Stanley Gibbons Share Discussion Threads

[cockneyrebel] 28/2/2004 11:45

I think with many companies where the suggestion is that you work the PE after stripping out the assets or cash isn't always an hones picture as you're vever going to get to that cash and assets in many cases.

But here you have a business which is going to hand back the cash/assets to the share holders one way or another and it looks like something around 13p out of the 17p will come our way.

The sort of growth these are displaying should be on a PE around 20 in reality. Not only have they had consistent strong growth for several year but we are still looking a forecast growth of 50% that looks easily achievable. The forecast PEG if the stock was on a PE of 20 is 0.4 - stonkingly low, the actual PEG on the current PE rating is around 0.2 if you strip out the cash - a PEG of 1 is considered low, Slater reckoned a PEG of 0.75 was a buy and anything below is very exciting.

Good info Gateside and Nurdin - fun to come as the punters wake up. :-)

CR

[the pie] 28/2/2004 11:15

At the moment SGI is as good a share to be in as any others I can think of - I think we all agree that there is little or no downside from here!

Thanks to the contributors of this board for their knowledgeable postings and I hope we all enjoy much more success with this share.

[daza75] 28/2/2004 10:58

All great reading today, as i said on the Farj3 thread, ive put everything back into these. Roll on next week.

Good luck all!!

[jwe] 28/2/2004 09:54

Large write up in todays telegraph especially for such a small company,positive but nothing new and should bring some added interest early next week.

[nurdin] 28/2/2004 08:11

Thanks gateside...I still think they offer ''blindingly obvious value'' not only based on earnings growth and the forward PE,but also on their asset base.Their current stock holdings,thats stamps,autographs and other memorabilia,are worth £18m according to the ceo..thats equivalent to 72p a share.Add to that the cash and investments worth around 18p and we have 90p worth of assets,not to mention their free hold property in a prime London location.
Then we have the brand name..if ebay for instance wanted to buy them out they would have to pay atleast £20m for the name alone...(again according to ceo view on the names worth).So all in all a buyer would have to pay atleast 170p a share just to acquire the assets!

[gateside] 28/2/2004 07:54

From The Motley Fool


Picking Shares That Triple

By Maynard Paton (TMFMayn)
February 27, 2004


The stock market's revival has seen growth shares return to favour. Of course, the bear market showed that firms with great earnings potential should always be treated with some caution. No business can expand in top gear forever and investors often risk over-paying for prospective growth. But if there are clear profit growth possibilities and the valuation downside is minimised, the rewards can be substantial.

Stanley Gibbons (LSE: SGI), the famous stamp dealer, provides a good example of what to look for in a growth company. Its shares were highlighted in July last year at 26.75p. Today they're trading at 78p -- they've almost tripled.

Eight months ago, brokers were expecting Stanley Gibbons to increase its earnings by 70% in both 2003 and 2004 -- rosy by anybody's standards. However, supporting the projections were upbeat boardroom comments and a booming stamp market. At the time, the prospective price to earnings (P/E) ratio was low (just 8) and importantly, the shares were also backed by the balance sheet. Net tangible assets then amounted to 26p per share, which included a net cash balance, to give an attractive price to book of 1. The share price thus left the Stanley Gibbons brand and reputation -- probably the most famous in philately -- essentially in for free.

Today's annual figures from Stanley Gibbons go a long way to explain the share price leap. Earnings were up an astounding 84% in 2003, aided somewhat by stamp prices improving 15%. Positive talk concerning foreign collectors, new catalogues and Internet dealing support the prospect of another sizeable profit increase for 2004

Though Stanley Gibbon shares no longer offer the blindingly obvious value they once did, there's still plenty of scope for further momentum. Strip out the 17.5p per share of net cash and investments, and the P/E for 2004 comes to just 10. For what appears to be a fledgling growth stock at the dawn of a new bull run, that rating still looks too cheap.

[nurdin] 28/2/2004 07:23

From the Times today :

Stamps frenzy boosts Stanley Gibbons
By Our Business Staff



Stanley Gibbons, the stamps company, has reported record profits and forecast that growing demand for alternative investments and economic booms in China and India would drive further growth.



The company's pre-tax profits more than doubled to £1.22 million last year as the value of stamps, as measured by the Stanley Gibbons SG 100 index, rose by 15 per cent. The value of British stamps increased by 20 per cent.

The growth was credited to increasing interest in alternative investments after the three-year bear market in shares knocked faith in equities. The company has opened an investment department to advise on stamp portfolios.

Paul Fraser, the Stanley Gibbons chairman, added: "Recognition of the rarity value and scarcity of supply is giving both liquidity and momentum to the international markets."

