Volex Share Discussion Threads

[owenski] 03/7/2021 12:50

Not easy to make these specialist leads, this issue was covered in the recent webcast, so I'd say they have a reasonable moat not unassailable but a good head start. Also, the size of this market should naturally attract other suppliers in time.

[miti 1000] 03/7/2021 12:13

The big question is how exclusive are Volex as suppliers to Ford and VW . If volex have tied up most of the models, then its massive as in time,Ford and VW will sell way more cars than Tesla.

Volex have 1st mover advantage and are best in class so as Rainmaker says the potential revenue over the next few years could be be huge and that certainly is not in any broker forecasts.

[rainmaker] 02/7/2021 19:22

Its like any new technology, its very expensive at first then the price comes down as volume increased. A pocket calculator when first introduced, in 1972, almost 50 years ago was £30, the equivalent of £406.05 today

Your friends can still drive Petrol Cars but they won't be able to buy new ones in the UK from 2030. Sounds like the author of the report was studying for a degree in politics and not economics.

regards

[owenski] 02/7/2021 19:21

That's a costing based bias and not a fuel type comparative, EV dont match the Petrol in refill times or distance.

[kaffee] 02/7/2021 19:17

They are attractive alternatives if govt increase fuel duty and VED by a factor of 10. We will be incentivised to switch.

[owenski] 02/7/2021 19:14

It takes me 5 to 10 mins to fuel up my car and I'm ok for 500 miles till the next refill. Until EV's can come realistically closer to that then they're not attractive alternatives.

Anyone's ever been to The US or a US city like LA, you're not dealing with the size of a smaller European city. Or with the sheer size of a country like The US, I cant see a viable alternative to petrol, EV's are ok if the infrastructure exists to recharge and the usage is confined to short hops within a city, but driving outside for any distance takes some serious planning.

That said the take up from a low base is in triple digits and VLX will do well. I just don't share this vision no carbon fuels by 2030 - 9 years time, it just aint gonna happen.

[v11slr] 02/7/2021 17:46

Ultimately the shape of vehicle ownership will change. Once autonomous vehicles are widely available an app could summon one for your journey, it will be like having a driverless Uber.

[gswredland] 02/7/2021 17:12

I have c concerns about the cost of EV's.
I know lots of professional people who say they simply won't be able to afford a car!
I know costs will inevitably come down but it really depends on how much
Read an article recently about EV's setting up a generation of have's and have nots

[rainmaker] 02/7/2021 15:27

Thanks Miti, just thinking about how slow to react and seemingly unwilling US manufacturers have been to stop Petrol and Diesel Car production. GM have pledged to end such from 2035 and I cannot find any commitment from Ford other than a ban in Europe from 2030 but the Market is a great leveller and I believe that market forces will make them rethink their strategy as manufacturers will have to increasingly heavily discount ICEs models and slow moving inventory to convince buyers worried about a huge drop in resale values so fewer buyers at much lower margins. IMHO simple economics will greatly hasten their switch to EVs.

regards

[rainmaker] 02/7/2021 15:24

Thanks Sooty, just thinking about how slow to react and seemingly unwilling US manufacturers have been to stop Petrol and Diesel Car production. GM have pledged to end such from 2035 and I cannot find any commitment from Ford other than a ban in Europe from 2030 but the Market is a great leveller and I believe that market forces will make them rethink their strategy as manufacturers will have to increasingly heavily discount ICEs models and slow moving inventory to convince buyers worried about a huge drop in resale values so fewer buyers at much lower margins. IMHO simple economics will greatly hasten their switch to EVs.

regards

[sooty snipes] 02/7/2021 15:06

I couldn't agree more Rainmaker. This has been one of my better purchases hence why I have held and accumulated for so long. They have made all the right moves over the last five years. Don't forget the huge backlog of medical servicing that is now filtering through. Another big earner. Unless the story changes I'm happy to hold. Good luck Sooty

[miti 1000] 02/7/2021 14:19

Ford just announced their EV sales doubled in June.

[rainmaker] 01/7/2021 17:10

Hong Kong was closed today for a public holiday so to all Hong Kong Chinese, wishing you a happy "special administrative region establishment day!" Lol.

MrN, I'm a great believer in recognising the full potential of any given situation and then extracting optimal returns. I'm a 100% diehard Stockmarket Value Investor you know, "a good investment is a good speculation" since if a Company's shares are bought so very cheaply that the price can't go down then by the same token there must be good potential for price appreciation.

I really believe that the vast majority of Investors are blissfully unaware of the huge technological impact of electric vehicles on Companies like Volex- this is the biggest ever revolution in the global automotive industry or how quickly the speed of that technological change will be adopted and exactly where we are on the growth curve-we're on a lift on the third floor of a 100 storey building and % rate of new electric vehicles sold each year will have a dramatic acceleration.

