Simigon Share Discussion Threads

[n3tleylucas] 01/7/2013 15:37

DGW,

I've been thinking about when this was floated, late 2006, it was already an established private company, having begun in the late '90's.

2006 was a time when markets were recovering strongly from the dot com bust that began end '99 and lasted into early 2003, ending the day of the 2nd Iraq war - and the allied progress - ft100 bounced from around 3,200 I seem to recall.

So 2006 was an optimistic time, the banks hadn't collapsed yet lol ... so that valuation of around £33m with $8m cash was of its own time.

Now? Okay there's been a 21% dilution, (10m into 47m) in 7 years, around 3% PA, not bad at all, none were placed, they all went to BOD & management/staff.

So we've a £12m firm, with almost as much cash as on float, and looking to achieve the growth that has so far eluded them. In a sense they are starting again, but being valued at a huge discount to 2006.

The stock market is different now, bearish in many respects re. smaller companies. But one thing that's obvious, many of the market worries have been focused on funding, but this has never raised any money (bar small loans now repaid) since that 1st day of dealings back in 2006.

This has been self sufficient, in very difficult times, so if and when market sentiment to small AIM's improves, as it surely must, this type of well managed firm could be rewarded. Obviously they'll have to prove they can grow organically and make more money each year. Bottom line.

[noli] 01/7/2013 15:36

The P/E is the most popular way to compare the relative value of stocks based on earnings because you calculate it by taking the current price of the stock and divide it by the Earnings Per Share (EPS). This tells you whether a stock's price is high or low relative to its earnings.

Some investors may consider a company with a high P/E overpriced and they may be correct. A high P/E may be a signal that traders have pushed a stock's price beyond the point where any reasonable near term growth is probable.

However, a high P/E may also be a strong vote of confidence that the company still has strong growth prospects in the future, which should mean an even higher stock price.

Because the market is usually more concerned about the future than the present, it is always looking for some way to project out. Another ratio you can use will help you look at future earnings growth is called the PEG ratio. The PEG factors in projected earnings growth rates to the P/E for another number to remember.

You calculate the PEG by taking the P/E and dividing it by the projected growth in earnings.

PEG = P/E / (projected growth in earnings)

For example, a stock with a P/E of 30 and projected earning growth next year of 15% would have a PEG of 2 (30 / 15 = 2).

What does the "2" mean? Like all ratios, it simply shows you a relationship. In this case, the lower the number the less you pay for each unit of future earnings growth. So even a stock with a high P/E, but high projected earning growth may be a good value.

Looking at the opposite situation; a low P/E stock with low or no projected earnings growth, you see that what looks like a value may not work out that way. For example, a stock with a P/E of 8 and flat earnings growth equals a PEG of 8. This could prove to be an expensive investment.

[diggulden] 01/7/2013 15:29

Is PE based on current earnings, or projected earning? Novice question I know, I don't claim to be an expert!

[dgwinterbottom] 01/7/2013 14:55

Nets - love your "theory"!!! I have been following this for 12 months and have watched its progress albeit rather lumpy in terms of share price.herald Investment mngt obvuiously saw something a year ago when they bought in at around 10p from that time it has moved up rapidly. They have obviously taken into account there is no prospect of dividend payment for the short twerm at least and therefore would appear to be banking on capital growth!!

[n3tleylucas] 01/7/2013 14:43

Yeah DGW, on current earnings of around 1.3p they're not obviously cheap, around a p/e of 20. But if they drift towards support, around 22.5, or even break it to form a flag and dip to 18/19, they'd look better value. There's been some good news lately, I'm thinking the spike may give way to a bit of retrace. We'll see. I'd like to see it settle a bit, I note there's a few 'active' types on London South East giving it the big one! lol ... sometimes wiser to wait a bit when those types are noisy.

[dgwinterbottom] 01/7/2013 14:26

Nets, cannot help agreeing with you that these are rather expensive at the mo, a lot of expectation in the price imo!!

[n3tleylucas] 01/7/2013 14:13

Did a chart late last night, make of it what you will ... wrong one! LOL
Sheet, never saved it! Give me 10 mins sigh

Can't do it until close, cheap sub's lol ... do it later

What it will show is a support line that's held firm on 4 hits, and a resistance line that's not been broken on 3 hits. I'll do it later.

[diggulden] 01/7/2013 14:08

I agree Nets, would much prefer divi's to come from earnings. Cash pile needs to be kept as a buffer or for acquisitions.

Steady she goes seems to be the order for now.

