Stm Share Discussion Threads

[rcturner2] 28/11/2019 09:09

If you compare the interim results to the full year figures predicted in the trading update you will see that H2 has totally fallen off a cliff. Now that may be a one off or it may be the case that there are serious issues here.

This share is not risk free at all. I can see this down by 50% from here easily.

[smithie6] 27/11/2019 16:50

a cynic, like me, might expect the dirs. to be given some share options before they issue any re-assuring news !

such as a notice of share buy backs or that will maintain the divi or...

[smithie6] 27/11/2019 16:47

well, the co. is controlled by a limited number of big hldrs

incl. the MD

so, imo they'll be keen to get the share price up

( or make an offer themselves !
but they'd need to make Miton happy, ~17% of the shares...& other big hldrs, I cant see them letting it go on the cheap after holding for X yrs
& Miton paid around this price to get their big stake
so surely they'll see this share price as cheap)

[actofwill] 27/11/2019 16:43

A take private or some buybacks would make sense. It's trading < 1x recurring revenue now. Recurring meaning 15 year+ duration.

[smithie6] 27/11/2019 16:37

SJ

would a merger of OCT & STM make sense ?
(save various mngmnt costs etc etc.
cross selling ??)

or
any other cos. out there that might want to buy STM ?

[smithie6] 27/11/2019 14:59

lse says that you can sell at 27p

ie. creeping upwards since ~ 2 hours ago when it was 25p

----

UPDATE
on advfn...
last trades at 29p & 29.4p
so moved up 3.-3.4p since the low

buys streaming in for last 1-1.5 hours

----

a little RNS saying that any dir. had bt some shares
would be nice !!

[sailing john] 27/11/2019 14:33

OCT is in Financial Services yes but not Pensions

The big difference is that circa 75% of STM revenues are recurring - so low risk on the income side with some recent risks on the cost side.
OCT on the other hand has greater income risk but most of the costs are fixed although currently they are expending on business growth that has been slow.
I hold both!
SJ

[gary1966] 27/11/2019 14:33

I hold OCT and they are in nothing like STM's business. Custodian services and hopefully bonds at some time. Good company though with cash making up most of the market cap, generous dividend and strong cash generation.

[rcturner2] 27/11/2019 14:25

OCT is a good example, similar industry.

[gary1966] 27/11/2019 14:24

There valued at less than cash value presently, I can only dream of them being valued at 4-5 times their PBT.

[sailing john] 27/11/2019 14:22

"RCTurner227 Nov '19 - 14:16 - 761 of 761
I have seen companies in this situation valued at 4 or 5 times their PBT"

Which ones?
It would be good to check them out to see why
SJ

[rcturner2] 27/11/2019 14:16

I have seen companies in this situation valued at 4 or 5 times their PBT, so the current market cap could easily go down from here.

You are the smart guys holding these shares, not me.

[smithie6] 27/11/2019 13:50

"As a result of the above, the Board now expects 2019 Revenue to be approximately GBP23.0m, reported PBT is expected to be approximately GBP3.8m, with Underlying PBT* of approximately GBP2.5m"

after tax (if ~20%) that is about 2M underlying PAT

for a cap. value below 20M
(giving an underlying return of >10% while banks give you just 0-1 % !!)

with
-a big list of clients ('sticky' clients)
- on going turnover
- international offices
- big range of products

I'd buy the co. for this price !!

(sure they have got some stuff to fix
but !
with a sticky client list
its not like they are bidding for construction contracts every week

I think that the co. will get past those one offs...but yes, it will take some work & time)

[sailing john] 27/11/2019 13:39

Simon T has created an opportunity as his readers rush for the door and drive the price down further after the initial fall. It always happens in a thinly traded share that he tips in either direction and creates a spike up or down.

I have also added further at below 27p

GL - SJ

[gary1966] 27/11/2019 13:30

RCTurner2,

If the discussion you are referring to is the one about the fact that the cash is regulatory capital then that was dismissed previously as well. If the trading activity ceased then the cash would be released from being regulatory capital to distributable. If the trading business was sold then the cash would also be released. What is a business that is producing £2.5m of profits worth? Rest assured the cash is very real and is worth every penny to shareholders in a wind up or sale situation.

[smithie6] 27/11/2019 13:22

who rules ?

Smithie6 or Simon T. ?

I've been buying.
26-27p to buy looks insane to me.

unless the co. produces more bad RNSs in coming months
but
otherwise the cap. value of the co. is too low imo & should surely attract a buyer

[smithie6] 27/11/2019 13:14

ST says anything useful/interesting ?

[penpont] 27/11/2019 12:16

Simon Thompson has just recommended a sell in the IC.

[rcturner2] 27/11/2019 09:45

The cash figure is misleading as discussed above.

EPS will fall and the dividend will probably be cut.

[sailing john] 27/11/2019 08:28

Agreed Gary
Managed to add a few 5k blocks at 32p and under.
Disappointing but a long term hold so taken the opportunity to add a few
GL - SJ

[gary1966] 27/11/2019 08:22

Market cap pretty much now at net cash level and so business and future profits in for free, not sure this markdown is warranted.

[impvesta] 27/11/2019 08:08

Yes, this one certainly hasn't lived up to my hopes and expectations. I've bailed out this morning for an unhealthy loss! Good luck to remaining holders.

[rcturner2] 27/11/2019 07:59

This will nose dive today.

[rcturner2] 11/9/2019 13:43

ok, I accept describing it as client money wasnt the best use of language, as you say it is regulatory capital which is required by STM to operate. However anyone who thinks it is "just cash" is misleading themselves and hence why the shares appear so cheap.

[sailing john] 11/9/2019 13:35

RCTurner
Regulatory cash is an asset in the same way that land and a factory is for other businesses. Yes it can't be used to buy another business or for operations but if another party wants to buy STM they would value the cash asset at it's cash value since that is what they would have to put aside to gain customers and their investments by whatever means acquired.

So in summary - at first you thought
"The net cash is misleading as it is client money."

Now it is
"except you cant take away the cash they hold"

But we are discussing valuations not use of cash in the business or to acquire another one and a significant cash asset is part of that valuation!

SJ