Spirent Communications Share Discussion Threads

[disc0dave46] 05/10/2023 11:43

Seems priced about right at the moment. Roland Head in his Stocko report reckons an adjusted eps of about 8 cents (based on 20% revenue drop, H1 margins and adj op costs of $300m).If eps for the year is 8c (6.6p), PE of 14x (which is generous given PW's come in 3's) that's 92p.Hopefully for holders there will be a recovery but for me I'll wait for their finals to see how it pans out.

[hamhamham1] 05/10/2023 08:17

Nice start, like I said, give it 2 or 3 yrs and over 2 quid again.

[essentialinvestor] 04/10/2023 21:51

They..successfully concluded..their buy back programme, eh.

A rather strange definition of success.

[pugugly] 04/10/2023 12:25

China dependence for all companies with a significant part of their revenue now possibly a killer in view of a deterioration in the global political environment. Not surprised at the fall this morning

" A strong pick up in orders from China was expected and this did not materialise as the Chinese Government reduced its spending plans and the general economic landscape there deteriorated. The China market represents a large proportion of revenue which we are now not expecting to receive in this financial year."

Risk of Spirent becoming a politically deflated football?

[kiwihope] 04/10/2023 12:11

I am usually not keen on share buybacks, but in this case the share price was relatively low when undertaken. I bought in at a higher price than most of the buybacks, so providing the company has 'spare' cash and is not funding it by borrowing, I don't mind the BOD buying shares at a lower price than I did. Obviously now would have been a better time but I didn't see this tumble coming and I doubt if the BOD did either. Very easy to say in hindsight.

Bottom line is if you think the company is sound (with low debt which has been my No.1 criteria even before higher interest rates) with good prospects over the next 5 years or so, then it seems a no brainer to me to buy. If you are a trader only looking in terms of months then much more risky. But that's why I'm not a trader...

[1knocker] 04/10/2023 11:18

Buybacks are the best way yet devised for burning corporate cash! That should be no surprise. Company directors are employed to manage businesses, not to dabble as amateur players on the stock market.

No point in crying over my Spirent shares now. At least the balance sheet is strong, though not so strong as it could have been if the BOD had stuck to the knitting and stayed away from buybacks. The takeaway for me is that it is time to go through the rest of my portfolio and cull those with weak balance sheets BEFORE nemesis strikes.

We have been through a decade and a half of near zero (better than free after inflation) interest rates previously unknown in financial history. That has played hell with capital allocation and sound business management. Those days are over. A lot of companies (and their shareholders) are going to find out the hard way that leverage works in both directions, and can destroy as well as enhance profitability. They are also going to find out the hard way that those happy to lend an umbrella when the sun was shining are nowhere to be found when it starts raining.

[74tom] 04/10/2023 10:58

I was tempted here but have exited for a quick profit after some consideration of the below sentence;

"The impact of negative operating leverage will very materially affect operating profit in this financial year."

Got to wait and see what the financials look like / how long this storm will last IMO.

Agree with those commenting on the buyback / capital allocation decisions. Nuts to have blown £56m via buybacks at double the current share price.

[patsyluck] 04/10/2023 10:52

It´s mind blowing that management proceeded with buying back shares as recently as 24 august last (900k worth at 1.53).You gotta wonder about the capital allocation skills of the board.....could nobody call a pause given it was clear that sales forecast had to be drastically reduced. Frankly just p*ss*ng away shareholders funds.

[hamhamham1] 04/10/2023 10:34

Cinoib, well I'm happy to buy at these levels, they got low debt and last year pre-tax income was £114m.
If you think buying shares is throwing money away. Best you keep it in the bank for a generous 4% return.

[1knocker] 04/10/2023 10:30

I seem to wake up to something like this every morning at present.
XP power dropped through the floor on a similar warning, though Spirent is less of a worry as its balance sheet is much stronger.
I don't see any reason to jump in for more yet though, as it looks as though it will be a while before the tide turns.

[kiwihope] 04/10/2023 10:09

I have never been able to get timing right, so now don't bother trying. If I see something that I like at a good price I buy it. Already had some of these, so my timing obviously wrong, not the decision to buy as I thought they were fairly priced then. Even better now...

[cinoib] 04/10/2023 09:56

Haven't been here for some time but on my watch list as it has been very good to me over the years. Been in and out since 98 I think. The way this market is just now, anything not meeting it's target gets hammered so best to sit on the sidelines and wait for clarity as is to easy to loose a fortune. Am sure there will be a time when things start to pick up and we can all get back to making a quid or two here and there, but this market is a disaster area a the moment and I for 1 don't have the cash to throw away or sit on in hope of it getting better in years too come

[kiwihope] 04/10/2023 09:29

Bought some. Low debt and hopefully just a short term (1-2 years) lull in sales...

[hamhamham1] 04/10/2023 09:16

200p in 2 or 3 yrs. (IMO)

[hamhamham1] 04/10/2023 09:15

Bought in today at 88-89p.

[games] 04/10/2023 08:54

IOBNT Internet of bio nano things

Not that you would want this, it all needed verification testing

Cambridge university link

[tim1478] 04/10/2023 08:37

The post of mammyoko (28 Sept) was prophetic

Getting into buy territory although there might be worse to come

Naked trader bought at 137 but warned of a falling knife and out in a tight stop

[salpara111] 04/10/2023 08:36

Had been watching after the last fall but like many I was waiting to see it turn the corner, pretty brutal sell off but the market is in an unforgiving mode at present.
Decent business in there but looks like it will take a while to recover.

[dogwalker] 04/10/2023 08:34

A takeover bid now much more likely, rather than less likely?

[scepticalinvestor] 04/10/2023 08:28

Glad i waited before buying in - quality company but might wait for the interims now

[chard1980] 04/10/2023 08:19

Well that'll be me locked in for the foreseeable, let's hope they can continue the dividend which at the current rate is now attractive.

[scepticalinvestor] 04/10/2023 07:37

Condolences shareholders

[willie99] 04/10/2023 07:15

Not the update we needed. I can see this dropping below £1 in current market. Tin hats required.