The company's internet operations, which achieved a 25 per cent rise in direct sales, were allowing the London-based company to exploit growing personal wealth worldwide.

"As more collectors and investors have more disposable income, particularly in China and India, we should see further increases in stamp values and an especial appreciation for the portability and value by weight of the stamps themselves," Mr Fraser said.

He added that trading had been firm so far this year with profits and turnover ahead of the same period in 2003.

"I am becoming increasingly excited about the future of Stanley Gibbons," he said.

The company is in June to confirm the proportion of cash raised from last year's flotation of Provide Commerce which will be returned to shareholders.

Stanley Gibbons shares stood 6.5p higher at 74.5p in afternoon trade.

[cockneyrebel] 27/2/2004 18:16

Well done - but if VCP post a trading statement what do you buy back at? 420p minimum. And if you've done alright out of VCP you've lost on MBY so where has it got you?

Not worth it imo, unless you're psychic.

CR

[barnetpeter] 27/2/2004 17:53

MAM say:

"Stanley Gibbons rose 73% to 73p after it said today full year pretax profits rose to £1.23m from £540,000 a year earlier, and said current trading is ahead of last year".

73%! Not quite but just perhaps.....

Good day for you CR, with HRN rallying. VCP beginning to look interesting again (I sold at just below £4)

[cockneyrebel] 27/2/2004 17:04

Yep, nice day, price just 0.5p short of the day's high, more to come next week - enjoy.

CR

[nurdin] 27/2/2004 16:06

There should be some good press tomorrow too!
Another thing to notice is that at half time they had cash of £1.048m...full year £1.85m..a jump of over 800k is six months.Thats equivalent to 3.2p a share. That compares to eps of 2.2p in the same period! Shows its converting profits into hard cash at a rate of knots...

[cockneyrebel] 27/2/2004 15:52

Well I've topped up twice today Lemming - still seem very cheap to me.

CR

[kael] 27/2/2004 14:47

Is the pope catholic? Buy on the dips.

[clocktower] 27/2/2004 13:36

I for one would be very happy with that CR.

[cockneyrebel] 27/2/2004 12:46

Cheers nurdin - 'one pound' written all over these imo.

CR

[daza75] 27/2/2004 12:41

hi guys. im back in today. Regretting selling at 58p but the results were fantastic. Target 90p.

[jwe] 27/2/2004 12:34

Excellent post thank you nurdin.

[kael] 27/2/2004 12:34

How many indications do people need to buy(!!)??

You may not get instant gains but you certainly wont miss the speedy rises which will inevitably happen. As I said before anything under £1.00 is cheap!

[nurdin] 27/2/2004 12:31

Thanks CR..interesting.I have just finished my chat with the CEO..30min! Here are some snippets:

-they hold 221m shares in PRVD
-a special divi will be paid after they sell the shares post the lock in period in june
-they intend to return the existing cash to shareholders in form of divi or share buy back.The company is watching the share price and he thought paying anything upto 80p ''would be a bargain''!
-Nov and Dec were the best trading months in their history
-this has continued in the last two months.Normally they break even in the first quarter but ''we are already into profit which bodes well..''
-all assets including stocks are at book value and they dont apply 'current worth' valations when reporing assets.Their current stocks are worth £18m...yes £18m!!
-the brand name 'Stanley Gibbons'' is alone worth more than the companys current market cap
-brokers have upped eps forecasts to 5.7p...but he admitted its on very cautious side.When I bounced my 8p forecasts based on the argument above,he commented its entirely possible.'We like to surprise on the up..'

Thats all I can remember ......

[kael] 27/2/2004 12:27

Look at those trades...buy i tell you!

[cockneyrebel] 27/2/2004 11:57

Good article on Citywire - I don't think you need to subscribe to read it.

Highlights:

"Citywire highlighted the shares in June last year and a handful of shrewd investors who were enjoying the much improved outlook. They include two former top fund managers Leonard Licht and William Littlewood who are known for their stock picking abilities"

"We recommended the shares on the basis of its strong cash flows, potential for recovery and growth, a low price earnings ratio and strong net assets which have since risen in value from 26p to 30p."


"Things are going well for the company and the rise in the shares reflects this. No harm in taking some profit from our original tip but otherwise a hold."

Worth reading the whole article - got myself more :-)

CR

[clocktower] 27/2/2004 11:26

At least you can trust the directors here..Give it a few days it should go higher.

[ukhawk] 27/2/2004 11:23

Bingo, thanks, and good luck here. Looks like a winner.