Somero Enterprise Share Discussion Threads

[rivaldo] 09/5/2017 09:55

Just tipped here:



"2 under-the-radar growth stocks with huge upside potential
Ian Pierce | Monday, 8th May, 2017

Ensuring concrete floors are laid laser-level is not the most exciting business in the world, but shareholders of Somero Enterprises (LSE: SOM) certainly don’t care because they’ve seen the value of their shares grow over 1,300% in the past five years alone. And with a major competitive advantage over rivals, a huge potential market size and very capable long-standing management team the future is bright for this fast growing small cap.

The key to the company’s success lies in its revolutionary Laser Screed machine it patented in 1986 that ensures concrete floors are laid incredibly level. This may seem mundane but it is critical for the warehouses of end users such as Amazon, Wal-Mart and Tesco as it increases efficiency, lowers maintenance costs and lessens the risk of catastrophic failure such as huge shelving units falling over.

Having pioneered this technology, Somero has built upon its first-mover advantage by continually inventing and patenting better machines and promising customers 24/7 global support from engineers in any major language as well as on-site training and next day in-person support across the globe. This has made the company the Rolls Royce of concrete levelling and built it a huge moat to entry against competitors that has stood for over 30 years.

The growth prospects for the business are also quite impressive. In 2016 $56.6m of the company’s $79.4m in sales came from its home territory of North America and even in this relatively more saturated market the company increased sales by 15% year-on-year. With sales in other huge markets such as Europe and China accounting for only $8m and $6.4m in sales in 2016 it is clear there is space to grow many times over as the company brings on new sales staff to target these regions.

While investing in AIM-listed small caps can be worrying for some investors, Somero’s corporate governance mechanisms and its CEO, who has been at the helm for 20 years of rapid but sustainable growth, reassure me greatly. There’s also the company’s healthy balance sheet with $20m in net cash, EBITDA margins that rose to 31% in 2016 and continued focus on prioritising customers rather than short-term investors. Add in a sane valuation of 14 times forward earnings and a respectable 2.77% dividend yield and Somero is a company I believe has great prospects."

[panic investor] 04/5/2017 13:00

nice to see it taking a little rest on the way up ! Check out twitter, the new concrete laying courses are going down really well.

[hpcg] 04/5/2017 11:15

I've said this a couple of times on this thread - but if you can hold US companies in a SIPP if you can. As a recognised retirement account there is no withholding tax. You will still have the currency movements of course.

Every broker should be able to provide you with the 15% tax treaty withholding without you having to ask. If they cannot, then leave your broker and get a better one! I have accounts with Barclays, HL and IG. I am winding down the Barclays but it still has its uses in that it will allow dealing on stocks being wound up right up to delist day. Very good for some value situations. They used to be able to get a better price than HL on small UK shares but HL's engine has caught up. HL is very good, with the exception of their exchange rates, which slice a bit much off returns. They are excellent for corporate actions. IG is by far the cheapest that I use in dealing costs, and very good exchange rates. They are less well organised at corporate actions than HL. There is good synergy between IG and HL when it comes to foreign stocks. IG has DMA for a range of markets at no cost if one also spread bets.

[panic investor] 02/5/2017 13:12

I dont hold out much hope for the Trump card, but agree it won't stop this company ! Ahead of the game

[housemartin2] 02/5/2017 13:05

If the 'world class infrastructure' ever gets built - or at least anywhere near the values bandied about. SOM still a good company IMO even without this supercharger

[rivaldo] 02/5/2017 07:37

Cheers CM - should bring in some more interest:

"Somero Enterprises

With President Trump looking to spend $1trn on infrastructure in coming years, I reckon I've found the perfect under-the-radar business to capitalise on this building boom.

Somero Enterprises (LSE: SOM) specialises in producing laser-guided equipment that assists in the installation of concrete slabs. Somero's equipment and technology ensures a high level of precision in concrete surface flatness, resulting in the faster installation of each slab at a lower cost. Although the company has operations in Europe, China, the Middle East and Australia, the bulk of the its revenues are generated in the US.

The laser specialist's shares have surged higher over the last 12 months, rising over 100%, and it's not hard to see why when we examine the numbers. Somero generates a high return on equity (33%), a high operating margin (27%), strong cash flow and has minimal debt. Revenue has increased 76% over the last three years and earnings per share have risen from 13 cents to 28 cents in this time. 2016 results announced in March were excellent, with revenue jumping 13% and profit before tax increasing 22%.

