Volex Share Discussion Threads

[ayl30] 25/1/2023 09:18

Look at L&G prefs for divi

[dope007] 25/1/2023 09:17

I'm 3-4 years away from hopefully retirement so some high yielding prefs and decent financials are a part of my plan. As are recovery plays in growing sectors such as defence and oil/gas. I look to reinvest all dividends and diversify further each year.

Volex is clearly a good company and on my watch list hence I'm here but the stock perfromance isn't great at the moment and I hope it drops to the lower 200's. If it does I'll probably add them to my ISA.

[disc0dave45] 24/1/2023 17:15

Dope,Thanks, but from the two I've quickly looked at I don't see even sustainable earnings let alone any growth (agree with Dr B).Wish you good luck but tbh you haven't really supported why VLX isn't cheap IMO, particularly when compared to other investments you hold which actually contradict what you said, but hey yiur money your choice.

[dr biotech] 24/1/2023 16:56

I wouldn't describe any of those as "growth" stocks. Mostly just mature financials which may give a decent dividend but I doubt you'll see big capital gains. I've seen MNG tipped for a takeover multiple times, but as people move away from funds into trackers I don't see an exciting future for them. Of course your aims/needs are probably different to mine (we all want to make money of course). My portfolio yielded about 2.5% last year (and unfortunately dropped about 15%)

If a company is ex growth of course the PE will be lower - given the performance here I think 14-16 is reasonable.

[disc0dave45] 24/1/2023 16:09

Just had a quick look at your BAB too.....good luck with that one as well, you'll chuffing need it.Some stocks are on a PE of 8 for a reason!.

[disc0dave45] 24/1/2023 16:01

Doesn't really tally with your NEX holding though. PE10, Rev CAGR avg only +0.7%, eps CAGR avg -36%, circa £1bn of debt with only a forecast profit of £86m, that's some level of debt!.I'm assuming you hold NEX, possibly a punt?, but VLX is expensive!.Each to their own I guess.

[dope007] 24/1/2023 15:41

Cheap for me is a PE of 8 on sustainable earnings. Average is PE of 11/12 on sustainable earnings. I also look for reasonable income so these are average on the forward multiple with a low yield. So for me would need to be cheaper to invest

[disc0dave45] 24/1/2023 15:08

DopeEarnings are forecast to be around what they were in 2021 when the share price averaged about 345p. It's on a foreword PE of 11 which is on a par with its lowest rating over the past 6 years or so. Appreciate macros are gloomy but a rating of 15x seems very reasonable to me, particularly as it's achieved +15% CAGR over the last 6-7 years.Be more useful if could expand on why you think its not cheap.

[dougmachin] 23/1/2023 13:29

Tesla results on Thursday might have an impact here.

[dope007] 20/1/2023 08:58

PE 11 and yield 1.7% is not cheap to me. The rest of the sector is clearly expensive. These look fairly priced to me

[pugugly] 20/1/2023 08:51

I think Canaccord.

[gargoyle2] 20/1/2023 08:48

Thanks. Whose note is that?

[ijamlon] 20/1/2023 07:31

Shares look good value on a CY23E P/E of 11xBased on our forecasts (which are unchanged) Volex trades on a calendarised P/E of 11x for 2023E with EV/EBITDA at 7x. This offers a significant discount to the sector average P/E of 19x and EV/EBITDA of 11x. We believe this largely reflects investor concerns regarding the group's material exposure to cyclical Consumer Electronics markets. In our view, this looks increasingly unjustified given recent outperformance is driven by a combination of price and volume within resilient categories as new customer projects come into mass production. Meanwhile, the group's diverse exposure across structural growth markets such as EV, Medical, and Industrial Technology (including high-speed) remains attractive in our view. The dividend yield is 1.7% and FCF yield is 7.2%. We reiterate our BUY rating and 380p target price which on CY23E estimates currently price in a 10% discount to sector average.

