Telit Communications Share Discussion Threads

[zipstuck] 08/3/2016 12:32

So how do you value TCM - 1x sales x110% ? for projected growth would be conservative if a suitor had admin and selling in place not to metion their own R & D

[zipstuck] 07/3/2016 21:37

I think the shorts now have a conundrum at these levels. They may continue to sell to keep the price down but at the risk of the company being bought for the future FCF. Seems a rock and a hard place for them right now. I have to say I was an anticipating less sales growth than the outlook, and, on reflection, if a line has indeed been drawn under the dev cost capitalisation then a near zero net debt in the results is not an issue. At least TCM is listening to the market.

[paleje] 07/3/2016 16:18

Cannacord today tgt 280p.

[eagle eye] 07/3/2016 16:06

2015 Final Results Conference call Presentation March16:

[bs76] 07/3/2016 11:45

Good result. Bit more short covering might happen

Euroclear Stock lending data shows that there must be massive increase in shorts since Oct 2015

Month end => stock loan => Total number of shares => % on loan

Feb-16 11,124,700 114,922,898 9.7%
Jan-16 9,162,494 114,922,898 8.0%
Dec-15 9,446,190 114,922,898 8.2%
Nov-15 7,329,145 114,922,898 6.4%
Oct-15 3,111,515 114,922,898 2.7%
Sep-15 3,097,735 114,922,898 2.7%
Aug-15 3,478,079 114,877,418 3.0%
Jul-15 3,968,343 114,877,418 3.5%
Jun-15 3,644,076 114,877,418 3.2%
May-15 3,185,054 114,877,418 2.8%

[owenski] 07/3/2016 09:20

Volume over 1M and its only 9.20, looks like a high volume day, suggests markets like the results, we'll see what the close is.

[brambuz80] 07/3/2016 09:16

The key to me is the future ability to increase FCF which translates into divis, buybacks, acquisitions to grow the business futher.The company confirms that this will now grow going forward.Eggs on the Berenberg "analyst" face...

[ch1ck] 07/3/2016 08:29

Congrats to all who saw the fall as a buy in point. The move today is confirmation that the company is strong and well run there is no reason the price can not double from here.

[muffster] 07/3/2016 08:25

Zip, agree. Great results but too much capitalization. He justifies that by sayings costs will decrease and Cash flow improve. Could be the turning point but paying high multiple now for the shares on capitalised profits

[staverly] 07/3/2016 08:15

3m cash tax payment lends a new credibility to the earnings quality hence initial share price reaction but grossly inefficient BS remains DYOR

[jon l] 07/3/2016 08:04

Agreed owenski. That is a bold statement for the ceo to make so clearly, it commits him to deliver real progress in margins and cashflow in the next 12 months and beyond. Presumably he put that in to counter the cautious forecast in last week's Berenberg note and to guide forecasts upwards. This has been a good time to buy, anywhere between 180-220 while the double bottom formed - the pressure of selling by those who sold TCM post-GBO has now subsided, and it could be buoyant from here.

[owenski] 07/3/2016 07:27

Couple of interesting statements:-

"After several years of making acquisitions and high R&D investment, we are now in a position to scale the business and benefit from our operational leverage, and as such, we will continue to reduce R&D, Sales and Marketing and G&A costs as a percentage of revenue.

"As these cost elements reduce as a percentage of revenue and we continue to scale, we also anticipate that the business will start to generate significant free cash flows.

Suggests a bit of an inflexion point has been reached. The strategy has been built now reap the rewards.

[zipstuck] 07/3/2016 07:27

Again cash generation is the issue - increased loans and capitalised profit.

[someuwin] 07/3/2016 07:24

7 March 2016

Telit Communications PLC

Preliminary results for the year ended 31 December 2015

Enhanced scale and investment programme drive Adjusted EBITDA up over 30%

Telit Communications PLC ("Telit", "the Group", AIM: TCM), a global enabler of the Internet of Things (IoT), has published its results for the year ended 31 December 2015.

