Somero Enterprise Share Discussion Threads

[gleach23] 28/4/2023 08:17

AGM statement 18 May I would expect alotto

[alotto] 28/4/2023 08:14

Would the next trading update be in September? I cannot find a financial calendar.

[nchanning] 27/4/2023 11:16

The bear case with Somero is that a normal year for the company is more like $20 million net profit that the company was earning pre pandemic and that the stimulus induced boom years of 2021 and 2022 were an aberration . Then you figure that in an ordinary recession capital spending on construction equipment is normally hit very hard and they could suffer 18 months operating around break even . Then the current valuation makes sense .

[rcturner2] 27/4/2023 06:47

At the current price, even a low dividend of say 25p means that the current dividend yield is 7.6%.

[gnome3] 27/4/2023 03:27

Alotto,
Yeah, I hear what your saying about the cyclical nature of the sector, but how much of this is actually reflected in Somero's business? There was the same assumption when Covid hit until it turned out that Somero's business was far more resilient than the small investor had assumed. Paul Scott mentioned this on Stockopedia and questioned whether the company should be on a higher rating to reflect the undoubted quality of the business. Looking at Caterpillar in the US, they havn't been subjected to the extreme drawdowns that Somero has. I guess it comes down to liquidity and the relative influence that the small investor has on the Somero share price. C'est la vie. More patience required I think.

[alotto] 26/4/2023 17:13

not to mention the share buy back yesterday...

[alotto] 26/4/2023 10:43

£30k is negligible for a director. I would be impressed with £200k plus.

[mfhmfh] 25/4/2023 18:31

Director bought 8,000 shares at 364p on 23.03.23.

[alotto] 25/4/2023 15:43

Gnome, the issue is the cyclicality nature of the sector. Where profits are not predictable to a greater extent the shares sell at a discount. The current valuation is ridiculous though.

[gnome3] 22/4/2023 03:50

Somero's share price seems to be gradually creeping down, and the 50 day moving average dipped below the 200 day average recently. I'm struggling to square this against the value offered by the share price and the huge yield.
I suppose a Yield of 12.7% is telling us that there will likely be a cut in the dividend going forward, but I can still see a very attractive yield even then.
I guess there's a feeling that the growth of warehousing and distribution centers is slowing and that this will impact the profitability of the company over the near term. Having said that, there hardly seems a day that goes by without news coming out of another huge manufacturing facility planned in the US. I think the market may be missing the significance of all this on-shoring of high-tech manufacturing that's going to happen in the US. It just feels like great value at this price, especially for a quality company like this. Just my opinion.

[alotto] 12/4/2023 14:57

I cannot see the price target for last year.. where do you see it? I am in Financials > Forecasts. Do I need to look there?

[carcosa] 12/4/2023 11:30

Look at Sharepad's forecast data page and you will see that price target was set over a year ago when they previously had an earlier target price of 850p when the share price was around 600p

[alotto] 12/4/2023 08:39

Sharepad target price: 672p.
Will we ever see this?

[carcosa] 28/3/2023 15:54

Over the years I have followed the occasion company that either created a dual listing in USA or moved over entirely to the US markets and have not seen any noticeable better valuations. Indeed from this Financial Times article:




“There has been a narrative over recent years that the US delivered superior valuations on a like-for-like basis, even if the evidence did not support it,” said Charlie Walker, head of equity and fixed income capital markets at the London Stock Exchange. “That view is certainly changing now.”

and

"However, data from Dealogic and analysis by the Financial Times show that large European companies, excluding those from Russia, that list in the US have consistently underperformed"

That underperformance has ranged from 15 to almost 50%.

There 'may' be a case to answer wrt pharmaceutical, Tech and high growth but loss making companies but the evidence is questionable at best. The real issue is that a company like SOmero would be completely lost in a US listing because they, like the vast majority of FTSE 250 companies are very very small for the US market.

A company I can think of that recently entered into a dual listing is Ferguson - mkt cap GBP22 billion which is in the same broad industry as Somero and the valuation does not appear to have noticeably changed.

In summary I cannot see any supporting evidence Somero valuation would be "significantly higher' if quoted in the US.

[jake2022] 28/3/2023 13:21

I'm a long term shareholder and this is a company how I like them with a careful management, virtually without debts, interesting dividend yield... Only thing I still don't understand is why a US company is still quoted on this part of the LSE. I can understand the reasoning when taking the company to the market, but in the meantime I don't think these reasons are still valid. Stock price would be significantly higher if it was quoted in the US. In my opinion.

[rcturner2] 23/3/2023 08:07

I don't think there is a single person on this thread who isn't aware that this is a cyclical stock. The doesn't make it a bad investment but it means you have to be more careful when you buy. I also happen to think that Somero is a very high quality business and has lots of good financial points. Sit back and enjoy the dividends.

[triskelion] 22/3/2023 17:18

"Over the years, I have seen plenty of investors mistake a cyclical company with peak profits for a cheap growth stock only for them to find out the shares were cheap for a reason – profits were about to go down."

- Phil Oakley Ionic Info. article, 8 March 2023


I guess they already have, "somewhat".

[eggbaconandbubble] 21/3/2023 16:23

Although I see little downside here. The only way up is either they get behind the huge potential export market or someone takes them over.

In the meantime the yield is well comfortable.

[alotto] 17/3/2023 06:59

Egg, where did you find the presentation?

[eggbaconandbubble] 16/3/2023 08:34

I listened to the shareholder presentation.

I'm still of the opinion that SOM are missing out on huge export potential.

They keep banging on about the Autralian market as if it's the biggest thing outside of the US.

These guys need to have a geography lesson!