Volex Share Discussion Threads

[valhamos] 23/6/2021 11:25

Comment 1: "Another Polly Peck?"

Comment 2: "....would buy in again at under £3.00"

Polly Peck was fraud. Casting aspersions that VLX might be another in Comment 1 is not consistent with Comment 2 that you would buy under £3 as you would not want to buy a company at any price if your thinking in Comment 1 was serious. And if not serious why bother making it?

[trcml] 23/6/2021 11:14

Polly Peck had a question mark after it! Moreover, why on earth if I had any evidence that might be of interest to the police would I want to present it to this board?

I find the snag with trading statements is that the share price responds accordingly so that by the time the actual results are released the share price has run out of steam. Volex share price has rocketed this year and imv is now quite possibly ahead of itself so that any more growth in the near future is already priced in. Re-reading the results, I note a number of caveats indicating cautiousness in expecting too much going forwards.

I sold my holding recently but would buy in again at under £3.00

[dougmachin] 21/6/2021 15:31

I got this Final Dividend announcement on 17th June:

Ex-Dividend Date Thursday July 15 2021
Pay Date Friday August 06 2021

2.2p.

[nk104] 21/6/2021 15:21

Well TRCML, if you have any evidence that it's like Polly Peck then I presume you'll either present it here, or take it to the police.

Put up or shut up.

[ymaheru] 21/6/2021 12:59

Hi TRCML, it’s not like Polly Peck as far as I can see.
1- VLX has decent free cash flow, almost as high as net income (profit after tax)

2- VLX often has zero net debt

3- VLX acquiring companies that are (apparently) doing well and very related to its core copper cable market.

I can’t rule it out, but it doesn’t seem like numbers are all fabricated.

[red ninja] 21/6/2021 10:46

Volex still looking good.

Global economy inflation concerns.

[trcml] 21/6/2021 10:22

Volex results too good to last. Another Polly Peck?

[red ninja] 21/6/2021 10:10

Market worries about inflation, US market down Friday, Asian markets down today.

Worries of rising interest rates in US and UK.

[ali47fish] 21/6/2021 09:55

on the other hand it is still volatile even when the share price for copper is down - so what's the problem

[owenski] 21/6/2021 09:09

It's also entirely possible that their $65m target is achievable purely on current organic growth. EV sector likely to be the outlier here.

[ijamlon] 19/6/2021 22:22

Volex written up in latest Investors Chronicle as a 'buy'. They relay Panmure Gordon's belief that their $65m 2024 profit target is achievable with more acquisitions.

[ymaheru] 19/6/2021 01:29

Yeah, agreed.

Volex doesn’t get the same interest as some other listed companies, but chucking out 80-155% EPS growth is pretty rare and makes Volex a stand out.

I make them worth north of 800p using present value of future cash flow, so I’d hope they’ll be trading way into the 400’s by year end.m, if not 500p+.

I’m calculating based on 28c profit after tax next year, which sounds realistic/ conservative given:
1- DeKa only featured fir 6 weeks in these results
2- electric vehicle revenue soaring
3- medical rebounding

[its the oxman] 18/6/2021 13:33

400p in our sights, nice to see the continuing positive move upwards as investors reflect on results and growth to come.

[zingerburger] 18/6/2021 13:06

And then some

[sooty snipes] 18/6/2021 12:47

I can see 4 quid just on the horizon.........Yippeeeee

[igoe104] 18/6/2021 11:36

Should see much bigger numbers this year, as we have Deca for a full year more sales of EV cables and hospitals with delayed cable orders. 5 years we could be looking at £20 plus a share, as EV increases significantly.

[owenski] 18/6/2021 09:38

I was concerned that copper input prices were going to have a negative impact on margins. It was good to hear they are focused on protecting their margins and to see the charts showing margin progression over the years since NR took over, so, was good to hear that customer contracts are based on copper costings being passed on. An important detail.