To the 1 June Poster who made the valid point that the turnover of Volex's sales to EV manufacturers was some US $53.1mln, a modest £38mln so a relatively small part of Volex's overall business. However I firmly believe that you have to put that in the right context, that such sales increase 193% in the year to 4 April 2021 despite a Covid affected poor first quarter 2021 so even ignoring an accelerating market share growth in new EV, at the same rate sales will increase to US $155.58mln in the year to 4/4/2022, US $455mln in 2023, US $1,355mln in 2024

DYOR, AIMHO

regards

[mrnumpty] 01/7/2021 11:32

Ymaheru and rainmaker . I agree about churning of shares and selling too soon . I’ve done it in the past and generally lived to regret it , but I’ve learnt to be patient . Two of my shares suffered falls , with Kape drifting down to £ 1.50 last autumn , and then an IPO was announced ( enabling the big boys to buy cheap after PIs had panic sold ) . Fortunately I bore with the misery , and Kape is now £ 3.00 . More recently , Tremor suffered a mauling when it listed on the NYSE , but I felt that there had been no substantive change in the company , and the shares are now recovering . As the editor of Small Company Share Watch wrote in the latest edition , “ I have learnt four things : the biggest money is made in the sitting , not in the trading ; it is important not to force trades and try not to trade every day of the year ; I much prefer the story [ of companies held in the magazine’s Growth Portfolio 3 ] to unfold rather than churn ; be humble - you can be wrong on a single share ( like Patisserie Valerie [ the editor has the humility to acknowledge that this was a failure , but that was , I believe due to accounting fraud ] ) , so always have a spread of shares “ . Good luck all .

[rainmaker] 01/7/2021 02:32

Hahahaha, humans are strange,they're too active for their own good and they equate taking action ie buying or selling as work and doing nothing equals not working?! Have to go just going to catch the HK opening.

regards

[ymaheru] 01/7/2021 02:05

Yes, I get a lot of that from people who do less research.

Tried to encourage a friend out of selling SDI for 98p at turn of year. It’s now over 200p 6 months later and going strong.
He’s also sold Volex at 338p :(

[rainmaker] 01/7/2021 01:58

Thanks Ymaheru,I think that Investors are looking at a 10 fold increase in the share price and thinking it can't go any higher rather than studying the underlying performance of the Company and the growth prospects for its markets.

regards

[ymaheru] 01/7/2021 01:51

Rainmaker, I totally agree. Nice post.

It’s not just that they’re in that EV growth market, but they are also continually executing well in their older markets, increasing gross margins and making good acquisitions.

Most similarly successful companies are trading at far higher ratios. I’ve seen two similar companies treble in last year after a period of below market ratios, so your bottom line is bang on. Buy and hold. At some point, you’ll be very much rewarded.

[rainmaker] 01/7/2021 01:43

Hi Sooty, that was definitely one of the reasons I bought into Volex slightly over 5 years ago. Investors overwhelmingly don't give the Rothschilds credit for having any business acumen when they have it in abundance.Against a background of a very low price to sales ratio, another was a shift in the Company's strategy to more value added complex electrical engineering projects where they could us their technical expertise to greater advantage. Its going to be very interesting to watch the share price over the coming years-I'm not going to speculate but that won't stop others doing so and allowing me to be richly rewarded from it.I'm convinced that the share price will go substantially higher. I've seen other Companies with s strong market leading position in easily identifiable and widely recognised huge growth markets go from an earnings multiple of just five times to 750 times in just two years. Of course Volex will enjoy strong growth in earnings but I believe the vast majority of returns will come from a substantial upward rerating,


AIMHO, DYOR
regards

[ymaheru] 30/6/2021 18:35

Copper price not really an issue as Volex prices fluctuate alongside copper prices. They are insulated against it.

This pricing method has worked fine with customers for the last few years. Volex have expanded gross margins and profits.

I see lots of upside for Volex after the strong results (even backing out tax benefit EPS grew almost 100%!!) and the upbeat guidance, and of course De-Ka acquisition only contributed for 6 weeks, so this FY should be very strong.

[ali47fish] 30/6/2021 18:08

thanks to all those answering my question with each comment offering a different slant- i love it!

[descartes244238] 30/6/2021 17:10

Price fall predicated on the re-assertion today that the copper price is going to continue northwards which will impinge on Volex's manufacturing costs

[igoe104] 30/6/2021 13:19

Totally agree, Don't see the point being in and out the market pinching 10% etc. I'm going to hold for several years and make some really big bucks as the Electric cables market really takes off. If you can see the pathway all you need is patience.