Solid State Share Discussion Threads

[pj 1] 22/2/2017 20:25

Stockopedia has normalised eps of 2017 42.1p, 2018 35.6p

[wjccghcc] 22/2/2017 19:40

PE of 10? Latest consensus forecasts are 34.1p for 2017 and 36p for 2018. That's already a PE of 15.

[pugugly] 22/2/2017 17:08

Got you - if based on p/e of 15 -

[spectoacc] 22/2/2017 17:02

@Pug - agreed re previous peak being due to MoJ. However, bear in mind they got a decent payout from that, reduced debt, and made another acquisition with the money.

In truth, I'm basing it more on p/e - current p/e of around 10, with cross-selling from the last acquisition hopefully to lead to the "e" increasing. They're in an attractive niche, and OK don't benefit so much from the weak £, but they do insofar as their share price is in £s, should a foreign co come calling.

I've stretched it out to a bid approach now :) I'll rephrase - p/e of around 10, earnings set to increase, p/e of 15 would be more reasonable. That's how I get to my ballpark £8. :)

[pugugly] 22/2/2017 16:53

SpectoAcc:- I have not seen anything anywhere else: Not sure I agre with your £8 unless you have a very long time scale as the previous peak appeared to be a result of the MOJ contract that was cancelled (No fault of sOLI that I can see). So a long way to climb back - I would not argue with £5 if next results exceed expectations

[spectoacc] 21/2/2017 12:05

Wasn't a tip per se & now 5 days old so wonder if it's had a nod from elsewhere. Volume not that much mind.

I still fancy it to go a lot higher over time - £8 wouldn't be unreasonable IMO. Though as you say, relies on no nasty surprises.

[pugugly] 21/2/2017 10:11

Moving up - looks as though as a result of money week tip - $64K question will it hold or drop back on profit taking ?? Also very dependent on next set of results.

[pj 1] 21/2/2017 10:10

I've taken some more this morning as it tries to break out of that year high

[spectoacc] 20/2/2017 11:43

Had a little mention in Friday's MoneyWeek as one of 5 shares "investing for growth" - and was by far the cheapest of the 5. Not a tip as such but good to see any coverage.

[my retirement fund] 10/1/2017 11:04

It may be starting.

[bobd29] 08/1/2017 11:34

Spread ridiculously high and recent volume very low, doesn't equate with a company making good profits on a low p/e and steady growth. My logic dictates that a price breakout may be due....any thoughts?

[spectoacc] 05/1/2017 13:57

Inclined to agree. MMs kill it with the spread - and frequently by tanking it - but it has come back every time & does feel ripe for another few quid.

I would say that, as a happy holder! Not so many IHT AIM shares around either.

[my retirement fund] 05/1/2017 12:24

This is due a significant break out imo

[spectoacc] 23/11/2016 08:17

Thanks from me too - though I question the dividend predictions, on the grounds they've paid 12p 2015 & 2016, with no rise in the interims. May be saving it for the Final. They can certainly afford a raise - cover is substantial. But may prefer to use cash for acquisitions.

[pj 1] 23/11/2016 08:13

Many thanks GHF, that makes much more sense

[glasshalfull] 22/11/2016 21:25

Evening all,

SOLI's results were well flagged and I'm surprised that they dropped by 11% on the opening bell simply by motioning that they had incurred a higher tax rate in H1...a factor that impacts full year earnings by only (-2%) as noted in the update below, where essentially the tax rate increases from 8% to 10% over the full year.

PJ mentioned that Stock-o-pedia has earnings forecasts of 42p for 2017. This figure didn't ring true with me, so I also checked Stocko & confirm that PJ is correct.
However, WH Ireland - who are the house broker - have certainly not issued guidance in this area. I had previously posted their forecasts prior to this morning's results indicating 36.5p EPS for 2017 & 37.7p EPS for 2018...so absolutely no idea how Stocko came up with this other figure???

If you care to check back with my posts earlier in the year you'll see that in April 2016 WH Ireland had 36.0p pencilled in.

Anyway, WH Ireland provided the following update on the effect of the increased tax rate (when the share price was 450p) indicating that SOLI's underlying forecasts were unchanged:-

"H1 results are compatible with our core FY17E expectations: we leave revenue, EBITDA and PBT unchanged. However, noting a blended H1 tax rate of circa 15%, higher than our 8% FY assumption and reflecting a reduction in R&D tax credits in the period cf FY15, we move our FY17E tax rate assumption to 10%. This has the impact of a modest reduction in EPS from 36.5p to 35.6p (-2.4%). We leave all FY18E expectations unchanged.

We continue to be impressed by SOLIs underlying progress in building a larger niche electronics business serving core markets such as Military, Subsea, Water, Rail and Security....reflected in both increased operating margins and also the forecast 5-year CAGR in EPS through FY17 of 19%. The rating of 12.6x current year earnings coupled with a 3% yield makes the shares looks attractive at current levels."

I've updated the figures in the header to reflect previous earnings and the following forecasts.

Forecasts (WH Ireland - 22.11.2016)

•​31/03/17 - 35.6p - £3.3m PBT (Div 13p)

•​31/03/18 - 37.7p - £3.5m PBT (Div 13.5p)

---

SOLI remain one of my core holdings.

Hope this assists.

Kind regards,
GHF

[callumross] 22/11/2016 10:11

Think they state that less 2nd half weighting this year. Couldn't understand the fall this morning for what is a company with high quality earnings so have just topped up (although strangely ADVFN marking it as a sell.)

[spectoacc] 22/11/2016 10:06

Ta; difficult to assess due to MoJ contract payout & also the latest acquisition. Last year c.47p annual, thanks to MoJ payout which was substantial, and this latest Half Year shows a 10% increase over that (overall higher) Half Year from 2015. But how much of that is offset by getting no MoJ payout, and how much made up for by the acquisition, I don't know.

Put another way - they're 10% higher than the last Half Year, and the previous year did c.34p annualised without the MoJ payout, so if I had to stick my neck out I'd say c.40p EPS, in which case you're right. But the difference could easily be the acquisition alone.

Any which way, yes - slightly second-half weighted.

[pj 1] 22/11/2016 09:26

Stckopedia have 42p eps,

[foxman14] 22/11/2016 09:08

It was just a top up. Got two 500 chunks at 399.3p and 410p. Placed a further order at 400p but wasn't fulfilled.

[spectoacc] 22/11/2016 08:54

@PJ - what forecasts have you got?

[spectoacc] 22/11/2016 08:37

Completely unable to get any size here, you must have got in just ahead of me!

[pj 1] 22/11/2016 08:35

Are Results normally H2 weighted here? Looks like they have a lot to do to hit forecasts after a brief glance

[foxman14] 22/11/2016 08:30

Yes so am I. So added a few on the drop.

[spectoacc] 22/11/2016 08:15

Perfectly happy with this morning's RNS. Revenue & post-tax falls both easily explained; margin rise also explained & for similar reasons. Divi still more than 4x covered. Sounds like more acquisitions ahead, which would ordinarily make me nervous, but SOLI have a very good record there.

Is well worth a read, beyond the headlines.