Somero Enterprise Share Discussion Threads

[shanklin] 07/1/2016 08:24

Its a shame SOM talk about EBITDA rather than PBT. It would be far more informative if they focused on the latter rather than a measure which is not highlighted in published broker estimates. What they have said re EBITDA seems positive but, in the absence of a broker note, provides me with no useful information whatsoever.

All rather unfortunate IMHO.

[rivaldo] 07/1/2016 08:22

az4hr, because:

a) it had been oversold and so is extremely good value imho, especially given today's news
b) it's quite a tightly held share, so decent buying should be nicely rewarded (the same applies of course in the opposite direction)

[davr0s] 07/1/2016 08:20

That's not small volume - we've only been open 20minutes and we already past recent whole day volumes

[az4hr] 07/1/2016 08:12

Don't understand why it's gone up so much on such small volume

[deanowls] 07/1/2016 08:09

Excellent, I just need LVD to do the same now.

[market sniper3] 07/1/2016 07:54

NEWS
< Back to list
Somero Enterprises performs strongly in H1

Source: SMW
Somero Enterprises said it performed strongly in the six months since June 30, 2015, particularly in the final quarter with monthly sales at an all-time high in December, which is not traditionally the strongest month of the year.

As a result, the Board is pleased to announce that the Company now expects to report Revenue ahead of current market expectations for the full year. Furthermore, as a result of an improved gross margin performance, the Company now expects to report EBITDA materially ahead of current market expectations for the period.

Demand in the second half of 2015 has remained robust across our core product range with North America and Europe contributing significantly to sales growth while performance in China was healthy and remained stable. The particularly strong finish to the year in Europe and full year performance in the Middle East notably exceeded the Board's prior expectations.

The year-end demand for the Company's products in North America was predominantly driven by technology upgrades and fleet additions, highlighting lengthy project backlogs for our customers that extend well into 2016.

On a product basis, while large line machine sales continue to represent the majority of our volume, small-line revenues, including the S-485 introduced at the end of 2014, were key contributors to growth.

While it is too early to provide detailed guidance for 2016, the Board is confident that it will deliver another year of growth and that the high-level of activity in December will continue into 2016 providing a solid start to the year.

[rivaldo] 07/1/2016 07:35

:o))

"materially ahead of current market expectations"

"the Board is confident that it will deliver another year of growth and that the high-level of activity in December will continue into 2016"

Brilliant stuff.

This company is extremely undervalued and already has a broker price target of 174p - will that now be increased again?

[5oletrader] 07/1/2016 07:13

7 January 2016Somero Enterprises, Inc.("Somero" or the "Company")Trading updateSomero is pleased to provide the following update on trading for the financial year ended 31 December 2015.In the six months since 30 June 2015, the Company performed strongly, particularly in the final quarter with monthly sales at an all-time high in December, which is not traditionally the strongest month of the year. As a result, the Board is pleased to announce that the Company now expects to report Revenue ahead of current market expectations for the full year. Furthermore, as a result of an improved gross margin performance, the Company now expects to report EBITDA materially ahead of current market expectations for the period.Demand in the second half of 2015 has remained robust across our core product range with North America and Europe contributing significantly to sales growth while performance in China was healthy and remained stable. The particularly strong finish to the year in Europe and full year performance in the Middle East notably exceeded the Board's prior expectations.The year-end demand for the Company's products in North America was predominantly driven by technology upgrades and fleet additions, highlighting lengthy project backlogs for our customers that extend well into 2016.On a product basis, while large line machine sales continue to represent the majority of our volume, small-line revenues, including the S-485 introduced at the end of 2014, were key contributors to growth.While it is too early to provide detailed guidance for 2016, the Board is confident that it will deliver another year of growth and that the high-level of activity in December will continue into 2016 providing a solid start to the year.Somero's final results for the year ending 31 December 2015 will be announced on 1 March 2016.

[rivaldo] 22/12/2015 07:34

FYI Canaccord increased their price target to 174p after the interims:



The US economy, and SOM's sector in particular, still seems to be trading strongly (as is the UK's).

Hopefully next month's trading statement will be as good as last year's was (on Jan 20th).

[davidosh] 04/12/2015 16:32

Well things are going ok over there....

[m.t.glass] 03/12/2015 15:49

Should we presume that, to avoid being undercut by copycat producers in China or India, Somero might need to produce or license production there?

[rivaldo] 03/12/2015 11:16

A new and very detailed analysis of SOM here, with a positive conclusion.

Pretty good summary imo. I do think that SOM's cycle still has some way to go, particularly in the USA and UK. And the potential in China and India is just huge. It surely doesn't matter too much whether China's growth rate is easing or not - if SOM's products gain acceptance and understanding in that market (and in India) following the opening of the new facility, then the potential for growth is explosive:



Conclusion:

"What’s the outlook?

The North American commercial property market appears to be very strong at the moment. This is supporting Somero’s profits in the face of weakness elsewhere, notably Russia and China.

Trading is strong in Europe, southeast Asia and the Middle East. Despite the current weakness in China, there are longer-term opportunities for growth in this market. Somero’s brand recognition is still low in China, but understanding of advanced standards of flatness is growing and the firm is investing in marketing to capture this growing demand.

