Somero Enterprise Share Discussion Threads

[rivaldo] 12/1/2018 11:40

Stepone68, the recent rise was due primarily to the passing of Trump's tax cuts and their beneficial effect on SOM - though optimism about the trading update was also natural given prior bullish outlooks.

I hadn't realised Paul Scott was a SOM holder - he's commented as follows this morning:

"Positive update from Somero Enterprises Inc (LON:SOM) today (disclosure: I have a long position)- a very nice, niche business, which makes the laser-guided machines used to lay perfectly flat concrete floors (very important for warehouses). Being based in USA, it should hopefully benefit from tax reductions.

Paul.

EDIT: I've just seen a broker note, upgrading 2017 EPS forecast by 7.7% to 29.5c, and 2018 by 7.0% to 36.8c. That translates into 21.8p and 27.2p, giving a 2017 PER (based on share price now of 360p) of 16.5 times, and a 2018 PER of 13.2.

Conclusion - it still looks cheap, based on 2018 forecasts. Also note that it has a strong balance sheet, and reports net cash today of $18.5m. Positive outlook comments too. Very nice."

[thelongandtheshortandthetall] 12/1/2018 09:55

Might get SOMe good press over the weekend.
:)

[its the oxman] 12/1/2018 09:20

Nice update and every chance of testing 400p now.

[alphabeta4] 12/1/2018 08:57

From Finncap morning note 'accordingly we upgrade our eps forecasts by 7.7% and 7% respectively'. Gather referring to their 2017 and 2018 numbers.

[rivaldo] 12/1/2018 08:40

Finncap have raised their target price to 450p (from 420p), so still plenty of upside:

[interceptor2] 12/1/2018 08:28

A lovely trading update, particularly pleased to hear that the US and Europe are continuing to perform strongly, but there were plenty of other positives in this statement.

Bodes well for the new financial year.

[adamb1978] 12/1/2018 08:00

As always with these guys, performance ahead of expectations and their market communication is clear and concise and they've even bettered their usual communication by saying what they mean by 'market expectations'.

EPS probably around the 25p market for the year just finished so a PE of say 14x and a turn or so lower excl cash. Given the increased cash buffer, I doubt we'll get another special divi til the end of this year however thats not really a problem

All very good

[cfro] 12/1/2018 07:47

All in all a very good statement.

[soundbuy] 12/1/2018 07:36

That'll do........... :)

[gersemi] 12/1/2018 07:33

Great company

[rivaldo] 12/1/2018 07:27

Beautiful stuff...again.

EBITDA to be "comfortably ahead" of expectations.

And "net cash at 31 December 2017 is expected to be not less than $18.5m, well ahead of market expectations of $16.5m".

America and Europe are storming ahead - and encouragingly India and China are both beginning to motor.

And looking ahead, we can expect another special dividend, plus:



"Following record results in 2017, the Board is confident in the Company's ability to deliver another year of profitable growth in 2018 as the underlying market conditions in our core markets remain positive and as the Board continues to see significant growth opportunities in our other territories. The Board's confidence is further supported by recently enacted pro-growth US corporate tax law changes which are expected to stimulate increased economic activity in the Company's largest market."

[cfro] 10/1/2018 11:47

Nice to see the breakout and re-rating continuing here.

[thelongandtheshortandthetall] 09/1/2018 17:30

Cheers
Read it recently. Enjoyed it.
Food for thought ay.

Well done on your holding here.

[smallcapinvestor1] 09/1/2018 17:20

Yes that's the book

[thelongandtheshortandthetall] 09/1/2018 17:17

Well done smallcap
Was the book 100 baggers by christopher mayer?

If what was it my i ask.

[smallcapinvestor1] 09/1/2018 17:15

Yes I started buying in at 10p so 1000p from my first purchases will be a hundred bagger for me. Having just read a book about how to find hundred baggers this has all the right ingredients for me. The only one it misses on is paying out dividends and special dividends rather than reinvesting its cash at a high ROI.The key will be hanging on. 100 baggers normally take up to 25 years.

[stepone68] 09/1/2018 16:50

Ha ha, you are right, sorry!! maybe he meant a 10 bagger?

[rivaldo] 09/1/2018 14:22

Stepone68, 100 times 40p is 4000p by my error-prone calculations! SOM are a good company, but not that good......

As I said, if anyone bought at say the 10p low then a hundred-bagger would be 1000p, which is conceivable I suppose if SOM achieve sector dominance in China, India etc as they have in the rest of the world.

[stepone68] 09/1/2018 12:04

Rivaldo - approaching hundred bagger would imply 40p-ish purchase which he could have done back in 2013.

[grabster] 09/1/2018 11:05

Share price is now 3x where it was when this thread began 4 years ago.

[martinthebrave] 09/1/2018 10:46

rivaldo Well summarised. Big benefits for all $$$$ earners for the next 12-18 months. I nibbled a few more #SOM this morning.

[rivaldo] 09/1/2018 09:08

Finncap's note yesterday supporting their increased 420p target succinctly summarises the US tax reforms I've been banging on about as follows:

"Tax changes. The US tax reforms proposed by the US President passed into
law just before Christmas. The main change is to reduce the headline
corporation tax rate from 35% to 21%, effective 1 January 2018. Profits made
overseas are also allowed to be repatriated back to the US tax free, and a
partial amnesty on historic profits at reduced rates. A readjustment of the
company’s deferred tax assets is expected, which will be a one-off non cash
item. In addition, the reforms allow a more generous, immediate expensing of
capital equipment purchases, which is expected to result in customers
accelerating their purchasing of equipment in the short term, while also
potentially stimulating longer-term investment plans by manufacturers."

They've increased EPS for this year by almost 20% to 34.4c, and the forecast cash pile rises to $26.8m - potentially bringing another special dividend.

OT : smallcapinvestor1, you must have bought SOM at around the 10p all-time low? Congrats if so.

[penpont] 09/1/2018 09:04

I notice that one of my other holdings, 4Imprint, this morning released a statement re US tax change and the likely implication for their earnings. Has resulted in a very healthy share price rise:

[smallcapinvestor1] 09/1/2018 08:22

New all time high.. Nice. Patience is a virtue. This one could easily end up being a hundred bagger for me from my purchase price.