Titon Share Discussion Threads

[rainmaker] 20/5/2014 13:19

HI WD, no probs. I believe it is possible to transfer to another ISA provider but I understand the positions need to be liquidated first so there's an expense.Obviously it's essential that all Investors take professional advice before making any changes.

regards

[wad collector] 20/5/2014 12:47

Thanks for that. I guess many of us have funds largely tied into self select ISAs so that is not an option. I tend to just leave a limit trade and hope that the spread narrows on a bit of volume. The MMs screw the market on these sort of small companies.

[rainmaker] 18/5/2014 12:10

No problem, Martin. It doesn't help matters when the LSE DMA Borker list is incomplete.Obviously you want DMA for cash settlement as some Brokers such as IG Index just offer this service for CFDs.

regards

[shanklin] 18/5/2014 07:40

Thank you RM

[rainmaker] 17/5/2014 14:43

Hi Martin-Direct Market Access(DMA) could well be the solution to your problem since Titon Holdings are on SETSqx.So theoretically in such situations,you can buy at 62p or 63p rather than having to pay 66p or even 67p although this will obviously be dependant on someone being the other side of the trade.You should be able to participate in the four daily auctions. Ostentatiously, Market Makers are there to provide continuous liquidity particularly in thinly traded smaller stocks but in reality they're there to primarily rip off the private investor. The problem you're going to have is finding a suitable Broker prepared to accept your business.The professional elective status that some Brokers demand to take you on as a client for DMA is way beyond the means of the vast majority of private investors eg a background of at least 2 years employed in a similiar trading environment or investable funds of E500k or more.However there is a Broker called Guardian that may be able to help and you should ring them on [phone] and have a chat. I've never personally dealt with them but a friend spoke to them and found them both very helpful and very knowledgeable-nothing ventured, nothing gained, as they say.I've put some useful links below-









Good Luck

regards

[shanklin] 16/5/2014 16:06

...2.5k at 66p was the most I could get.

[shanklin] 16/5/2014 15:51

ROFL. TON down 6p and it is impossible to buy 5k at 66p.

[mr. t] 08/5/2014 09:38

I agree Elite that it is becoming clearer that a good chunk of the Korean profits don't belong to Titan - I was expecting a higher EPS than 2.39.

On the plus side revenue growth is increasing (17% at last trading statement and 20% now) and the UK business is picking up.

It's also worth remembering that in H1 last year there was a one off gain of £225k due to the nuaire settlement which flattered EPS by maybe 1.7p. Strip that out to get a feeling for the on-going operations and you have a turnaround in EPS from a 1.1p loss to a 2.3p profit - a net increase of 3.4p for the six month period.

On balance, I agree that it's quite likely that some momentum may go out of Titon's share price but I still think the underlying business is performing well and undervalued.

[eezymunny] 08/5/2014 09:30

I totally agree with you about the P/E ratio, at first glance, being unexciting...but if you adjust out the cash balance is comes down to about 11 and things are, at least for now, on a nice upward trend. With all the other assets, good cash flow, divi etc, it looks a fair bit too cheap. As ever Mr Market will decide if he agrees!

[el1te] 08/5/2014 09:16

I don't doubt that at all Eezy - I still think that Titon is an excellent stock, but I reckon the market will be slow to pick it up simply because so many people look at the PER as one of the first ports of call. If they can get their UK business more fully back on track, then no doubt this valuation will look good, but that could take a while. In the meantime I'm trying to streamline my portfolio so it made sense to bank the small profit for now (for me).

I wish you the best of luck - as you say, the asset backing is great and the company should do well moving forward in the long-term. Just feel that this is a price catalyst gone and that any new investors looking in may be deterred by the headline EPS figure putting Titon on a PER around 15. Entirely my mistake for not realising how the profits would be booked!

El1te

P.S. Keep your portfolio going - I check in every so often out of habit ;)

[eezymunny] 08/5/2014 09:04

Yes your points are entirely valid El1te, but we're valued well below TNAV still, cash flow is excellent (+£500k if you strip out working capital movements) and it sounds like UK stuff will be better in H2. Lots of value still. We can only guess but full year eps may be 5p+ at best guess. TON are pretty generous divi payers so I wouldn't be surprised if final divi is 2p for 3p total and a yield of 4%+.

And I'm always wondering how much their freehold property is worth. In the books for £2.3m as at Sep 2013 and they've been depreciating it for years. If they ever decided to move production overseas and sell up there could be a nice payday. May never happen of course.

One for the patient, methinks, TON are a prudent lot IMO.

[wad collector] 08/5/2014 08:44

Encouraging figures. Not bothered about todays market reaction ; holding long.

[el1te] 08/5/2014 08:28

Ditched my holding early doors, which is disappointing given that Titon didn't reach my target range and it really hasn't been held for very long.

