Stanley Gibbons Share Discussion Threads

[xdavid] 25/4/2004 21:49

I was interested to see what the 'effective' EPS was taking into consideration the PRVD return. This assumes that the PRVD monies is returned by a share buyback and so the EPS goes up. (In theory, the same effect would be obtained if shareholders spent any dividend on buying a larger proportion of the company themselves). Not that I think it will be spent on a share buyback, it would buy a lot of shares - 2.6M today!!

Presuming a conservative net return of £2M from PRVD and current total shares in issue of 24M. A share buyback at todays 75p would reduce this to 21.3M shares.

On this basis the 2004 EPS increases from 5.3p to 6p.
The 2004 PE reduces from 14.1 to 12.5
The 2005 PE reduces from 10.6 to 9.6

Essentially, it's worth a 12% gain on the share price. Nice.

[nurdin] 25/4/2004 16:21

Hector..you just need to look at their eps growth rate over the last four-five years to decide if they represent good value or not.Heres their track record and forecasts for 04 and 05:
year eps(p)
00 -0.6
01 -0.24
02 1.94
03 3.49
04 5.3 (est)
05 7.0 (est)

Impressive indeed!On 05 estimates of 7p SGI are trading on a pe of under 11 with eps forecast to grow by 50% this year and a further 32% in 05.Thats a PEG of under 0.3!This of course excludes the likely 10p a share special dividend should they sell their PRVD stake at around $24...
The overall stamp market is worth an estimated £9bn globally and SGI have hardly scratched the surface.The momentum is behind them however and Id be very surprised if they dont exceed market expectations both this and the next year.Also bear in mind that advertising revenues from their internet sites are building up rapidly and should contribute handsomely to profits in the coming years..

[kael] 25/4/2004 15:05

next important bit of news is PRVD's results - May 4th was it? SGI are locked in until mid June I think

[rivaldo] 25/4/2004 12:45

Certainly not too late Hectorp - the divi isn't finalised yet, as SGI are locked in to their PVRD shareholding for a short while until they can sell as many as they need or wish to.

[hectorp] 25/4/2004 12:02

Is it too late to buy this share for the June special 'dividend'? I notive they don't normally ussie a divi.
H.

[daza75] 25/4/2004 11:09

I think tomorrow is an important day graphically! We are right on the 50 day moving average and if this holds and bounces from it, i will be a happy man.

[smow1] 24/4/2004 13:36

Says it all doesn't it - we are heading for a sub 10 P/E with massive growth and 15% more share buy backs. All of which means the EPS will leap forwards and the share price should follow. Also we have the large 10p+ dividend in June from the sale of PRVD in the US. Recent share price weakness is a great top-up oppertunity before the next leg-up up.

Look at all those non profitable techs on P/E's of 40+ and then look at SGI with profits pouring in, massive growth, share buy backs, large dividend and a P/E below 10. Know which I prefer to hold.

[barnetpeter] 24/4/2004 12:31

Has this been posted? From IC yesterday. Sorry if it has:

23 April 2004

STANLEY GIBBONS (SGI)

Stanley Gibbons held its AGM on 15 April, announcing simultaneously that sales for the first quarter of 2004 are 20 per cent ahead of where they were last year. Retail and general stamp trading activities are both performing well, while strong advertising revenues, combined with an improved return from direct marketing activities, are helping counteract the negative effects of late catalogue deliveries in the publishing and accessories division.

That all bodes well for the interim results, due out on 30 July, and the shares rose 5p to 74p on the news. We last recommended buying Stanley Gibbons shares at 79p (5 March 2004) after another strong set of results. Since then, the company has been buying back shares for cancellation, and a vote at the AGM allows for another 15 per cent to be bought in.

On broker Seymour Pierce's estimate of 6.9p earnings for 2005, Stanley Gibbons trades on a PE ratio of just under 11, at which level, and given the company's strong track record, the shares remain a buy.

[smow1] 24/4/2004 11:58

Isis - directors have not sold any of their share holding, they have simply exercised their share options and bought them out of the market using the share buy backs. The options are bonus payments for the amazing ongoing growth and recovery that they have achived in the company over the past two years.

Now they could have taken up the options but that would have simply meant more shares in the company, a lower EPS and less dividend for the holders, hence diluting share holder value. Instead they have used the masses of spare cash SGI are generating to buy the shares out of the market, so the share holders are much better off, EPS will rise and our special dividend in June from the sale of PRVD on the Nasdaq will be larger.