However despite the impressive numbers, Somero trades on a forward looking P/E of 15.3, which seems attractive for a company that should enjoy tailwinds from Trump's infrastructure boom. A dividend of 2.6% is also on offer, further sweetening the deal."

[panic investor] 28/4/2017 08:57

6.67 in Sipp with Barclays

[housemartin2] 28/4/2017 07:58

I received at rate of 5.68p in my TD Trading account on 18 April. This was after US withholding tax of 15% had been deducted. I have a W8-BEN in place (Incidentally TDW tell me when I need to re-submit a new one)

[ragehammer] 27/4/2017 21:35

I asked AJ Bell about completing a W8-BEN form for my SIPP and they said it was unnecessary. I received the 6.67p stated above.

[3800] 27/4/2017 19:21

Thanks for the replies TravellingTrader and Flagon, Looks like my initial concern over getting 5.696p dividend rather than a larger amount was entirely due to no tax being deducted when held in SIPP accounts the very small differences can be put down to different FX rates being used.
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[flagon] 27/4/2017 18:11

I hold SOM within a TDWaterhouse ISA ... received dividend at the rate of 5.696p per share.

[travellingtrader] 27/4/2017 17:04

I have accounts with AJ Bell and received the dividends at roughly the following rates.
Sipp 6.67p
ISA & Dealing: 5.57p (15% tax)

[3800] 27/4/2017 16:40

Still getting to the bottom of the withholding tax question. did the individuals who recieved 6.58p in dividends hold the shares within a Sipp as apposed to an ISA. If so that would explain alot about the amounts recieved. If anyone who recived 6.58p could fill me in on the type of account they have it would sort the issue out for me.
This an extract from HLs website

"A W-8BEN form allows Hargreaves Lansdown to claim a reduction in the US tax on your dividends and interest from US shares. Withholding tax rates can be reduced from 30% to 15%, or to 0% if the holding is held in a SIPP. The form is mandatory before trading US shares. A W-8BEN is valid for three calendar years after the year in which it was signed. A new form must be submitted when the existing one expires, and Hargreaves Lansdown will inform all clients in advance of expiry."

[panic investor] 27/4/2017 13:18

I hold no hopes for that in the USA, just carry on as normal, it's Asia that is important.

[carcosa] 27/4/2017 12:47

There was no infrastructure spending in Trumps announcement which, only a few days ago, was expected.

[carcosa] 27/4/2017 12:47

There was no infrastructure spending in Trumps announcement which, only a few days ago, was expected.

[3800] 27/4/2017 12:37

Ragehammer, I think you have misunderstood the issue over the "different amount dividends" it appears to be more of a 15% tax issue rather than a currency movement issue.
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[gorilla36] 27/4/2017 12:10

rivaldo - Excellent point re US tax rate, but I think it will be a hell of a job to get that through congress!

[rivaldo] 27/4/2017 11:45

I've just posted this on the CAR thread, and the same applies to SOM.

Trump's overnight announcement that US corporate tax should be cut from 35% to 15% would be a big boost to SOM. He faces opposition in getting it through, but it would certainly represent a material windfall to SOM as their current tax rate is 33%.

[mrx001] 27/4/2017 10:31

Still waiting on my dividend from idealing, normally have been very good but lately they seem to be losing the plot.????

[ragehammer] 27/4/2017 10:15

Usually a delay of a week or so won't make much difference. Sometimes it will be of benefit. The problem this time has been that the GBP has increased quite a bit since the General Election was called. So the difference between 17th April (approx 1.253) to yesterday (approx 1.283) is a couple of percentage points. If GBP had weakened by the same amount over that period then the delay would have caused a commensurate benefit.

I use AJ Bell. I can complain to them, but I would rather fix this at source. What on earth are Somero doing sending physical cheques out for dividends in this day and age?

[3800] 27/4/2017 10:00

I hold stock in Somero within ISA accounts with both TD Direct and Selftrade. I got my dividend from TD direct on the 18th April at the rate of 5.696p per share, I am still waiting from Selftrade. Like others here I am wondering if it’s worth using a different broker for this stock as the .88p difference between TD and HL cost me £223 this time and with a special dividend coming up next time it will likely be even more. I am still waiting for the dividend from Selftrade but will post that when it finally arrives.
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