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Somero Enterprise Inc.

4.00 (1.27%)
Share Name Share Symbol Market Type Share ISIN Share Description
Somero Enterprise Inc. LSE:SOM London Ordinary Share COM STK USD0.001 (DI)
  Price Change % Change Share Price Shares Traded Last Trade
  4.00 1.27% 320.00 150,050 08:00:45
Bid Price Offer Price High Price Low Price Open Price
315.00 325.00 321.50 316.50 317.50
Last Trade Time Trade Type Trade Size Trade Price Currency
17:25:30 O 1 320.00 GBX

Somero Enterprise (SOM) Latest News

Somero Enterprise (SOM) Discussions and Chat

Somero Enterprise Forums and Chat

Date Time Title Posts
05/6/202315:31SOMERO - laser guided construction equipment3,536
25/9/201500:12SOMERO - laser guided construction equipment14
10/1/201418:33Somero - Laser-guided construction equipment92
26/2/201307:28somero sales up 47%-
09/1/200912:39Time to buy SOM and tuck away ????15

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Somero Enterprise (SOM) Most Recent Trades

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Somero Enterprise (SOM) Top Chat Posts

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Posted at 04/6/2023 09:24 by alotto
Just read this one, things are getting suspicious

Posted at 27/4/2023 03:27 by gnome3
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.

Posted at 22/4/2023 03:50 by gnome3
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.

Posted at 12/4/2023 11:30 by carcosa
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
Posted at 01/2/2023 14:35 by carcosa
Faz, I live in S.E. Asia having left UK for good in 1990's. You don't have to worry about me thank you. As it happens I sold my personal holding (first bought in 2015) in early 2022 but I also manage other people's portfolio's and under the terms of the management agreement I cannot sell SOM until end Q1/23 at the earliest; hence my continued interest in SOM.

RCT, The issue though is that US non-residential has been going through a boom time and Somero have not been able to capitalise on it. Plus management have ignored overseas markets for years and have failed to make meaningful acquisitions which was their stated goal. Add in all the other management failings that I have expressed on these boards for the last 12-18 months then I continue to see a SOM as a niche company failing to execute; just plodding along.

I have also said on more than one occasion that the dividend is the only reason to own SOM; as part of an income/retirement portfolio.

Posted at 07/9/2022 08:45 by carcosa
"SOM delivered exactly as they predicted."

Historically PI's claimed SOM tend to under promise and over deliver. Not this time. Yet PI's give them a 'pass' on this?

SOM's predictions were a while ago yet since that time inflation has increased considerably. Apply that to the revenue number and in real terms revenue has decreased.

Whilst some areas of SOM are expanding the existing facilities are, to the best of my knowledge, not affected. So the number of 'production units' should not be affected. That does not seem to gel with the revenue numbers. Would be interesting to see how fewer units/changes in mix actually are. But either way, if you can't generate increased revenue under current construction climate then when will they?

Totally accept cost of goods etc will go up quite a bit. I modelled 10% based on 8% inflation rate as a baseline. Add in additional capital expenditure, staff costs etc then I don't see profit growth returning for quite a while, if at all. Cost of operation is going to be much higher than they probably modelled once new facilities are online.

Current share price seems about right but I don't see much of a future for PI's outside of the high yield on offer alongside the exchange rate.

Posted at 25/6/2022 20:47 by kenmitch
Mr T

The simple fact is that none of us can know what the share price would have done without buybacks so we can never claim they worked. But we can claim they didn’t work when, as with Whitbread, a £2.5 billion buyback is done at high prices never again reached and so big capital loss for shareholders supposedly rewarded by those buybacks.

E.g would Whitbread share price have fallen even more but for the buybacks. Or would Apple, Microsoft etc have done just as well or even better without buybacks? It all comes down to investors buying and selling. When shares are being priced by market makers etc no consideration is given as to whether or not that Company has bought back their shares. In falling markets Companies that have bought back heavily see their share prices fall just as much or more than Companies that did not buy back. And commentators never suggest in falling markets that Companies buying back should see better support than those that didn’t.

As for Next, I agree that as they have bought back a huge number of their shares, and because they will only buyback when they consider their share price is cheap it is likely that the Next share price is higher than it would have been without their buybacks. But even Next have bought back at share prices far higher than the current price.

Admittedly it was years ago, but Morgan Stanley did very detailed research on the effectiveness of buybacks and found that time and again Companies that bought back, subsequently saw their share prices underperform others in their sector that did not buyback.

Finally to your Apple, Microsoft example. They too bought back at the peak of the bull market and ahead of heavy recent tech sector falls. Indeed buybacks peak near the top of bull markets and there are far fewer when markets are cheap.

Posted at 24/6/2022 19:58 by kenmitch
Totally agree with you grahamburn. Buybacks rarely reward shareholders and so often actually penalise them, with those selling being the ones who benefit from them.

