Stm Share Discussion Threads

[t0pgrader] 02/9/2015 16:18

Good write up in the IC

[qs99] 01/9/2015 12:59

just looked at selling a few £k, and online quoting me over 52 to sell when spread would appear to be *(DYOR) 50-54 so IMO looking to get hold of your stock in a big way! let's see....

[qs99] 01/9/2015 12:48

great thanks, will be intrigued to see how he sees both STM and BHY as hold both....

[philw2009] 01/9/2015 12:31

In comments in IC...

"Dear readers

Please note that I am looking at the RNS announcements from Entu, STM, Amino Technologies, LMS Capital and Henry Boot. I will publish updates on all of these companies shortly.

Regards

Simon"

[luckymouse] 01/9/2015 12:07

9/1/2015 FinnCap Boost Price Target Corporate GBX 55 -> GBX 60

I calc FY1 63 FY2 82

[t0pgrader] 01/9/2015 12:06

are they as vulnerable to a change in HMRC policy as is suggested in the article?

Would appreciate anyone's thoughts

Thanks

[qs99] 01/9/2015 11:43

fair point re dividends, but they are due to being payments, possibly at year end IMO from reading this mornings statement....and given cash generation, IMO it should be a decent yield...let's see...be interesting to see if the IC picks this up doesn't simon Thomson usually comment? DYOR

[qs99] 01/9/2015 09:04

ahem...half year! Bodes very well IMO....

[loftus16] 01/9/2015 07:35

Excellent result for the half year.

Edited for error!

[qs99] 01/9/2015 07:32

wow (IMO) cracking set of results. c.£7m of net cash, increasing profits and divi to be introduced again pretty soon from what I read DYOR / IMO etc....surely this makes this worth over a quid?? IMO!

cheers

[qs99] 16/8/2015 10:39

Hopefully Friday's rise was a per-cursor to some decent Northwards movement ahead of results...let's see how this week pans out..

[qs99] 14/8/2015 14:07

Storming ahead nicely Imo ahead of results in a few weeks time....has it also been tipped does anyone know?

[webclick99] 30/7/2015 10:00

Anyone any idea about price collapse today? Doesn't appear to be trade volume related - very little activity. Some news somewhere?

[qs99] 10/7/2015 11:33

great momentum and thanks for posting IC write up

[philw2009] 09/7/2015 14:47

Exploiting a valuation anomaly

H&T was not the only share on my active buy list that has benefited from a target price upgrade. So too has STM (STM: 47p), the Aim-traded financial services company specialising in the administration of assets for international clients in relation to retirement, estate and succession planning and wealth structuring.

Having recommended buying the shares at 35p ('Tapping into a pensions payday', 27 April 2015), STM’s share price hit my initial target price of 47.5p, coinciding with a six-year high dating back to January 2009. I subsequently advised running your healthy profits but placed a conditional buy recommendation on a close above 48p to reflect the technical set up with a new target price of 60p, representing the pre-Lehman Brothers lows in the summer of 2008 (‘Smashing target prices’, 14 May 2015). That conditional buy advice was triggered and within a week of that article the shares had peaked out at 56p. This prompted some profit taking.

However, I note that analyst Duncan Hall at broking house finnCap has just raised his target price on the shares from 45p to 55p on the back of market developments and positive company specific newsflow. He has a point as the successful flotation of Aim-traded Bristol-based rival Curtis Banks (CBP: 229p) highlights the chronic undervaluation of STM. Indeed, Curtis Bank’s market value of £100m is 30 times its annual operating profit last financial year.

There is no reason at all to justify such a valuation anomaly with STM whose Qualifying Recognised Overseas Pension Schemes (QROPS) business, an offshore pension scheme approved by HMRC and used by expatriates and internationally mobile employees whose tax domicile can change as a consequence of employment, is highly profitable and a reliable source of income as I noted when I initiated coverage. Indeed, a 26 per cent operating profit margin from this business segment alone is highly supportive of an earnings multiple higher than 9 for fiscal 2016 given the double digit earnings growth STM is generating.

Migration boosting pension plan profits

Mr Hall also rightly points out that the market for such pension schemes keeps growing and for good reason too given that “migration and issues of domicile are becoming more topical throughout the EU as foreign-born population percentages rise.” For instance, the NHS reports that 26 per cent of doctors in the service have been trained overseas and that the General Medical Council sees around 4,000 applications a year for Certificates of Good Standing to allow UK registered doctors to seek work overseas. The UK government estimates 5.5m British born nationals now live overseas. So with a more mobile and affluent workforce to cater for, this can only illustrate the need for versatile savings products. Operating from centres in both Gibraltar and Malta, STM has been expanding the number of introducers with whom it works to sustain the robust sales momentum the business has been enjoying and to exploit further a captive market for long-term savings products.

