures of quality: operating margins and return on equity. We are mindful that debt can flatter a company’s return on equity, so we aim to reduce this risk from the screening results by introducing interest cover tests, to eliminate companies that are aggressively gearing up their balance sheet. The screen uses two key measures of quality, which are operating margins and return on equity (RoE). The advantage of using RoE to measure the quality of a company is that it focuses on the returns that are ultimately of most significance to shareholders: after-tax earnings. However, RoE can be boosted by a company if it increases the amount of debt it carries. That means a high and rising RoE can sometimes simply reflect a reduction in the quality of the company’s balance sheet and little improvement, or even a deterioration, in the quality of its operations. The screen attempts to counter this with its interest cover test, which should help it avoid companies with very aggressively ‘geared’ balance sheets. Focusing on operating margins also provides an assessment of quality at the operating level – i.e. before the impact of debt. ● An operating margin higher than the median average (mid-ranking) stock in each of the past three years (i.e. quality that shows some signs of persistence). ● 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 some signs of persistence). ● RoE higher than it was two years ago (i.e. quality is improving as well as persistent). ● Operating margin higher than it was two years ago (i.e. quality is improving as well as persistent). ● A dividend-and-debt adjusted price/earnings growth (PEG) ratio below the top fifth of stocks screened (ie stocks must not be too egregiously expensive for the growth on offer). ● A price/earnings (PE) ratio above the bottom 10 per cent of stocks screened and below the top 10 per cent (i.e. not a suspiciously cheap or dangerously expensive valuation). ● Interest cover of more than five (i.e. high RoE is not overly dependent on the use of debt). ● Forecast earnings growth for each of the next two financial years. ● Positive forecast free cash flow. Not many stocks pass such a stringent list of criteria. The ones that pass all the tests are listed at the top of the table (SDI is at the top), followed by those failing one test, then those failing two tests as detailed in the ‘Tests passed’ column. All stocks must pass the test for three-year, higher-than-average RoE and margin to feature in the table. While the primary ranking of the stocks is based on the number of tests they pass, inside each of these groupings stocks are ordered according to their attractiveness based on operating margin and three-month share price momentum (applies to SDI).
hastings: Put together the below which may be of interest. Last week saw Cambridge based SDI Group releasing an end of year update to the market, which was, by and large on the day received positively. Indeed, the share price moved northwards, as the company announced that full year 2020 results would be in line with current market forecasts. Of course, as in keeping with other companies now updating or reporting, SDI has understandably withdrawn current market guidance for the financial year ahead which is pretty much to be expected given the as yet, unknown time lines and the potential for disruptance from the Coronavirus. Although as I mention the share price moved forward, some investors clearly exited on Friday, the shares pulling back close to 10% lower at 52p. Some holders appeared to express a nervousness regarding the potential for a collapse in profits for the forthcoming year, whilst others seemed to be expecting an imminent placing. In order to seek some possible clarity on the picture, I once more, as has been customary now since 2013, caught up with CEO Mike Creedon and Chairman Ken Ford. On the issue of a near term placing as some have suggested could be in the offing, Ford dismissed the notion, telling me that they do not currently need to raise cash and referred me to the content of the release. Within that, SDI referred to its sporting a strong balance sheet that holds cash in excess of £4.5m which standing against bank debt of £8.9m looks comfortable enough. Obviously, the current lock down situation brings disruption and uncertainty, but given that we know that the economy is surely going to have to open up sooner rather than later, as a holder of SDI shares I remain comfortable with the statement. As others will know within SDI's broad and diverse interests there is some decent exposure to the health sector along with others supporting that. Creedon informs me that some aspects of the group have been designated as essential businesses and as part of that are involved in providing their customers with components for medical and scientific products used in the fight against COVID-19. There is no inkling as to what these may be involved in, confidentiality playing a part, but it is certainly welcome news that SDI is playing a part in a fight against the virus and that the group remains profitable and cash generative. No doubt some may view the removal of future guidance as a fly in the ointment and have obviously already made their decision on that. However, the team here navigated by Creedon and Ford has done an excellent job over the last five years and under their leadership, I'm happy to stick with the story which remains an attractive one for ongoing growth. Both repeat the acquisition mantra, which not surprisingly remains an important ingredient to future growth here and Creedon says that although there is nothing on the agenda right now, they continue to look. He adds that he is hopeful that there will be a number of acquisitions available at the end of this pandemic. As bad and unwanted as the current lock down situation is, in relation to the former, SDI could find biding its time provides for some decent opportunities further ahead following on from previous excellent acquisitions. Any future buy is likely to be at the smaller end which Creedon confirms will be funded from its own resources as opposed to going back to the market. Looking at the share price graph, SDI has traded in a 52 week range from a 20p low up to a 92p high, which was marked by a sharp retrace to 40p last month, the result of the global market meltdown. It is probably fair to say that the high was very much up with events, whilst the 40p floor provided for an attractive entry point for others who had seemingly missed the boat able to get on board. Right now of course, we are very much dealing with unknowns and uncertainty's where often cool heads are lost in moments of panic and where logic often goes out of the window. From a personal perspective in the case of SDI, I'm happy to hold and await for further developments whilst a further reversal in the share price to the March levels may well provide for another buying opportunity. Each to their own of course, but given Creedon and Ford's belief in continued organic growth progress and the potential for further additions, then SDI surely remains an attractive proposition for the long term.
Sdi share price data is direct from the London Stock Exchange
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