Shearwater Share Discussion Threads

[northwards] 08/12/2021 08:14

Must be an institutional seller ...

[spawny100] 08/12/2021 08:10

95p? That's outrageous. How? Doesn't inspire confidence at all. Might make one conclude the company is run by shysters.

[lammylover] 08/12/2021 07:52

Nice buy by Chairman. 185k at 95p. Now holds 6.8% of company.
Lets hope the other 235k block shifted at 95p has gone to another board member..

[outlawinvestor] 08/12/2021 07:47

I think there a large sell well below market price.

Gotta be... Someone wanted to sell... the company broker asked around if anyone was interested and David Williams stepped up... share price would have tanked even further if the load went to MMs.

There's nothing to say the share price still won't tank, markets often like to price shares below whatever last price was paid by a director!

[weatherman] 08/12/2021 07:39

I think there was a large sell well below market price.

[drew lonmenob] 08/12/2021 07:23

95p ?

questions need to be asked about that

[dunns_river_falls] 08/12/2021 07:22

Big vote of confidence, not sure how they got that price!

[weatherman] 08/12/2021 07:15

Director buying stock.

[lammylover] 07/12/2021 20:49

Mkt cap is less than £25m, no debt and approximately £2.5m profit.
p/e is ludicrously low, and they have already said that they are focused on more profitable business and margins in H1 are up.
Just needs group to deliver on H2 revenue goal of around £20m turnover (H2 is always their stronger half) and hopefully pick up some new contracts.
They've opened up a new location in the Netherlands to service customers.
Cheap as chips at 110p. A HOLD for me.

[lammylover] 07/12/2021 20:49

Mkt cap is less than £25m, no debt and approximately £2.5m profit.
p/e is ludicrously low, and they have already said that they are focused on more profitable business and margins in H1 are up.
Just needs group to deliver on H2 revenue goal of around £20m turnover (H2 is always their stronger half) and hopefully pick up some new contracts.
They've opened up a new location in the Netherlands to service customers.
Cheap as chips at 110p. A HOLD for me.

[weaverbeever] 07/12/2021 19:53

Ok. So I bought here a few months ago. Should I sell up? Have you sold up?

[lammylover] 07/12/2021 18:17

Someone's dumped a 185k block and a 235k block of shares today at 95p.
I hope that's the end of shares being sold at low prices and we may see some movement north again - just needs a decent contract win and / or some investor tip.

Agree with the comments - the board need to leverage some new business out of the £40n bolt on acquisitions - surely it can't be that hard to sell software / support in a hot sector where cyber security is paramount to businesses...

[watcher13] 07/12/2021 12:01

Very clear 2LB and I totally agree. I backed this mainly because of David Williams' track record, particularly on 'buy and build' but this has been a total disappointment and I wonder whether DW has really committed himself to driving the business and the management forward - a bad company in a good sector - and I don't currently see any signs of that changing

[2lb] 06/12/2021 20:28

Not sure that is a fair comparison - NCC has gone from £1.80 to £2.30 over the past 3 years although it has taken a whack recently.

SWG in the same time period has gone from £3 to £1.06

Although there is some crossover in certain areas of capability they are also very much David and Goliath in terms of scale and over the years NCC has (largely) got it's M&A right whereas SWG has consistently overpaid and then failed to extract any value from acquisitions.

Latest prestation laid bare the financial reality of Shearwater on the financial slides where the "adjusted EBITDA" had to be broken down to actual profit which is negligible.

Problem still remains that organic growth is negative, paper is unwanted as collateral in M&A conversations and cash to hand is not enough to buy anything of interest or value - so what is the plan?

Simply describing yourself as "award winning" in all your presentations is an empty opening especially when those awards are generally a tad mickey mouse in nature.

I can't see them being 'taken out' - they aren't an attractive target for anyone when you could simply buy the good people and buy the customer base with an aggressive commercial attack which would mean forking out much less in comparison.

H2 will be stronger than H1, no doubt, but it won't signal any sort of step change in trading and the risk of losing on of their two primary clients is always lurking..

[weaverbeever] 06/12/2021 18:55

NCC does similar stuff (which I also own). That's way down also. I've read the wider sell off in tech shares has also brought down the IT and web security businesses. I'm not sure it's something that's unique to shearwater.

[super squid] 06/12/2021 17:54

Slowly but surely disappearing as a prospect. No ideas, no growth and no prospects. At least when it hits the low 90s someone will take notice and put it, and us, out of our misery by a 'take-out'. 120p , perhaps ?