I would also point out that STM has been acquitted in a court case that was pursued by The Attorney General for the States of Jersey against a former employee of the company, and STM Fiduciare as defendant. I flagged up this court case in my April article, and had expected such an outcome, but it is positive nonetheless.

In the circumstances, I feel that now is an opportune time to buy STM’s shares in advance of what is likely to be a bumper set of first half results in a few months time. Mr Hall at brokerage finnCap predicts that the company should grow current year pre-tax profits from £1.7m to £2.7m underpinned by a £1.8m increase in revenue to £17.7m. On this basis, expect EPS to almost double from 2p to 3.8p. But with pro-forma net cash of £4.7m on its balance sheet equivalent of 8p a share, the shares are only being priced on 10.5 times cash adjusted earnings, a bargain rating in my view. A price-to-book value of 1.3 times is hardly exacting either. To put this into some perspective, Curtis Banks is rated on closer to 8 times book value.

Moreover, the increase in recurring revenue from STM’s pension business means that a modest £900,000 forecast rise in revenue to £18.6m in 2016 is expected to boost pre-tax profit by a further £1m to £3.7m, albeit profits are being enhanced by the reduction in finance charges following the redemption of the convertible loan notes. I discussed this issue in detail when I initiated coverage in April. On this basis EPS estimates surge from 3.7p in 2015 to 5p in 2016, implying that STM’s shares are trading on only 9 times next year’s likely earnings, or 7.5 times on a cash-adjusted basis.

So no matter what way I look at it STM’s shares are far too lowly rated on a bid-offer spread of 44p to 47p. Strong buy.

[ragehammer] 09/7/2015 14:12

Simon Thompson in the IC has tipped STM as a "Strong Buy".

[philw2009] 09/7/2015 14:04

Great news!

[philw2009] 09/7/2015 14:04

8 July 2015


STM Group Plc
("STM" or "the Group")
STM Jersey Acquittal & JFSC Public Statement

STM Group Plc (AIM: STM), the multi-jurisdictional financial services group, provides the following update with respect to STM Fiduciaire, the Group's Jersey division.

As announced on the 29 June, STM Jersey and its former employee were found not guilty and acquitted of all criminal charges brought by the Attorney General in Jersey relating to a criminal investigation into its obligations to file one specific suspicious activity report. The investigation related to matters pertaining in 2011. The acquittal brings the criminal prosecution to a conclusion.

In 2012 a separate regulatory investigation was conducted by the Jersey Financial Services Commission into STM Jersey's systems and controls.

The Jersey Financial Services Commission ("JFSC"), has now released a statement, which was agreed between STM Fiduciaire Ltd and the JFSC in 2012 and was agreed between the parties would be issued upon a determination that no court case would be brought or the conclusion of any court case brought by the Attorney General against a former employee. STM understands the statement agreed between STM Fiduciaire Ltd and the JFSC relates to the conclusion of the regulatory investigation in 2012.

The JFSC's public statement recognises STM Ficuciaire's full cooperation in the investigation and highlights the 'robust action' taken by STM Fiduciaire to remediate its position. A number of shortcomings were identified during the investigation in relation to corporate governance and compliance, principally in relation to STM Jersey's handling of internal suspicious activity reports. The JFSC's public statement sets out the shortcomings together with the jointly agreed remediation programme.

STM took a number of positive steps at the time of the investigation in 2012 and subsequently to strengthen management and compliance within the business. STM also put in place a jointly agreed remediation programme, which has now been successfully completed, to rectify the issues identified in the investigation at that time. STM Fiduciaire and the JFSC as the Regulator have an open and constructive ongoing relationship.

[qs99] 29/6/2015 07:11

good to see this uncertainty now gone...

[qs99] 13/6/2015 08:59

some big old volumes last week...when is next update due anyone?

[qs99] 06/6/2015 16:23

looking forward to next update, that hopefully will then drive next step up...IMO

[sharesoc] 02/6/2015 12:08

We are holding one of our popular Investor Masterclasses in Manchester so local investors and shareholders in STM may be interested in attending as STM is based nearby our venue...

[qs99] 20/5/2015 20:23

yup not surprised profit taking....moved up slightly at end....fundamentals imo are still the same....holding on!