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XP Power Share Discussion Threads
Showing 2151 to 2175 of 2175 messages
|Reasoning behind expanding the Vietnam plant whilst only currently 50% utilized starting to become apparent.|
|Very interesting update indeed.
The recent discussion here based around the principles of value and growth become rather relevant too. Because with outlook and growth as reported this morning, we have the analysts scrabbling for their calculators.
Where before, many were giving this "nice" multiples applicable for a "soild, quality" company, now we have the re-calculations to be made based upon a solid, quality company / GROWTH stock (with global reach). Whole different ball game.|
|Absolutely bought some more this AM. I think a day like today would be the classic entry point.|
|nice to have you here brucey there's a lot left in the tank here yet imv.
As John Murphy would say you can spend all your time doing FA (fundamental anlysis) or you can read the chart TA (technical analysis) Fundamentals are important but when the price moves move with it.
|Woody bought in yesterday based on my nascent Minervini stock screen, pleased it's working, at least in this case.|
|great TS and nice share price reaction. Typical Minervini stock
|Strong growth, quality company.|
|Another excellent trading statement, XPP continues to deliver.|
|Agree a lovely holding. One of those you can just let it get on all by itself!|
|Unfortunately only managed to get in at £1.40 in Feb 2009 when the PE was about 4!
Must try harder!|
|yep agreed Thorp we've both been here a while but for those who bought in 2009 at just above £1.20 it's been a very profitable investment. Any share performance like that has to have truly exceptional quality business management and my feelings are we've got that in spades.
|Yes a very nice breakout on the chart here.
Much of XPPs story of the last few years has been about building.
Building a new factory, building an enhanced % own-product offering, building its global reach, building much closer relationships with OEMs (and the repeat business that comes with it).
It's done all these things with NO dilution of shares and a REDUCTION in debt whilst enhancing its dividend payout.
It now finds itself in a very strong position for further expansion at low cost. It is of course not the largest company of its type and is therefore likely one day to be aquired. Most of us LTH (and I am certainly nothing like the longest on this thread) will mourn that day. Because the truth is, this is one of those very few stocks that get anywhere close to being one of those mythical Buffet-types where you truly would be happy to hold forever.|
|For those of us who held through the trend of 2012 to 2104, kept a core holding and traded the stock bewteen 2014 and 2016 buying the lows at £14 and selling the peaks at £17/£18 then buying again at the breakout it's been very rewarding.
Sometimes you have to put the fundamentals aside and trade the chart
|In five years the share price has gone from roughly £8 to £22 providing a annual yield of between 4% and 5% with a historic per of between 12 and 16. A pretty safe stock as alluded to here by many investors
|"I can't think of another stock which can provide the yield and capital growth that XPP has over the recent past and at a valuation which hasn't looked stretched."
Could you please put some meat on this bone , i.e. some numbers?|
|I would think much of this discrepancy is currency related
"Approximately 75% of our revenues are denominated in US Dollars and the translation of these revenues into Sterling for reporting purposes has had a beneficial effect. However, the majority of our cost of sales and a large proportion of our operating expenses are also denominated in US Dollars. While a stronger US Dollar helps our overall gross margin in absolute terms (albeit to a limited degree) it also has the effect of reducing the gross margin percentage as costs rise disproportionately to the revenues. We estimate that our reported 2016 gross margin percentage could be approximately 130 basis points lower as a result.
For our United Kingdom business invoiced in Sterling, which represents approximately 13% of our worldwide revenues, margins were reduced in the second half of 2016 as the associated product cost is denominated in US Dollars. We have therefore been raising prices as customers place new orders to compensate for this effect. Although no customer is ever happy with a price increase, our reasons for doing so are well understood. We therefore expect to recover a significant portion of our margin losses in the United Kingdom in 2017."
From what i can see this impacted the gross margin by 2%.
There was a 4% increase in marketing and distribution relative to the percentage increase in revenue too.
The administration costs are very small only £1.5m, although the distribution and marketing costs are significant at £26m so a fair proportion of the operational gearing of the business is driven by the COS, as explained in the currency fluctuations. Operating profits are pretty much driven by the gross margin percentage less the distribution and marketing costs, which are variable.
I can't think of another stock which can provide the yield and capital growth that XPP has over the recent past and at a valuation which hasn't looked stretched.
I'd take a company everyday of the week that has low overheads over high overheads, the impact on operational gearing in the event of a revenue down turn is far preferable. Everyone's investment strategy is different.
|I was attracted to review this stock because of its strong fundamentals. However after analysing it, I won't be investing. Here is why.
As the discussion above has alluded to, XPP shows all the signs of a company with a moat and a competitive advantage. ROCE 25%, operating margin 22%, Operational Cash Conversion 100%, debt free.
These are all the signs of a company in a strong competitive position.
But I am puzzled as to why it cannot translate this into strong earnings growth. FY2016 shows good revenue growth 18% but a poor earnings growth 11%. More puzzling to me is broker forecasts. For FY2017 rev growth of 9% and eps growth of 8%. These are pedestrian numbers for a company which appears to be in a strong competitive position. Maybe the moat is not sustainable, and competitors have started to eat their lunch?
I think if I were looking for a steady middle of the road , safe company to balance my portfolio, I would very likely invest. However that is not my current framework, so reluctantly I am going to pass.|
|I've been a long term holder for years and it seems clear to me that XPP's profit and ROCE success has been gained by the steady move from providing a distributed product set to a purpose design built embedded product set sold as a complete service to OEM's, unless I'm missing something.
I would guess that most of the end user OEM's need a power supply which is mission critical to coin a phrase. In essence it must be 100% reliable and be guarenteed to work. further more i would hazard a guess that the OEM's are working with XPP through their direct sales source to provide such a product set. That's what they are paying for imv.
In essence it's customer relationship management which you can't readily achieve if your selling your products through a distribution network.
topped up again on the break out
|New all time highs today|
|Yes agree Phil Oakley just raises the question in his article - he basically summarises how I feel about XPP. I am an investor in XPP on the basis of its track record but am reluctant to increase my position. I haven't really understood why it has a durable competitive advantage. It clearly must have some valuable expertise but I worry it seems like the kind of product where high quality could be replicated easily in time and where price will become a more and more important factor in choosing supplier as technology improves. I think the competitive barrier suggested by Courant isn't really a long term competitive barrier more just a factor that means revenue visibility is greater i.e. it is not relevant to competition to supply power converters for new devices(presumably this is where competition happens and how growth is achieved in the longer term). I'm probably missing something but not sure what?|
It is hard to find companies with consistent returns on capital with historic and expected growth on attractive valuations without worrying yourself out of buying the share because you think high returns ought to be competed away.
Such a consistent high return growth company will of necessity have developed with business characteristics that by their nature are not likely to disappear overnight.
By all means ask yourself the question, as he does "The key question is: why haven't these margins been competed away? What is the company doing that its competitors cannot match?" but you need to dig a bit deeper than he does to get the answers.|
|"My main concern with this business would be the sustainability of its high profit margins and ROCE. The track record and stability of both measures gives some degree of comfort but XP Power is operating in an industry which can change quickly due to changes in technology."
Phil misses the point that in regulated markets (e.g. healthcare) once the XPP product has been baked in, it's there for some years going forward. There's a natural competitive barrier there.|
|Good Phil Oakley article
|Hargreaves Hale above 10%|
|Research note from Edison