There’s also the appeal of the dividend. Investors who bought Somero shares when they started to rise three years ago could now be enjoying a yield on cost of 8-12%. That’s worth holding onto for a little longer, in my opinion.

Overall, my view is that Somero’s strong balance sheet and modest valuation offset the cyclical risks, and provide worthwhile growth potential".

[melody9999] 01/12/2015 14:07

After watching for a while, decided to buy in this morning. May need some patience if Polar continue to sell but just see this as a buying opportunity and technically this looks a good place for the upward trend to continue

[danzac39] 01/12/2015 09:40

Finncap appointed as joint brokers. Should be a positive

[rivaldo] 01/12/2015 08:51

RNS - BlackRock continue to buy and are now up to 5.4mm shares, or 9.62%:



It seems Artemis and BlackRock are taking up the slack from Polar Capital - hopefully Polar will stop top-slicing at some point, as I'd hope if they were selling their entire stake they'd have done it a lot more efficiently than this slow dribbling out.

[buffythebuffoon] 27/11/2015 07:27

Fair enough breaktwister. At least I was right about it being a shareholder. :-}

I guess if you didn't see a long term uptrend you'd be silly to buy unless you were a short term trader. It's a good entry point as you say. You certainly got into KNOS at a good price. I bought in at 220 and then watched it go up 70p and down 85p! That's a 'growth' share for you...

Buffy

[breaktwister] 26/11/2015 23:28

I believe it was I who voted up Rivaldos post - reason being that previous poster complained about 20% drop and Riv pointed out that the longterm uptrend was still intact. Nothing more complex than this I'm afraid. And yes, I got in here recently, one of those situations where a mix of fundamental and technical analysis points to a risk/reward scenario that I like.

[buffythebuffoon] 26/11/2015 14:31

Nothing wrong with your previous post. I just found it strange that someone would actually vote it up. It was more in humour than in condescension.

As for forecasting, I'm not in the business of doing that. Forecasting has to be done by analysts, but it's often pure guesswork, and sometimes a nonsense. I've been investing for close to 40 years, and I can tell you that forecasts by brokers, particularly house brokers of smallcap companies, are wrong in the vast majority of instances.

Ask yourself one question Rivaldo..you've opened a training college in China for the first time on the back of sluggish sales in China previously. If it's a success then it will lead to more awareness of SOM. How does that translate to actual sales? I've no idea and neither have you or anyone forecasting. There may be an established trend in the USA and elsewhere, so you can make a stab at it. The forecast isn't for stellar growth, just 'a bit higher than last year' AS ARE THE VAST MAJORITY OF FORECASTS MADE.

The only forecasts to sit up and take notice of are where forecasts are substantially higher or lower than the current earnings.

So Rivaldo, you won't get a forecast from me. I'll likely have a more relevant opinion on who will win the Apprentice; and just like the candidates on that show, I would be more confident of telling you who won't be successful.

My position here isn't massive, but it's a long term holding. I'll likely hold through the next recession as I'll probably top up much lower.

Buffy

[mr_spock] 26/11/2015 10:46

Yes, will the Concrete College turn out to be a good investment? That is what we are all waiting to find out.
Investors have turned cold to any companies that have dealings with China, but SOM are still relatively new there and it is a huge market.

Plus the US market is improving bit by bit.

[danzac39] 26/11/2015 10:30

I feel there is a shift globally,driven in part by the expansion of large global businesses like amazon, from using men with planks of wood to using laser screeds. What should happen is that the overall construction market growth or contraction becomes less relevant than the incremental switching from old to new methods. If that does occur than this tiny company with a global monopoly should be set fair for many years to come.

[rivaldo] 26/11/2015 10:29

Incorrect buffy. The consensus is the average of two forecasts, from Canaccord and Broker Profile Research.

Perhaps some people appreciate info on the thread that they may not otherwise have accessed, or may update their prior knowledge. There's no need to be condescending or rude.

More importantly, tell us what EPS you're forecasting for this and next year since you seem to disagree with the published forecasts.

[buffythebuffoon] 26/11/2015 10:11

Whoever voted up rivaldo's post is clearly invested...or related to him (as am I for now...invested that is), but seriously...eps up from 12.15 to 12.86p? Also, is that not a single forecast rather than a consensus? It's a good company, which is why I went in, and they are in better shape than they were when the price fell off a cliff; but when the next recession bites.....

They spent good money in China, and hopefully there will be a great benefit from the Concrete College (there's a college name you never thought you'd see..). The USA is still their big earner, and hopefully that continues.

Overall I am more optimistic than the very conservative forecast, I'm just very aware that unless and until there is stellar growth in China or a better pick up in sales in the USA, then the growth may not be good enough to compensate for the tougher times that will come 2-5 years down the line.

Buffy

[danzac39] 26/11/2015 07:21

Polar cap reducing holding and artemis upping theirs. This is a buying opportunity. The company is doing great. New head office being built, China training college up and running, new products launching, u.s construction still booming. Europe recovering. Asia growing nicely. Low p.e. High yield no debt loads of cash. If it was a thousand times bigger Warren buffet would buy it. We will always always always need flat floors.....

[buffythebuffoon] 26/11/2015 01:29

With cyclicals it's best to make hay while the sun shines.

Are they making enough bales?

Buffy