However, I should have realised that the Korean profits will be part filed under the 'Non-controlling interests' line of the income statement, thus the EPS figures will be low. Asset backing is still there, but the market probably won't wake up due to the EPS reporting methods and the fact that Titon seemingly appears to trade on a high PER. I suspect this is the reason for the muted reaction.

Best,
El1te

[shanklin] 07/5/2014 15:30

Added a few today so I hope they're OK.

[mr. t] 07/5/2014 15:24

We'll find out if results are tomorrow soon enough. I think it will be a rewarding day if so.

[mr. t] 02/5/2014 15:22

With the continuing strong economic news Titon must be doing well. And yet the market valuation is lower than after the last trading statement.

If the pattern is the same as last year then Titon's interims will be out next Thursday.

I'm looking forward to them!

[mr. t] 02/5/2014 15:16

And the South Korea economy is doing well too, thanks to construction:

www.bbc.co.uk/news/business-27122703

"South Korea's economy grew more than forecast in the first quarter, helped by a jump in construction and exports.

Asia's fourth-largest economy expanded by 3.9% in the January-to-March quarter from a year earlier. Many analysts had forecast growth of 3.7%."

[mr. t] 02/5/2014 15:14

More positive news in the UK construction stats today with a PMI of>60:

www.markiteconomics.com/Survey/PressRelease.mvc/de7020ca97664c21b16fdcd9ae9af1ae

"Residential construction was the best performing broad area of activity, and the rate of expansion in April remained one of the fastest seen over the past ten years. Moreover, the current 15-month period of continuous house building growth is the longest since 2006/07."

[rainmaker] 29/4/2014 01:23

Martin et al, I think we should move much higher from current levels as per January trading update Titon made a £329k profit in the last quarter of 2013 so £1.104mln on an annualised basis so apply the 21% UK corporate tax rate(although due to losses in the UK, the effective tax rate of the Company was just 5% last year) and I believe you get 10p of earnings. According to the trading statement growth in South Korea is expected to remain strong for the rest of the financial year ie until 5 April. Then you have growth in the UK for the first time since the banking crisis in Autumn 2008 and a rising trend in the replacement window and door market, a 4% drop in the first half of the year, followed by 8.5% and 9.5% in the third and fourth quarters respectively.There have been strong recent NHCB new build registrations which augurs well for the UK business although the Company states that it expects no major change.

Aside from tremendous growth in South Korea now reaching criteria mass where it makes a real difference to the overall group operating performance and the realisation that the Company will make a return in excess of its cost of capital on its tangible assets of £12mln or 114p a share, I think what really excites me about this business is my conviction that the remaining manufacturing business in the UK will soon be moved to South Korea with surplus property sales and thereby taking a UK business that lost £420k last year and making it profitable. Titon are the UK market leader in the manufacture of window and door fittings and ventilation systems so economies of scale and advantages and such products are ideal candidates to be manufactured in lower cost South Korea-I've read that production costs there are half those in the UK.

DYOR, AIMHO

regards

[shanklin] 11/4/2014 16:10

El1te

Yet to read your article but having sold at circa 50p some time before the end-Jan trading statement, and having failed to buy any after said statement, I have just bought a few on the current weakness. Very illiquid so would not want very many.

Cheers, Martin

[el1te] 11/4/2014 13:13

Good points Eezy. Took the 'fallen' cash out of the NTAV calculations though to form a base estimate. Ultimately, the disparity is pretty small so doesn't have a large impact in terms of the overall NTAV.

The comfort of TON (As you are probably aware! Skipping back through the posts you have clearly been involved with TON for a while) is that the NTAV is above the share price, and given that the company is profitable, it is a nice secure position to be in, despite the 'Korean discount'.

Reminds me of the situation with MWE a few months back. Expect a continued re-rate here as well.

El1te

[eezymunny] 11/4/2014 12:40

Nice write-up El1te

FWIW I added TON to the EezyMunny portfolio yesterday



Just a couple of points:

a) you say cash lower as of Jan therefore net tang assets lower. That's almost certainly not true as that cash will have been absorbed into working capital or possibly capex (tho capex on intangibles eg software would indeed reduce NTAV). Indeed with on-going profitability NTAV should be higher by now.

b) There is freehold property in the books which has been depreciated for years so may be worth much more. Potentially also less as I guess it's mostly factory premises. Probably irrelevant anyway as factory needed for on-going biz. Just thought worth mentioning.

As you say share price performance dependent on future trading but sounds like good numbers are all but in the bag for H1. We should find out early May.

[el1te] 10/4/2014 23:38

Titon Holdings - Asset Backed Earnings Play

New write-up on Titon available below. Feel free to sign up to free email updates via the right hand sidebar and leave comments on the article



Good Luck with your investments

El1te

[wad collector] 10/4/2014 14:40

I just added this afternoon at 70p - the order had been sitting a while with the spread too high for my liking.