Volex Share Discussion Threads

[patient fox] 15/10/2020 08:06

Raised my personal target to £3 by summer.expecting upgrades soon,good long term hold wonder what they do with all that cash.

[gdjs100] 15/10/2020 07:53

I'd be astonished if we didn't.

[acefromspace] 15/10/2020 07:53

Very nice little announcement. Can we break the £2 today.

[igoe104] 15/10/2020 07:33

Yes 25% above last years profit and now $31 in cash. Excellent company this is.

[ayl30] 15/10/2020 07:32

Above expectations, that good to hear

[acefromspace] 08/10/2020 12:50

Have to admit to selling some here a month back thinking we might get a drop and I'd get them back cheaper but that's not happened. Looking strong now so brought back my shares I sold. Fully loaded again now.

[patient fox] 07/10/2020 16:50

hoping they will use that huge cash pile,Then maybe upgrades to 2022 est which already stand at 20p eps according to stockopedia.

[igoe104] 07/10/2020 16:35

I've just registered for the VLX results presentation on 12th November. I was automatically sent the link..

[epicsurf] 07/10/2020 16:29

Some wind in the sails at the moment
Slowly ticking up

[epicsurf] 23/9/2020 13:33

Hi Ali47fish ,could be any number of reasons ,investor boredom , lack of news to be honest have given up trying to guess short term movements ,tend to have a longer horizon most times,if I like the story tend to buy on dips

[ali47fish] 23/9/2020 11:00

epic why has the share price retraced and seems to be stuck there?

[bbluesky] 14/9/2020 10:06

Must be time for an earnings enhancing acquisition soon.

[epicsurf] 05/9/2020 22:48

Questor: Volex has delivered on its promise and the shares have soared. Should we hold on?

Questor IHT Portfolio: this cable assemblies maker has put its house in order and profits have responded – but shares don’t look overvalued

Update: Volex

This maker of cable assemblies has been one of our portfolio’s best performers. We tipped it at 82.6p two years ago and the shares now trade at 188.5p. It’s not hard to see the reason: profits have risen very strongly and, after a period in the doldrums, the shares have now caught up.

At the time of our tip in August 2018 the forecast operating profit for 2020 was $20m (£15m) but the actual figure achieved by the firm was $31.6m on an “underlying221; basis.

Downing, whose Strategic Micro-Cap investment trust has about 16pc of its money in Volex, said the “quality”; of the firm’s earnings was also improving. “When we began researching Volex in 2017 the adjusted operating margin was less than 2pc,” the fund manager said in a letter to investors this week. “In the most recent results it is over 8pc.”

It added that Volex had become far better at deciding where to invest. “Historically Volex had appeared highly cash consumptive, investing in the wrong projects with low returns,” the fund manager said.

“That has changed. There will be one-off capital expenditure projects required to support growth, but generally Volex is considerably less capital expenditure intensive than other companies we have encountered of its size. Working capital is also much more tightly controlled.”

Volex vs FTSE 100

From 8 Sept '15 to 3 Sept 18:24:56

-50.0%0.0%50%100%

⬤ FTSE 100: 6146.1 → 5850.9-4.8%

⬤ Volex PLC: 82.06 → 188.5129.7%

More share information on 

Sign up to our Business Briefing newsletter for a snapshot of the day's biggest business storiesRead Questor’s rules of investment before you follow our tips

As we have written before, such discipline is crucial to delivering high returns on capital, one of the key indicators of a healthy business. In Volex’s case the result of its transformation has been, in Downing’s words, “improving, and generally very high, return on capital employed”.

In the most recent results the figure was almost 30pc, “which is high on both a relative and an absolute” basis.

Another of Questor’s favourite signs of a strong business is good conversion of profits into cash and Volex scores well here too. In fact in its most recent full year it generated operating cash flow of $51.7m, far higher than that $31.6m figure for operating profits, even if some of the excess was exceptional in nature.

Downing added that “management217;s confidence in the group’s ability to continue to generate strong cash returns has been underlined by the commitment to the dividend”, which was 3p for the 2020 full year.

Although Volex has been affected to some degree by the pandemic it said in July that revenues and profits for the three months to June had been at last year’s levels.

Nat Rothschild, the executive chairman, said: “We continue to see weakness primarily in the medical installation sector, as hospitals around the world remain closed for non-critical medical procedures.

“In our electric vehicle business, demand is approaching pre-crisis levels as customers reopen their factories and consumer preference continues to shift towards electric vehicles. We continue to see resilient demand in our consumer electronics and data centre businesses.”