What a tale of woe and mismanagement and in a sector that has nothing but promise and potential.

[lammylover] 26/11/2021 18:19

Yeah the value placed on SWG is clearly daft and that's the craziness of markets!!
Mkt cap at 115p is £27.4m with £4.4m cash and it made £2.4m clean profit last year (more expected this year with bigger margins)50% of revenue locked in for H2. New location opened in the Netherlands to meet customer needs..

I listened to a programme on radio 4 last night about decision making. Charlie Munger (the sidekick to Warren Buffet was on) He was talking about how people are wedded to the efficient market theory when they make decisions and believe that everything is priced correctly at all times...
He provided an anecdote about an economist who spotted a 50 dollar bill on the sidewalk, but didn't pick it up, because it can't have been real...
The economists reasoning was that if the dollar bill was for real, then someone else would have picked it up...!!!
He then said he and Warren went looking for businesses that were shunned by others, but were clearly mispriced....and that the efficient market theory was clearly a nonsense..

[northwards] 26/11/2021 13:36

About a £25m market cap now. ?

[sev22] 26/11/2021 12:17

Investment Thesis.

In our view, Shearwater offers investors three key attractions:

▪ Exposure to the fast-growing and secular expansion opportunity of cyber security provision to corporate clients. This market is well-known and highly attractive. It is competitive but the various businesses have established niches, strong customer bases from which to reference, and many years’ experience of operation.

▪ Software-style gross (and, over time, operating) margins from high-quality own-IP software products, being cross-sold by large and strongly performing services businesses, notably Brookcourt but also Pentest and Xcina.

▪ Opportunity to enjoy medium-term earnings growth, driven by a ‘rebound’; from depressed Covid-impacted trading, by a newfound clarity, drive and focus across the previously disparate group, and by acquisitions, which we believe are now likely to be effected as the group benefits from its stronger position and market backdrop.

[sev22] 26/11/2021 12:00

Progressive Equity Research have a detailed report out today on the Shearwater Group (free access) titled 'Cyber Security for the next generation' (intro below):

Shearwater is a group of businesses with a single purpose and common goal: working with clients to protect their businesses against many varieties of digital threats. This note describes each business within the portfolio, and positions these in the context of the group strategy. We believe the business to be well-placed to benefit from the undeniable ongoing growth in the cyber security market.

▪ Cyber threats are growing. Investors need no reminding of the risks within business operations – not a day goes by without one large corporation or another falling victim to some kind of attack. As well as increasing in frequency, these attacks are more complex, more expensive to deal with, more damaging to brands, and more likely to lead to regulatory pressure or even fines.

▪ Defence is complex. Faced with threats of this magnitude and severity, almost every large corporation is working to anticipate, avoid and counter the most significant dangers. Most organisations, however, are also trying to make their infrastructure more flexible, more connected (to the Cloud or otherwise) and more accessible to home workers. These conflicting dynamics lead to significant complexity and difficulty in the provision of a robust, secure and modern IT infrastructure.

▪ Shearwater’s offering is compelling. As we will describe in this document, Shearwater exists to offer a range of different types of security and protection, focused on different threat styles, and delivered in different ways. We believe that, between the five units, Shearwater covers a good proportion of the most likely dangers to an organisation, positioning the group well to capitalise on the current opportunity and to deliver on long- term potential, including through M&A in the near to medium term.

▪ FY22 interim results. The interim results demonstrate a good deal of resilience in the face of the effects of Covid-19, plus clear evidence of a bounce-back in the advisory business and an improving mix, with an increasing proportion of higher-margin software and advisory revenues. Our estimates reflect strong growth in revenue and adjusted EBITDA.

We believe that Shearwater is well-positioned to push forward with its strategic goals, many of which were understandably held back by the Covid- 19 pandemic. We take comfort from the solid recent results, and await further newsflow across the remainder of the year.

[lammylover] 26/11/2021 11:09

That's another 41k buy gone through at 1105 this morning. Paid 118.5p.
Someone dumped 24k at 115.13p earlier - must have been desperate....

[lammylover] 26/11/2021 11:09

That's another 41k buy gone through at 1105 this morning. Paid 118.5p.
Someone dumped 24k at 115.13p earlier - must have been desperate....

[lammylover] 25/11/2021 12:56

No need to apologise SEV, I had to look twice as the size, price and even time of trades are all identical. Sometimes I get duplication on my cheap and cheerful level 2 system, but the total volume traded, confirms that all 3 big block trades went through - good news indeed!