A classic example is Whitbread. They spent most of the proceeds from their sale of Costa on a £2.5 BILLION buyback. Those were at share price peak and never again has the share price reached the buyback level. A total waste of a LOT of money and leaving their shareholders with a BIG capital LOSS instead of the supposed big buyback reward!
This happens over and over and over again but STILL commentators who go by the theory instead of the reality continue to promote buybacks. Do they ever bother to look at subsequent share price performance?

So please Somero, don’t succumb to pressure to buyback and continue with those big dividends and special dividends. Unlike buybacks those dividends do reward us with real money!

Posted at 20/1/2022 17:20 by tole top growth stock for 2022Kevin Godbold | Thursday, 20th January, 2022 | More on: SOMA stock price graph showing growth over time, possibly in FTSE 100 Image source: Getty Images.Growth and value are joined at the hip - that's what Warren Buffett and his business partner Charlie Munger agree on.And it makes sense to me. I want to buy the shares of businesses at a reasonable valuation, yes. But I also want those enterprises to work hard to increase their inherent value while I'm holding. And one of the best ways for them to do that is by growing their earnings annuallyGrowth at a reasonable priceBut I'm not the only one who wants that. One investment strategy is dedicated to finding growth at a reasonable price, or GARP for short.And with that strategy in mind, Somero Enterprises (LSE: SOM) attracts me. The company provides concrete-levelling equipment, training, education and support to customers in over 90 countries. And with the share price near 590p, Somero's market capitalisation is around £328m.Since 2015, earnings have been generally rising. But they were weaker in 2020 when the pandemic hit. And I think that demonstrates there is a cyclical element to the company's business. Although the enterprise appears to be expanding, macro-economic events can cause a setback for shareholders.And I'm not expecting an easy ride with this stock. Over the past five years, the share price has risen by around 130%. But along the way, it declined by about 60% between September 2018 and March 2020. Such volatility reveals some of the risks involved with holding this stock.A bullish outlookIn December 2021, the company released a bullish outlook statement on the heels of trading that had exceeded the directors' expectations. Strong trading in North America drove operational momentum in the second half of 2021. Previously, in 2020, the business generated around 80% of its revenue from the region.The directors said market conditions in North America are "healthy and positive". And demand for new warehousing is driving part of the demand, "with customer workloads at high levels and reported project backlogs extending well into 2022".So it looks like Somero has high visibility for its earnings through 2022. And City analysts have pencilled in an uplift in excess of 70% for 2021 and expect a further high-single-digit gain this year.Meanwhile, measured against those expected earnings, the valuation looks undemanding. With the share price at 590p, the forward-looking earnings multiple for 2022 is running around 13. And the anticipated dividend yield is a healthy 5.7%.There's some volatility in the multi-year record of earnings and dividend payments. And the share price has been a bit wild over the past few years. But there's a steady record of annual growth in revenues. And the firm's strong balance sheet showing a net cash position encourages me.In fact, I became sufficiently enthused by the opportunity to add a few of the shares to my diversified portfolio recently. And I'm aiming to hold them for the long haul as the underlying growth story continues to unfold.
Posted at 28/12/2021 20:21 by mr. t
Eric, I appreciate the note of caution you give on share price growth and revenue - and your comparison to 2018/19. And of course there was an profit warning in 2019, that must have been unwelcome for many at the time.

You of course may be right with your comparison and expectations, but I have a more positive view for the following reasons.

1) Somero is on a roll. In their 21st Jan 2021 trading statement, Somero's outlook for 2021 was "modest revenue growth and EBITDA comparable to 2020". 2020 revenue was $88.6m and EBITDA $26.1m. In the 7th Dec 2021 trading statement (the fourth upgrade in the year), Somero now forecast $130m revenue and $45m EBITDA. That's increases of >45% and >70% respectively. They also mention "customer workloads at high levels and reported project backlogs extending well into 2022", which bodes well for 2022.

In comparison, although there were positive statements from Somero throughout 2018 they were not so exuberant there was not the same kind of upgrades or forecasts. In the end 2018 revnenue and EBITDA was 10% above 2017, and then in 2019 the figures fell.

It looks to me the company is in a very different position.

2) Commentators are way more positive on the market. As an example, Cushman & Wakefield predict 932 msf of new industrial floor space over the next two years (a marked increase on the 375.8 delivered in 2021):


I can't find data from 2018, but in 2019 they predicted 573.4 msf over the following two years:


In their view Somero's customers are building significantly more new space than they were two years ago.

3) Somero's customers are far more positive. Take Prologis, who are one of the global leaders in industrial real estate with almost 1bn square feet of space worth over $170bn. The opening statement from the CFO in their last earnings call was uber positive on results and future growth:


"Thanks, Tracy. Good morning everyone and thanks for joining our call today. Third quarter results exceeded expectations and were underpinned by record increases in market rents and valuations. Operating conditions are being shaped by structural forces that continue to drive demand. At the same time vacancies are at unprecedented lows. Space in our markets is effectively sold out. In the last 90 days supply chain dislocations have become even more pronounced, with customers acting with a sense of urgency to secure the space they need. As demand surges, having the right logistics real estate in the right locations has never been more mission critical to our customers.