[n3tleylucas] 01/7/2013 13:33

He did mention dividends in the interview, but I sensed he wasn't that keen. In my opinion any future dividends should really come out of earnings, not the cash pile. But that's just me, I'm sure others might feel different lol ...

[n3tleylucas] 01/7/2013 13:21

I got some understanding last night of the 10m shares issued since float in 2006. I had assumed these shares were placed with ii's to raise funds, how stupid of me to think that eh? lol ... None went to ii's, they were issued to BOD & management in an attempt to preserve cash, which was dwindling from the original $8m net cash on admission.

I got a sense this firm is very cautious of cash burn, ie it doesn't want to raise extra funds via ii's ... this would explain the boss's comments in the YT ProAct interview last year (posted in header on my thread), in which he stated he was always mindful of needing a cash cushion.

He struck me as being a sensible fellow, who understands the need to preserve cash ... ie you never know when that rainy day might come.

I've changed my view on a relatively large acquisition coming, I now don't think he's in any rush at all to spend the cash, maybe something smaller, but not big.

[n3tleylucas] 01/7/2013 13:08

Yep, they had it at SimiGon Inc.'s Florida offices, instead of SimiGon Ltd.'s offices in Israel.

[dgwinterbottom] 01/7/2013 08:26

Rather interesting to note that last year the Annual Shareholders meeting took place in the US, at the time made me think Mr Braun may be more deeply involved that just a shareholder?

[noli] 01/7/2013 07:11

Here is another part of Sim: January 24, 2007, the Group purchased the assets of Visual Training Solutions Group, Inc.(VTSG)

[noli] 30/6/2013 21:57

Good work chaps, interesting indeed, so Mr Braun will have some good contacts, whether he is in contact with the bod is another matter.

If you guys come across any distribution network details for Sim please post them as that is where i think the next acquisition for sim maybe.

[n3tleylucas] 30/6/2013 21:22

Ah, floated @ 88p with a 6m share placing, making 37m shares on 1st day ... valuing this @ £32m. So all-in-all only another 10m have been issued in nearly 7 years, despite the share price collapse. That's not bad.

[n3tleylucas] 30/6/2013 21:15

Yeah, he appears to have been one of the founder investors back at float in 2006.

Share price hit around 110p early 2007, then dived to around 4p within 2 years.

[diggulden] 30/6/2013 21:03

Also an advisor for Berkley ventures...



'Jeff Braun Founder and CEO of Maxis (Sim City and the Sims game franchise). A 20-year game industry veteran, Jeff Braun co-founded Maxis with Will Wright in 1987. Under Jeff's leadership as Chairman and CEO, Maxis became world famous for its Sim branded video games. Maxis went public on the NASDAQ exchange in 1995 before selling to Electronic Arts in 1997. Jeff remained with Electronic Arts as SVP North American Studios until 2000. Since then, Jeff has been a mentor and partner for a number of interactive media startups.'

[n3tleylucas] 30/6/2013 20:31

Evening guys, I thought "who is Jeff Braun? He's not BOD or management, but he's got nearly 14%!"

[diggulden] 30/6/2013 20:26

Yea I'm only messing, took Nets off filter a while ago, despite some vulgar, a good degree of what he says makes sense. Clearly an intelligent individual, plus, has a great knack of new threads, I like the new one for SIM.

[noli] 30/6/2013 19:54

He's been a great help dig, its prompted me to fire some questions off to Sim, so lets see if i get a reply, i had a few, lol

[diggulden] 30/6/2013 19:29

Hang on... you can be... civil.... N3ts?

[noli] 30/6/2013 13:23

Ok, i am with you now on the cash front, never been good with figures so you might have to spell it out once in a while. I will have a look at expansion to see if i can find anything as thats where the cash will be going imho.

[n3tleylucas] 30/6/2013 13:06

Nah, cash is around £4.7m isn't it? In sterling? That's around erm, £8m + cash then eh?, yeah ... £8m, so decent value on that measure, bearing in mind what I've just said about valuing cash lol ...

[noli] 30/6/2013 13:03

I thought the market cap of 13 mill, minus the 7 mill cash gives 6 million not 9m.

[n3tleylucas] 30/6/2013 12:59

Good point on cash noli, a small software firm's cash/debt can swing quite dramatically depending on investment needs, cash-flow etc. That's why it's often best not to get too excited about a cash pile, because at the end of the day a business is all about growing profits.

That may sound daft, but I've seen many cash rich firms with very poor profit growth, and firms with chunks of debt that have grown profits very impressively. So the key is always the business, never the cash/debt.