Trakm8 Share Discussion Threads

[blondeamon] 17/11/2017 07:50

Filter him Davros, he's one of the many handles of the same troll.

[davr0s] 17/11/2017 07:49

And the link is 4 months old

[davr0s] 17/11/2017 07:47

Lol - desperate attempt by shorters following a strong breakout. Nothing bearish about current chart at all

[opodio] 17/11/2017 07:39

Co is a horror story & unkept promise turned blue sky to dark grey.....cashflow a problem hewe esp route minkey
all the insurance deals are zero margin


chart setting itself up for another shorting attack

[bone apart] 16/11/2017 23:56

TRAK could be Trendwatch's pick of the month. "Prospective PEG ratio of under 0.4" They say the worst is behind them, last figs bad due to continued investment & contracts signed late in 2016 will only show in '17.
It's in a sweet spot due to evolution in car telematics and competitors taken out for x4 TRAK's current mkt. cap/subscription.
Bowl to £4 not unlikely IMO...

[blondeamon] 16/11/2017 21:17

FY 2017
"Gross margin increased by 1.1% to 49.4%, helped by lower manufacturing revenues being replaced by higher margin solution revenues and their accompanying recurring revenues.

The effect of Brexit and increased raw material prices is estimated to have decreased our gross margin by 2%"

FY 2016

"Our gross margin percentage increased by 3.1% to 48.3%"
----------------------------------

Last year gross margin rise would have been 3.1% if not for Brexit.

Between 01 April 2016 and 31 March 2017 the GBP/USD rate dropped 8.8% from 1.42 to 1.25 causing a 2% loss in gross margin for TRAK.

- So far this year, since 01 April 2017 the rate has been between 1.28 and up to 1.36. Just the currency appreciation alone (average +5% up) should boost the gross margin by (and I am conservative here) say 1%.

- Add to that the juicy Roadhawk 600 sales that have the 4x bigger margins than the rest of the devices.

- Also add the increased number of Fleet Sales this year compared to previous years. (Iceland, Mecalac, Calor Gas)

- A big unknown is the Shell contract $$ and the grants they received these years from all the EU projects RM is involved in. All those fees have a 90% margin as it's pure software.


I estimate gross margins can be up to 4% this year which if coupled with the estimated 32m forecast revenues Finncapp projects, pbt will not only just exceed the anticipated £3m but will surprise the market much further.

[allstar4eva] 16/11/2017 18:42

Good to see you in here LM. The fundamentals seem to support your rocket chart view :-). The market is playing catch up here hence the strong rises and re-rating.

Results should confirm a minimum of a PE of 20 for this yr (at the current sp) and a PE of just over 15 for next year with 24% and 39% eps growth respectively for a PEG of 0.8 dropping to 0.4. which is just too cheap imho! The approaching results should provide the rocket fuel to reach a more suitable valuation prior to and after results - all imho:-)

[luckymouse] 16/11/2017 16:57

Tks - It doesn't directly - you want the order book to be notably tilted to one side - but a momentary snapshot of L2 does not reveal the all important ongoing pressure - the above vol & obv chart does so can be useful - it doesnt really matter if buying volume is new money, old money or short closing money - it's buying & its dominating the sellers is what counts - esp giant inst footsteps which can flip an overhang into a stk squeeze.
[The rocket is just for none TA types :D]

[jamiemp] 16/11/2017 16:31

Sorry LM I'm sure I'm being thick but how does this show a short squeeze?

I'm a big fan of your input btw, I do like to do some basic charting myself for entry/exit.

[luckymouse] 16/11/2017 16:17

Told you it would go quick
jamiemp - just watch the daily & hourly vol & OBV if you want to see the flows - blues clearly winning

[jamiemp] 16/11/2017 16:07

I doubt there are many shorters, although there's no way to check on AIM as far as I know

[dc2] 16/11/2017 10:19

Whilst I was a little disappointed that the sharesoc post from a while ago didn't include the article as a loss leader (knowbodyyouknow made a good point at the time) I signed up anyway to see how it covers other shares (now I have a feel for their work). Not every share has holders such as Blondeamon and I thought the article was ok.

I do wonder about their concern about the time "where telematic solutions are installed automatically by the vehicle manufacturers themselves". The fleets I have worked with over the years do not have the infrastructure to have a OEM wide solution. They tend to want to track both trailers and cabs including functionality such as rear door opened outside of designated areas. They also employ third party drivers with their own cabs and rent cabs as required. In other words, units from potentially different manufacturers with additional functionality. Then there is the manufacturer, I do not believe they would want to create and maintain the systems necessary to give the fleet what they want.