I wasn't expecting to see results this good either, from the presentation it seems further organic growth expected again this year, especially from the sectors more affected by Covid - as these sectors start to return to normality.

To be noted, NR did mention that their original 650m revenue target over time is likely to be exceeded. The outlook statements were very positive.

Onto EV. EV growth rates in developed nations including China are very high, during early adoption of new technology - etc - growth/penetration rates can remain in triple digit territory for some years, mainly because if the market - like vehicle markets - are global and large to start with, then the saturation takes time. Although growth rates can be high, they start from low bases this is why rates remain high in early stages, what this means for VLX is that the 193% growth rate for their EV sector are likely to remain at that rate for some years. Political will and incentive is driving EV take up, so essentially, this market is a sweet spot for participants. Again, NR was very positive on the outlook for this sector. At the next results I don't expect EV to be sub 12% of the pot.

[grabster] 18/6/2021 07:55

Is Volex a share to buy today?
Kevin Godbold | Thursday, 17th June, 2021 | More on: VLX


Power products maker Volex (LSE: VLX) has made great progress since I last wrote about the firm two years ago. Back then, I saw a long-floundering business turning itself around. The share price was near 102p.

Since then, the company has been posting some impressive double-digit percentage annual increases in earnings. And City analysts expect further progress ahead. The market has been paying attention and the share price is near 364p today.

Volex has emerged as a focused business
Despite the good performance of the stock, my opinion two years ago was a little off-key. I thought the valuation looked undemanding with a forward-looking earnings multiple of almost nine. However, I also said: “I don’t believe we’re likely to see a valuation up-rating. The low-margin, cyclical nature of the business demands a modest rating.”

But I hadn’t appreciated the full extent of the reshaping of the business under its management team installed around 2015. And the company sold the Volex accessories division 30 years ago. All those sockets and switches being turned out bearing the Volex name have nothing to do with Volex plc anymore.

These days, Volex describes itself as “a leading integrated manufacturing specialist for performance-critical applications and power products.” And a valuation rerating has occurred. Now the forward-looking earnings multiple for the trading year to March 2022 is just below 20. And City analysts expect earnings to increase around 17%.

Volex has emerged as a growth business with one foot in the market serving the expanding electric vehicle sector. But is the share still buyable now? The full-year results report released today sheds more light on the investment proposition. The figures are good. In the 12 months to 4 April, revenue rose by just over 13% compared to the previous year. And underlying profit before tax increased by almost 37%.

Acquisitive and organic progress
Part of the growth strategy involves acquisitions alongside organic progress. For example, the company completed the acquisition of De-Ka Elektroteknik Sanayi ve Ticaret Anonim Sirketi in February. The Volex directors reckon the Turkey-based business has helped them “create the only truly global power cord manufacturer.”

Meanwhile, revenue from the firm’s electric vehicle (EV) customers increased by 193% in the period. That’s an impressive increase from an exciting sector. But revenue to EV customers came in at just under 12% of the total. In other divisions, Consumer Electricals grew by 5%, Medical declined by 3% and Complex Industrial Technology grew its revenue by 13%.

Looking ahead, the outlook’s positive. But Volex is a more expensive stock than it was. So support for the valuation relies on ongoing progress with earnings. And there’s always a risk that earnings could stall leading to a falling share price.

I’m a little cautious. Nevertheless, I’m still tempted to buy a few shares on dips and down-days to hold as the long-term growth story unfolds.

[stockmaster5] 18/6/2021 06:49

Very impressive presentation. Those acquisitions were very shrewd. Clearly a very well managed operation. Full confidence. Might be time for a top-up!Bravo

[its the oxman] 17/6/2021 21:02

Chart certainly looks good for steady climb to 450-500p. Long way to go here regardless, re momentum and ev etc.

[zingerburger] 17/6/2021 19:33

Going to hit 500p soon

[trcml] 17/6/2021 17:37

or not. share price was up with events before today.