SGI only have 2% of the current stamp market but have a world renown brand name. Now they recognise this, have ditched the old web site and our starting to trade on that name and make inroads into the market. The far east markets are opening up and buying stamps at an accelerated rate, and they recognise the name Stanley Gibbons and buy from them. Hence there is an amazing oppertunity here for the company to move from 2% to 10%+ in the next year. Which is what makes this share so cheap at the current price.

That's why we have massive growth and the current P/E will drop to sub 10 in the next 12 months if things continue as they are. All in all the management have put in a great performance over the past 2 years to turn this company around and will continue to do so as stamps become a popular collectors items around the world.

Funds recognise the potential of a large world renown brandname that only has 2% of a rapidly expanding market and are quick to try and get on board as things start to move forward.

I for one am happy to lock up large sums in this company and expect great things over the next 12 months. I am very happy that the options have been bought out by the buy backs and haven't diluted my share value, and that funds are now getting on board.

The share mag and other newspaper write-ups said it all recently - this is a rapidly growing company with a massive market to address, top notch management and a very low P/E for such high growth. Very strong buy at these levels.

[xdavid] 24/4/2004 00:21

I wouldn't bother with it, Kael. Isis will just have to learn not to short a company who have just put in an 87% growth year with 50% more predicted for this one. Even if the current PE stayed at 14, that's still a 50% increase in share price.
He's going to have to learn to look at the fundamentals and not the 'smoke signals' before shorting.

[kael] 24/4/2004 00:12

Isis, what about the options granted at 70p? Do you think that's calling the bottom, or the top? You still have not explained why institutions would want to own 20% of the company at 70p, do you think they are calling the top, or the bottom?

Try thinking about that.

[isis] 23/4/2004 23:14

Well i hope for your sakes that their sales were premature.
good luck............

[xdavid] 23/4/2004 23:05

So you looked at the chart, saw the big rise, the high RSI, the break of the 50 day MA (down) and thought, "ooh, I'll have some of that!".
Best of luck...

[isis] 23/4/2004 23:00

xdavid - i'm just pointing out that Directors are calling the top not me.

[xdavid] 23/4/2004 22:59

So, tell us Isis, how much have you shorted SGI by? Anyone who spends this amount of time doing research to try and talk down a share must be really worried...

[isis] 23/4/2004 22:57

No - that is the original grant of options & he cashed them in just days after they became exercisable - in other words he does'nt share your enthusiasm for another rise.

[xdavid] 23/4/2004 22:53

Now you're repeating yourself...

[isis] 23/4/2004 22:51

I see Michael Hall did'nt hang around for the price to double from here to cash in his options - remember this bloke was the Finace Director & he's sold the lot ASAP:-

On 26 March 2002, Michael Hall, Finance Director of the Company, was granted an
option over 392,156 ordinary shares of 1 pence in the Company ('Ordinary
Shares'), for nil consideration, under an Enterprise Management Incentive Option
Agreement. The options are exercisable at a price of 12.75 pence per Ordinary
Share between 26 March 2004 and 25 March 2012, subject to the satisfaction of a
performance condition.

[xdavid] 23/4/2004 22:46

Isis, you want to stop filling up the thread with stoopid questions? Where do you think the growth is coming from...?

[isis] 23/4/2004 22:44

Also if SGI are such a large player of a £5billion market how come their turnover is less than £9m?

[xdavid] 23/4/2004 22:42

Fine. Don't buy.

[isis] 23/4/2004 22:41

A CEO who holds only 20k is not a serious vote of confidence in my book.

[xdavid] 23/4/2004 22:39

Any investor, with 790,000 shares, is ONLY able to sell into a growing stock. Otherwise he would not be able to find a buyer. That is the one 'problem' with small cap, illiquid companies which normally puts off big investors and institutions. They can never buy enough to be worth their while and they can never find a buyer when they want to sell.

That is why all the recent "director selling" is actually positive. We now have a number of serious institutional companies on board who have recognised that SGI have put down consistent growth and have the business plan to maintain it. Otherwise they wouldn't have touched it with a barge pole. This is a serious vote of confidence.

[isis] 23/4/2004 22:37

The CEO holds 20k - a paltry amount for a CEO!! he cashed in all his options & did'nt take up one single share - what price the options - surely he made enough to keep some?
Any of these deals do not sound like a share that's about to double & even the Institutions only use punters money not their own.

[kael] 23/4/2004 22:33

Isis read again, they excersised their options. CEO still holds the same he did before and the only real activity worthy of noting is the distribution of the chairmans shares to institutions.