I am not saying cabs won't come installed with cameras and trackers; just that they will probably conform to some standard to allow tracking companies to integrate the devices.

Waffle over, any thoughts on the future of tracking?

[bhxian] 16/11/2017 07:53

Blondeamon
I must admit that comparing the so called expert analysis and the
the one you recently published -and then updated -yours was by far and
away the most professionaly well researched and helpful analysis.I would
commend any putative investor to read yours -the comparison then becomes
very stark.

[allstar4eva] 15/11/2017 20:26

The share price is up 60 odd % in a month following the last trading update. A re-rating is in progress. Traders will want to be in ahead of the interim results in 7 trading days' time. I wouldn't be surprised if this is over £1.80 before those resuts.

It's funny that those who have been in a share longest don't seem to realise when a re-rating is taking place! Strong today in a weak market says it all.

[blondeamon] 15/11/2017 19:43

Very badly prepared piece, almost no research and knew all that by watching the videos. Didn't add anything useful.

Happy to see the volume rise continues as more people are seeing the potential here. But don't expect much action until after the results and the outlook update of the last 2 months.


180p should be reached by year end IMO, with pull backs on the way. I added some this week and will add some more if it breaks out at 180p

[dc2] 15/11/2017 19:04

thanks PJ0077, not 100% I agree with their viewpoint but will join tomorrow.

[pj0077] 15/11/2017 17:50

dc2

Signing up to ShareSoc full membership is a no brainer at £50/year, especially given that they host many company meetings each year.

As for their research, I've never read it.. you'll have to make your own mind up:

TrakM8 AGM report Sept 6

By Bill Hall

It is a tad unusual for a company to hold its AGM in a public car park. But TrakM8 (TRAK), which provides telematic solutions to the transport and insurance industries, followed up its AGM in the car park of Coventry’s Ricoh Arena with a technology roadshow in a bid to convince investors and customers that it is a high-tech company with a future, and not just a chequered past.

TRAK, a one time AIM growth stock, has struggled over the last 18 months as its earnings slumped, its revenue growth slowed, and its free cash flow dried up. Its shares, which had risen more than five fold in a year to nearly £4 in late 2015, had collapsed to a low of 60p earlier this year.

They have recovered to around 90p, but that only values the company at £33m or little more than one times revenue compared with Quartix, a smaller and much more profitable competitor, that sells on over seven times sales and has a market capitalisation of over £170m.

TRAK’s AGM, which began at 10.30am, was a brief affair. The company had released a low key trading update ahead of the meeting describing trading in the first five months as “satisfactory”. It remained on track to report a “much improved financial performance” for the current financial year. Finncap, the company’s brokers, estimates a 28% growth in adjusted eps to 7.2p in 2017/18 and 10p the following year.

John Watkins, the executive chairman, did not add any extra information in relation to the company’s short-term financial performance in response to questions from myself and Mark Bentley. He reiterated the company’s commitment to exit the low margin manufacture of telematic devices for third-parties, and concentrate on boosting recurring revenues which he described as the “bedrock of our business”. (Currently, they account for just over third of revenues compared with two thirds at rival Quartix).

The number of engineers employed grew by 39% last year and now account for close to a third of TRAK’s 265 staff. It collects over 3bn miles worth of vehicle and driver data annually from the 190,000 units reporting to its servers which it uses to fine-tune its proprietary algorithms helping customers on everything from optimising fuel efficiency, to avoiding vehicle breakdowns and pricing car insurance risks.

Mr Watkins stressed that the abrupt departure of James Hedges, the long time finance director, and second biggest shareholder with a 6.3% stake, had been amicable and triggered solely by the decision to move the group’s finance team from Dorset to the group’s manufacturing site in the West Midlands.

Talking to Mr Hedges after the AGM, I got no indication that there was any more sinister reason. He seemed intent on remaining a major shareholder and will stay on to facilitate a smooth handover to Jon Furber, TRAK’s new finance director, a chartered accountant with a strong software industry background.

Whilst TRAK’s AGM did not reveal much new, the company’s Technology road show in the Ricoh Arena car park was more informative. It began with upbeat presentations from staff of three of TRAK’s biggest customers – the AA, Direct Line and Iceland Foods.

Chris Bailey, the AA’s motoring innovation director, said that when his company had started working with TRAK seven years ago it had been regarded as a “risky choice”, because of its small size and lack of financial backing. However, the AA was won over by the nimbleness and speed with which it has delivered bespoke telematic solutions to its need for a driver behaviour system that was easy to install and would cut fuel expenditure across its fleet.