He said the firm had about $30m in cash and access to a further $30m in undrawn credit. Despite the strong rise in the shares they trade at a modest 13.9 times 2020 earnings.

Questor says: hold

[mysteronz] 04/9/2020 07:13

Positive (hold) recommendation in Telegraph Questor column. Reiterates greats metrics of the business

[sooty snipes] 01/9/2020 13:14

Held from 40p. Topped up some more at £1 on the last dip when it went as low as 80p. I too was looking to have another top up but can't complain.

[patient fox] 01/9/2020 12:55

Wanted to buy more on a dip ....oh well. £3 my personal target middle of next year.

[sooty snipes] 01/9/2020 12:50

I love this share. The board making all the right moves

[imastu pidgitaswell] 01/9/2020 12:07

Not too bothered by the general market malaise, is it?

:-)

[reddevils1] 01/9/2020 12:06

Promotion to the aim100 on the cards this week?

[blondviking] 28/8/2020 10:31

Shankin

Very positive Times article. Nice lift this morning, and could go a lot further

[shanklin] 27/8/2020 06:55

Second piece is on VLX and positive.

[nallen1] 26/8/2020 16:55

StockopediaDirector Buys – an interesting cluster of decent-sized Director buying has reinforced my bullishness on this share. I was late to the party with this share, but started buying recently, and am pondering whether to buy more when funds permit.It's a very convincing turnaround, which I've covered extensively in the archive here.There's a terrific results presentation here on InvestorMeetCompany, which clinched it for me, and made me want to buy the shares, after having done my own research. In a nutshell, the new strategy is to focus on high margin, more complex electrical assemblies. This has raised the operating margin to about 8%, with a target of 10%. Bolt on acquisitions (often from owners who want to retire) is expanding the group, hence it is targeting $650m revenues in 5-years' time. Put that on a 10% margin, and we get $65m p.a. profit. Take off tax, that's now say $52m, convert into sterling, is almost £40m p.a. earnings. Put that on a PER of 15-20, and I get to a valuation of £600-800m. The current valuation is £260m. (at 176p per share). Hence good potential upside over 5 years, and growing divis whilst I wait.The balance sheet is stuffed full of cash, so I don't think it will need to dilute through placings, and management own a ton of shares, so won't want dilution. What's not to like?! Plus it's got good organic growth potential from electric vehicles, which are likely to boom in the next decade, and data centres. Management really impressed me on the IMC video presentation.The more I think about this share, the more I like it, as a 5-year buy & hold. As always, this is just my personal opinion, which is sometimes wrong, so you must do your own research, and take ownership of your own trades/portfolio.I'd be particularly interested in any informed negative views on VLX, as it's arguably more important to hear the bear case, than seeking confirmation bias from people who agree with me!.Volex Director transactions announced recently have been;26 Aug 2020 – 500,000 shares bought at 165p by company connected to Exec Chairman, Nat Rothschild. His total holding now 37.97m shares, 24.9% of the company.19 Aug 2020 – 47,302 shares bought at 160p by CFO, Daren Morris. His total holding is now 1,070,000 shares, 0.7% of the company – quite a chunky holding for a CFO. Meaningful sized purchases in the market by a CFO are generally perceived as being a positive indicator.7 Aug 2020 – 50,000 shares bought at 145p by wife of COO, Sharon/John Molloy. Their total holding is now 1,311,589 shares, 0.86% of the company – again, a meaningful sized stake.5 Aug 2020 – 98,561 shares bought at 137p per share by wife of COO, Sharon/John Molloy.6 July 2020 – 139,210 shares SOLD at 148.2p by CFO Daren Morris. This is curious! I wonder why he sold these shares, then bought some of them back at a higher price just weeks later (see above)?26 June 2020 – issue of 432,040 new shares, re deferred management bonuses. Not stated, but I assume these have been issued for nil consideration as they're bonuses, to: Nat Rochschild 155,201 shares, Daren Morris (CFO) 155,201 shares, and John Molloy (COO) 121,638 shares.23 June 2020 – 67,171 shares bought at 151.4p per share by Nat Rothschild (Exec Chmn)22 June 2020 – NED buys 10,000 shares at 156p per shareThe only oddity in the above list (which I stopped at an arbitrary point working backwards), is the CFO selling his bonus shares on 6 July, but then buying some back shortly afterwards. I wonder what the reasons behind that were?