Financial highlights*
-- Revenues up 13.4% to $333.5 million (2014: $294 million)

o IoT services revenues grew 30% to $26 million (2014: $20 million)
-- Gross margin increased to 39.9% (2014: 39.55%)

-- All operational expenses as percentage of revenues decreased: Gross R&D to 15.4% (2014: 16.6%), Sales and Marketing to 16.6% (2014: 17.1%) and General and Administrative to 8% (2014: 9%)

-- Adjusted EBITDA up 31% to $45.3 million (2014: $34.7 million); as a percentage of revenues, increased to 13.6% (2014: 11.8%)
-- EBIT increased 23.7% to $18.8 million (2014: $15.2 million)
-- Adjusted EBIT increased 23.9% to $30.6 million (2014: $24.7 million)
-- Adjusted profit before tax increased 18.3% to $27.7 million (2014: $23.4 million)
-- Adjusted basic earnings per share up 18% to 21.7 cents (2014: 18.4 cents)

Operational highlights
-- Jump in APAC revenues, up 74% to $70.9 million (2014: $40.8 million)
-- Continued investment in product line for automotive modules
-- Continued investment in Services division

o IoT Portal tool developed and launched

o deviceWISE for Factory, enterprise-grade industrial automation business unit, launched

* For reconciliation from IFRS financial results to adjusted financial results, see note 4.

Oozi Cats, Group Chief Executive, commented:

"As well as another year of double-digit growth, we have continued to invest in our IoT Services division, consisting of our connectivity and platform capabilities as well as our IoT Portal tool.

"After several years of making acquisitions and high R&D investment, we are now in a position to scale the business and benefit from our operational leverage, and as such, we will continue to reduce R&D, Sales and Marketing and G&A costs as a percentage of revenue.

"As these cost elements reduce as a percentage of revenue and we continue to scale, we also anticipate that the business will start to generate significant free cash flows.

"The combination of products and services needed to deliver IoT capabilities for global enterprises is now in place. Major corporates around the world are poised to exploit this new development in order to drive down their cost base, improve efficiencies and create new revenue streams.

"With our global reach and market leading position in modules as well as our connectivity, connectivity management and platform capabilities, we are well positioned to exploit these market developments. We are confident of maintaining our double-digit revenue growth in the current financial year."

[eagle eye] 04/3/2016 10:18

Ch1ck, Thanks for your post detailing the Berenberg downgrade.

[owenski] 03/3/2016 21:57

Always worth another look so as to get an overview of what Telit are doing and where they are going and the strategy behind the business.

When I met Oozi at last AGM, one of the things he said was that this M2M/IoT growth market is likely to last for a generation, to continue for our life time.

Telit's strategy is sound and worth understanding, a short term brokers note can be seen in a different context then. imo

[revoman] 03/3/2016 15:24

What was that price spike just then all about?

[seans66] 03/3/2016 14:14

Temporary blip.

Still very confident in the future of this company in a market that will be huge.

[bernieboy] 03/3/2016 08:12

Back in yesterday at 208. Bit higher than my original buy in price of 12.5p several years ago!

[ch1ck] 02/3/2016 22:40

Just to give a balanced view here is the down grade report. It does not seem to warrant the 12% fall we saw at the low today. Its based on if and buts but then so was the forecast. I doubt it will fall to 180 but if it does I would buy more.< Back to listTelit downgraded by BerenbergSource: SMWBerenberg has downgraded its recommendation on Telit Communications (LON:TCM) to hold from buy, stating that it is becoming less confident over the company's outlook for 2016.The broker said: "While we are confident that Telit will deliver its FY 2015E EBITDA guidance of USD40m-45m, we are less confident about the outlook for 2016."Specifically, we feel there could be further deliberation by end-customers as migration to 3G/4G continues to present challenges in the US market."Analysts have cut their price target to 250 pence per share from 380 pence.

[ch1ck] 02/3/2016 22:25

Report on Motley Fool on Glencore, HSBC AND TelitUnlike Glencore, Internet of Things (IoT) device maker Telit Communications has industry tailwinds at its back. The IoT market is expected be worth many billions of pounds in the coming years and Telit is well placed to take advantage of this trend. The company focuses on making the devices that connect everything from cars to refrigerators to the cloud. Shares have been dented recently due to downward revisions to 2015 growth, but full-year revenues still rose an impressive 13.4%.The company does remain a small player in the space and is vulnerable to giant competitors exploiting their economies of scale, but with such a massive growth market to exploit I believe it shouldn't lack for opportunities. Shares trade at a low 11 times earnings, which suggests to me that Telit has the best opportunity of these three shares to double in size in the coming years.

[reddave999] 02/3/2016 10:45

£1.80 and I might be tempted, heading that way :)

[pka3] 02/3/2016 09:16

Totally agree bulltradept.

[ch1ck] 02/3/2016 09:05

I have been waiting for a correction, this has been a great opportunity to buy in. Bought in at 205p and i cant see it being there at the end of the day.