TRAK’s devices have cut the AA’s fuel bill by £1m a year and it has partnered with TRAK to create a similar product for its private and business members which has achieved fuel savings of 10-15%. The AA connection has also been critical in helping TRAK win business from Intelematics, an AA associate which provides motorists in Europe, Australia and the US with information on the health of their vehicle and the journey ahead.

Direct Line and Iceland Foods echoed Mr Bailey’s praise for TRAK’s products and ability to deliver bespoke solutions speedily. Dan Friedman, Direct Line’s director of motoring development, said that TRAK was “excellentR21; at getting data out of cars which helped his firm monitor the driving habits of policy holders and tailor its insurance quotes for different types of drivers. “Fast and very competitive” was the way he described TRAK’s telematic offerings.

TRAK’s Technology Road Show was reassuring. It confirmed that it is one of the leaders in its field and impressed with its ability to attract and retain sizeable blue chip customers like Shell, Direct Line and the AA.

However, TRAK still needs to prove that it can generate decent profit growth from its blue chip customer base. Its growth has been far more rapid in the low margin insurance business where it has 124,000 units reporting, than in fleet management, where it has 66,000 units. Quartix, by contrast, which has a smaller installed base than TRAK, has been reducing its insurance-related telematics business and concentrating on expanding its more profitable fleet management services.

Mr Watkins says that TRAK is in a phase of rapid growth and significant investment which requires heavy investment in working capital. However, he notes that telematics remains a highly fragmented industry and recent corporate consolidations had valued target companies on the basis of revenue and installed base rather than profitability and cash flows.

This seems to be born out by recent transactions. Verizon’s $2.4bn acquisition of Ireland’s Fleetmatics, a leading global provider of fleet and mobile workforce management solutions, and Investcorp’s £165m acquisition of Norway’s Abax, another telermatics company with a fast growing UK presence, have been done at multiples of around eight and four times revenues respectively.

Talking to TRAK’s directors after the AGM one was left with the impression that a trade sale to a larger and better capitalised competitor would not be ruled out. Interestingly, the directors invested £615,000 as part of a £2m share placing at 65p last March. Why the share placing was so small, and was done at such a low price, remains a bit of a mystery since TRAK’s own plans suggest that its cash flow conversion is going to remain low below 50% for the next year or two.

TRAK might have a technical edge at the moment. But does it have the financial backing to adapt to an era of driverless cars and trucks, where telematic solutions are installed automatically by the vehicle manufacturers themselves, and not left to the decisions of individual owners and fleet managers?.

This may partly explain why TRAK has been slow to strengthen and restructure its board which is dominated by its founders and executive directors. Mr Watkins, who owns 17.3% of the company, is executive chairman and his son, Mark Watkins, is chief operating officer. There are another four executive directors on the board, which includes brothers Matt and Tim Cowley, who were founders of the business.

There are two non-execs on its board and one of them, Keith Evans, a former Price Waterhouse partner, has recently been appointed deputy chairman. But the board still looks too cosy and dominated by engineers rather than hard-headed business types.

TRAK may yet turn out to be a great company but it could do with the appointment of a strong outside chairman not afraid to ask a few pointed questions of its executive team of which the most pressing is why its main quoted competitor (Quartix), which operates in similar markets, so much more profitable.

Nevertheless, TRAK, despite its recent failings, needs to be applauded for its continued willingness to post videos of its results presentations and capital market days on its website. Videos of the Coventry presentations can now be viewed on its website; hxxps://www.trakm8.com/investor-relations/annual-report-and-accounts (scroll to bottom of he page).

[dc2] 15/11/2017 09:45

Does anybody have a view of full membership of ShareSoc? I'm tempted but would like other people's views. In particular, they posted on here that they had an AGM review of Trakm8 and I would like to know the quality of their analysis i.e. not just a rehash of the AGM but some clever insight (asking too much?).

Thanks in advance.....

[blondeamon] 13/11/2017 17:23

opodio is just another handle of the other trolls, I have him filtered

[pj 1] 13/11/2017 17:10

opodio
13 Nov '17 - 13:56 - 2036 of 2038    2   0 Moderate | Ban
TW said it was worth 0p
===============================================================================
When?

As far as I remember he called it short to 50p (it reached 80ish).

[bone apart] 13/11/2017 16:07

TW is worth 0p

[she-ra] 13/11/2017 13:58

Could Quartix make a move for this?

[opodio] 13/11/2017 13:56

TW said it was worth 0p