During the third quarter, we signed 56 million square feet of leases and issued proposals on 84 million square feet. Spaces above 100,000 square feet are effectively fully leased. Our last touch segment continued to gain momentum with new lease signings growing by 44%. Ecommerce requirements continue to broaden across a range of industries, with this segment representing one quarter of new lease signings. The activity was down sequentially as anticipated, although remains above trend. Given the sharp ramp-up in demand, we are raising our 2021 US forecast for net absorption by 14% to a record 375 million square feet against deliveries of 285 million square feet, resulting in year-end vacancy reaching a new low of 4%. I want to point out that we revised our dataset here, this quarter to reflect only Prologis markets.

Strong demand is being met with historic low vacancy pre-leasing in the US, the Liberty pipeline has reached 70%, its highest level ever as customers continue to compete for space. Acute scarcity in our global markets is driving record rent and value growth. In the third quarter alone, rents grew 7.1% in our US markets, far exceeding our expectations. We are increasing our 2021 market rent forecast significantly to an all-time high of 19% for the US and 70% globally, both up approximately 700 basis points. Our in-place-to-market rent spread jumped 500 basis points in the quarter and is now approximately 22% with an upward bias. This current rent spread represents embedded organic NOI growth of more than $925 million or $1.25 per share. Record rent growth is translating to record valuation increases. Our logistics portfolio posted the largest quarterly increase in our history, rising 9.5% globally, bringing the year-to-date increased to an impressive 4% -- an impressive 24%, sorry about that. We expect that the ongoing network reconfiguration and expansion required to meet consumer needs and minimize disruptions will fuel demand tailwinds over the next decade.

Switching gears to results for the quarter. Core FFO was $1.04 per share, with net promote earnings of $0.01. Rent change on rollover was strong at 27.9%, slightly lower sequentially due to mix. Average occupancy was 96.6%, up 60 basis points sequentially and we reached 98% leased at quarter end. Cash same-store NOI growth accelerated to 6.7%, up 90 basis points sequentially. We had a very productive quarter on the deployment front. Margins on development stabilizations remained elevated, coming in at 47%. Our development starts were $1.4 billion, consisting of 31 projects across 21 markets, with estimated value creation of more than $520 million.

Turning to strategic capital, our team raised almost $500 million in the third quarter and $2.5 billion year-to-date. Equity cues for our open-ended vehicles were $3.4 billion at quarter end, another all-time high.

Moving to guidance for 2021. Our outlook has further improved and here are the key updates on our share basis. We are tightening and increasing our cash same-store NOI growth to now range between 5.75% and 6%. We're increasing the midpoint for strategic capital revenue, excluding promotes by $12.5 million and now range between $480 million and $485 million. We expect net promote income of $0.05 per share for the year, an increase of $0.03 from our prior guidance. In response to strong demand, we are increasing development starts by $450 million to a new midpoint of $3.7 billion. Our owned and managed land portfolio now supports 180 million square feet and more than $21 billion of future build-out potential, providing a clear runway for significant value creation over the next several years.

We're also increasing the midpoint for acquisitions by $500 million. The increased pace of acquisitions relates to our focus on covered land plays and urban last touch opportunities. We now expect net deployment uses of $650 million at the midpoint. Taking these assumptions into account, we are increasing our core FFO midpoint by $0.06 and narrowing the range to $4.11 to $4.13 per share. Core FFO excluding promotes will range between $4.06 and $4.08 per share, representing year-over-year growth at the midpoint of almost 14%, while deleveraging by more than 300 basis points. We expect to generate $1.4 billion in free cash flow after dividends with a very conservative payout ratio below 60% range.

While our year-to-date results have been extraordinary, most of the benefits from the current environment will accrue to the future. Our 22% in-place-to-market rent spread, the valuation impact on promotes, our leverage capacity, the $21 billion of development, build out, and most importantly the vast opportunity set that our global footprint provides, all pave the way for both significant and durable long-term growth.

As I mentioned at the outset of my remarks, the disruptions within the supply chain won't be solved overnight. Prologis plays a unique role in the industry and we're committed to helping find long-term solutions, that's why we're working closely with our customers, policymakers and community partners to help address the problems, which range from warehouse space to transport infrastructure to labor scarcity."

In comparison, the similar statement in the Q3 2018 earnings transcript is positive but to a far lesser extent:


4) Long term structural changes:

a) we hear more and more about a movement from "Just in time" to "Just in case". That means more warehouse space.

b) more ecommerce means more warehouse space (higher % of returns, plus all stock is in warehouses as there are no shops to hold them)

c) more automation in warehouses (robots, etc.) need higher quality flooring (Prologis refer to that in the Q3 2021 transcript), which plays to Somero's strengths.

5) Somero is launching new kit to new markets, opening new growth channels.

In short, there are risks in Somero but the story is as positive as it could be for me. More positive than it was in 2018.

Ramp over :)

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