[ijamlon] 20/1/2023 07:30

On Wednesday, Volex hosted an analyst site visit at its DE-KA facility near Istanbul in Turkey which specialises in the production of power cords for the European white goods market. As well as a factory tour, the visit offered the opportunity to meet with DE-KA senior management and Girish Gopinpath who is COO for Asia with global responsibility for Volex's Consumer Electronics business which, in 2023E, we estimate will generate c.40% of group sales. DE-KA, which was acquired in February 2021 for up to c.€62m, looks to have been an excellent acquisition for Volex, exceeding stretching EBITDA earn-out targets for Years 1-2 and is on track for Year 3. It has added major OEM customers and immediate scale in Europe to complement an Asian and North American Consumer Electronics footprint that would have taken years to build organically. A standardised product range and vertically integrated, highly automated manufacturing facility allows DE-KA to deliver a strong margin profile which is accretive to mix. The acquisition has also provided technical experience and procurement savings that are benefiting the wider Consumer Electronics division, helping to position it as a cost competitive, high quality producer of power products. Despite a well-flagged slow-down across Consumer Electronics end-markets, the group is taking share through price, product quality and by helping customers to navigate supply chain challenges with its unique global footprint supporting onshoring opportunities. Looking forward, Volex sees an emerging opportunity to scale its wire harness offering for white goods (a larger TAM than power cords) with OEMs increasingly frustrated by the competitive supply chain. The opportunity will take time to build, likely requiring new model design-in, but new business is already being won which should start to come on stream from 2024

[shaker45] 19/1/2023 14:56

Being unwilling to sell at a loss is a handicap. It's not about profit or loss on an individual share but whether, today, you can see better opportunities to reinvest elsewhere- or you think it might go lower, in which case cash is preferable. Like many other companies, this one is struggling in this post covid, Russian warmongering economic environment and I would definitely sell if I thought is was festering, malignant.

[zho] 19/1/2023 14:53

>>I don't have the longer term broker forecast from a few years ago ...>>

This is from the December 2019 issue of SCSW:

"Whitman Howard forecasts a pretax profit of US$29.7m/eps 14.3 cents for the year to end March [2020] with US$34.2m/16.5 cents and US$38.3m/18.4 cents over the following two years."

[dr biotech] 19/1/2023 14:44

The share price performance here over the last year has been disappointing. In 2021 it centered roughly around 350p, 2022 it was about 250p. The performance of the company itself though has looked decent. I don't have the longer term broker forecast from a few years ago so I'm not sure if these have been lowered, but if they have I feel its more to do with external factors than anything the company or management has done here.

If you think the company is heading in the wrong direction then sell. NR owns too much of the company for him to be ousted, and I doubt he's going to buy anymore in large quantities given his large holding. Personally I think they are doing OK. Perhaps the debt in the last set of figures looked a bit concerning. However I was also concerned about that with Luceco and their figures this morning show how quickly that can be turned around if the increase in debt was largely to avoid supply line issues that have since eased. Not saying thats going to happen here, but Luceco shares have popped today when they showed things aren't perhaps as bad as people thought.

FWIW I'm not expecting any sort of trading update until April, so it could be languishing at these levels for a while.

[wanttowin] 19/1/2023 14:04

Hi Shaker,
Been waiting for some sort of recovery near 300p, not in the habit of selling at a loss and don't intend to start now. How would you describe this one ?

[shaker45] 19/1/2023 12:27

If it's a truly festering malignant stock why are you still in? Knowing what you know now, if you wouldn't buy it, surely it's a sell? For you at least

[wanttowin] 19/1/2023 10:07

Hard to fathom what is going on here, a truly festering malignant stock..

My patience is running thin with this one..

[valhamos] 18/1/2023 21:12

The main takeaway from the presentation is that the DEKA acquisition 2 years ago has been a tremendous success for the Consumer Electricals segment - hence the analyst visit to the Turkish factory.

[l0ngterm] 18/1/2023 20:29

Yeah I had a read through, seemed generic. Like you said fluctuations in pricing is a pass through. My hopes here are, it may not be exciting products but a steady growing company. Gla

[dr biotech] 18/1/2023 18:02

Not a lot of new stuff in the presentation (which was stated beforehand). Contract prices reviewed every quarter and copper price is also accounted for. EVs didn't get a look in, big emphasis on diversified customer base.