Venture Life Share Discussion Threads

[apad] 21/12/2017 06:39

From Share Prophets:
"IQE (IQE) has today stated that it is "on track to exceed full year expectations". But hang on Henry. Sales are vanity, profit is a matter of opinion, cash is reality. And so we read that:
The Group announces that it expects full year revenues to be ahead of market expectations, and to be not less than GBP150m for the year ending 31 December 2017. yadda yadda yadda... profit before tax for the Group is expected to be ahead of current market expectations. Yadda yadda yadda. ... Net funds are expected to be in the range of current market expectations.
In other words sales and profits are ahead of forecast but cash generation is - despite the increased sales and profits - not ahead of forecast. That does not read well.
The criticism I have had of IQE has always been that whatever it says about profits it has been a rotten generator of cash. And perhaps folks are waking up to that point. At 141p ( down 11% on the statement) the company is still capitalised at £1.07 billion. The multiple of earnings (a matter of opinion) is sky high, the multiple of free cash generated is just plain silly.
This statement only encourages me in my bearishness."

[lauders] 21/12/2017 00:36

red - And where has the CEO of Low and Bonar gone? Yup.... to a company I hold shares in, namely FENR! Had a negative effect on FENR's share price too. Still as stated on the FENR BB I would assume FENR did "a bit" of due diligence before making the decision to offer him the position!

gsbmba99 - Would you please add a short write-up on PAM as it is one of your selections and it was not covered in as much detail within your reasoning post #15640? Some interesting selections! Not sure I am too comfortable with mortgage related businesses but that is probably just me.

[attrader] 20/12/2017 23:36

Thanks APAD.

gsb, Added you in. Like JIM alot, thanks for explaining their business model.

Busy day today. Just back from meeting a friend who is bit of a risk taker. Loaded up on loans to buy properties up north for cheap after Brexit scare. If it works out he would make it big or go bankrupt.

[ashehzi] 20/12/2017 22:46

The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. #investorquotes #WarrenBuffet

Competitive advantage + durability = long term hold.

[ashehzi] 20/12/2017 21:08

Re. "I couldn't possibly choose new companies in big chunks - incremental entry is my style." Best way to protect yourself against capital loss.

[janeann] 20/12/2017 18:23

apad - yes - I have owned 4 of mine for many years (LTG included) and generally increased over time; spe and of course prsm are more recent. Acso is a large part of my portfolio and as you say if there is no reason to change why do so. Although (sometimes miguidedly) I do try and derisk by selling into peaks and buying back the troughs. Interestingly it was reported somewhere that Burnett is aiming to turn it into a billion pound (edited from dollars) company - no reason to think he cant do it at present.

[gsbmba99] 20/12/2017 18:10

I light of APAD's comment, I should replace BLV, which I don't own, with PAM, which I do.

[gsbmba99] 20/12/2017 18:08

Please bear in mind, when I finish near the bottom, that my "portfolio" is built for dividend growth. Arcontech (ARC) - for reasons Janeann mentioned. Shares are good value. They get paid in advance. Lots of cash on the balance sheet. Have already stated they have enough cash so, in absence of any M&A, could show interesting dividend growth. New product currently in trials. Mortgage Advice Bureau (MAB1) - 2H17 gross mortgage lending has been up high single digits YoY and UKFinance/Council of Mortgage Lenders recently upgraded 2017 and 2018 forecasts (albeit modestly). New technology being introduced to reduce paperwork which should hopefully benefit adviser productivity. Opening up of product switch market (new mortgage with same lender) means market opportunity £90bn (or +30%) larger than 18 months ago. New direct to consumer advertising commences in 2018. Despite recent senior hires and advertising, no change to forecasts whereas most companies would have reduced as a result of "investing" for growth. Makes me think things are going a bit better than previously planned. Liontrust (LIO) - They bought the sustainable investments business from Alliance Trust in April. They hired a new head of distribution about a year ago. They've hired a fixed income manager and strategist who, judging by the Kames funds on Trustnet that changed manager the day before LIO announced their arrival, used to co-manage Kames Strategic Global Bond ($638 AuM according to Trustnet), Kames Strategic Bond (£320m), Kames High Yield Bond (£908m) and Kames Sterling Corporate Bond (£604m). If 10% of his prior clients follow him, could lead to nice amount of net new money. Also, Reade Griffith (Polygon) owns 10%. Jarvis Securities (JIM) - I am hoping for EPS growth attractively into double digits for duration of interest rate raising cycle. See my previous comments on thread. Belvoir Lettings (BLV) - the only one I don't currently own. They bought Brook in July. Brook is a MAB1 appointed rep. At time of acquisition 32 staff. in 5 months since acquisition 3 further hired and more in training. Plan is to roll-out mortgage advice to most of Newton Fallowell (about 80 locations, I think). BLV bought Brook days before the end of their fiscal year so RNS cites 2016 numbers. BLV announced Oct & Nov at Brook was +57% on last year. I think mortgage advice could more than cover any shortfall from tenant fees. Honourable mentions: Premier Asset Management (PAM) and BVXP, my two largest and NCC where I think forecasts are being deliberately held back.

[apad] 20/12/2017 17:56

Janeann - looks like we are both steadfast types.
The more I understand a stock that I own, the more I feel confident (unless the story changes) and the more difficult it becomes to select more puppies.
I couldn't possibly choose new companies in big chunks - incremental entry is my style.
apad

[apad] 20/12/2017 17:49

gsbmba99
If you own five or more shares you should choose from them, otherwise the comparison becomes a silly competition.
If you own less than five then there is a dispensation that you can choose what you are considering owning. This way we see real investment thinking rather than pointless competition entries that are always won by some crackpot selection (sorry(ish) for butting in attrader)
apad

[attrader] 20/12/2017 16:54

Gsb, please do. If you don't own 5, please add ones you like (along with reasoning)

[gsbmba99] 20/12/2017 16:32

Can I enter? Do I have to own the 5 picks?

[seroserio] 20/12/2017 16:12

Just created a word doc with only '4k' typed on the page. The doc is 15k. The march of time :-)

[melton john] 20/12/2017 15:00

Hi Apad, I worked at Stewarts and Lyoyds, Corby later to become part of BSC. Now just the tube making plant remains. My programming experience was on minicomputers using assembler language. Strangely called low level programming compared with high level such as Fortran although to my mind much more difficult. First computer in 1969 had 4K of memory with a clock speed of 1MHz but with efficient coding managed to do a lot.

[attrader] 20/12/2017 14:26

Thanks Jane, will add you in. Folks, keep them coming Criteria for 'comparison' 2018 - 5 picks - No roulette wheels- Foreign stocks allowed - Reason for each pick

[janeann] 20/12/2017 13:51

5 for the monthly non competition 4 as before -1 new.

ACSO Global ticketing specialist providing technology to improve customer experience primarily in leisure attractions theme parks etc. Leader in its field. Started out to avoid queueing at theme parks and developed since. Large global customer base. Growing by both expansion and acquisition, and growth expected to continue.

ARC Is a small niche player and provides solutions to managing real time market data - both software and consultancy. Number of very high profile clients with recurring revenue streams. Recently started paying dividends.

LTG is a dividend paying company providing digital learning solutions and interactive media programmes to a broad range of clients including government. Aiming to grow by both broadening its range of products and clients across a broader geographic range as well as via acquisition.

PRSM Software company specialising and leading the field in development of robotic process automation particularly of more routing back office tasks enabling the freeing up staff to do more productive tasks. Globally active in events and with a diverse range of high profile partners prsm is at the forefront of the developing technology.

ZTF Specialist manufacturer of plastic foam for a very broad and diverse range of industries including sports, automotive & construction. Many specialist uses and complex production process. Recent deal with Nike. Expanded production base in China now coming onstream and plans to expand in UK also. Dividend payer.


Dropped spe from this year as it has underperformed expectations. In the process of getting rid of some expensive convertible loan stock so will probably blossom in 2018. But I will continue to hold.

[hydrus] 20/12/2017 10:45

SQZ keeps grinding upwards but if the BP deal goes through I think it will more than double from here. Bought in at 15p thinking it was a very solid cash generative producer with lots of cash on BS and that when oil prices recover it will do well.It's now 83p and most of that is due to the BP deal. Amazing really. Totally unexpected.

[attrader] 20/12/2017 10:07

FARN as in Faron Pharma ?

[apad] 20/12/2017 09:22

2% on one puppy and 20% on the other.
Better to buy them in litters :-)
apad

[apad] 20/12/2017 09:09

Keep thinking about the latest Parsons (SOU) lecture. What a snake oil salesman.

Wondering about selling down more SOU whilst FARN is below 180p.

apad

[ashehzi] 20/12/2017 08:47

Ah LISP, reminds of univ days of AI classes. I agree to Janeann.

IQE is down, reminds of Mark Minervini who always caution about staying long before an update. While my experience is very less in stocks, I've seen there is more chance of price going down than up, so perhaps that's the reason of selling before such news.

[apad] 20/12/2017 08:39

Must have missed something on IQE as the share price is down.

Didn't look carefully as I am negative on the company.

apad

[redartbmud] 20/12/2017 08:39

APAD

Didn't like to mention that it was RR.

Having worked for a software company, I too am very twitchy. the fundamentals can change very quickly. Smaller businesses a more vulnerable.
Key staff turnover - poaching!!
New developments by competition.
Intellectual property rights.
Pricing - customer retention.

red