Xp Power Share Discussion Threads

[courant] 14/9/2012 10:56

Lol, Lightsquared is an interesting story, hadn't seen that before, thanks!

[losos] 13/9/2012 16:58

Courant - "I think finance people trying to understand engineering is an excellent example of a source of mis-valuation!"

You need look no further than the Lightsquared fiasco in America to see the truth of your statement, in summary, a wealthy ex hedge fund manager with no engineering qualifications thought he could make a killing in mobile communications, the words 'frequency interferance' have never entered his brain and wonder of wonders, after investing billions he finds that the FCC won't allow his company to proceede because they are interfering with sat nav systems and even worse with some military systems!!!!

Any radio comms engineer could have told him that but as you say finance people often completely ignore physics and think they can 'engineer' a solution for anything, just like they used to do in finance world!!!

[flagon] 13/9/2012 10:47

Lots of steady buying today as we approach the IMS early next month.

[flagon] 12/9/2012 16:39

You weren't the only one PHILO - Aberdeen Asset Managers just topped up their holding by 20,700 shares.

Link ->http://www.investegate.co.uk/article.aspx?id=20120912162746P0CA1&fe=1&utm_source=FE%20Investegate%20Alerts&utm_medium=Email&utm_content=Announcement%20Alert%20Mail&utm_campaign=XP%20Power%20Ltd%20Alert

I bought VLX same as you a few days ago as well.

Flagon

[philo124] 12/9/2012 10:16

Bought XPP, VLX, TTG this am fwiw.

[daz] 07/9/2012 21:39

The large trades at the beginning of the day do suggest that the loose stock that was around has been placed and there was decent interest for the rest of the day, so I think there is a good chance that the shares have turned the corner.

News of a reiteration of the positive order book and progress on the profitability of the Vietnam factory ought to boost the shares

[madmix] 07/9/2012 10:29

Bought back in this morning.

Yielding just under 5%, and recent outlook statement was positive for H2.

[plughole] 28/8/2012 20:27

1025 to sell, 1084 to buy most of the day. Then near the end the sell price closed the gap quite suddenly. Looks to me as though they're trying to frighten us into selling (with some succes).

[thorpematt] 14/8/2012 14:39

Free cash flow needs to be read in conjuction with CAP-EX. Debt also needs to be read in conjuction with CAP-EX.

Cap-ex is what provides those wide margins and those barriers to entrance thus sustaining those.

Fairly fundamental stufff really. Not sure that comparison to Apple is relevant other than the similar numbers. Certainly not compare apples with er apples....

[owenski] 14/8/2012 13:37

The other aspect to the blog, all other considerations put aside is shorting XPP, generally with shorting, one looks for an unsustainable overvaluation by whatever means tha occurs. XPP with its supportive div is definitely not in that camp. I'm always amazed when some folk short stuff....stuff thats working and not over valued. There was some punter trying to short FENR recently, I thought he was a madman......... and now probably a poor madman.

[courant] 14/8/2012 10:53

owenski,

A good reply! I'm actually in the process of penning a reply to the blog too, because running through the points he made was a useful exercise in checking facts vs my understanding vs someone else's opinion, especially given "someone else" is a serious investor who has gone short! In summary, I think he completely misunderstands the business (e.g. some of the points you made above, along with others, e.g. R&D spend in a company like this with a consultancy/bespoke-design operation is understated in the accounts, because the knowledge acquired through R&D can also be acquired/billed through consultancy work, also the comment he makes "Moreover the equipment the customers make (hospital stuff, computers) is more complicated than the DC transformer - so they are asking us to believe that they get high lock-in margins on simple equipment from customers who make more sophisticated equipment." is way off the mark in so many ways!).

Two other points. First, I've started checking out the competition (Cosel, Power One, among others) and picture with margins is not too dissimilar, which suggests there's not some fraud going on! OK, the debate about how long high gross margins may continue is an interesting one and one that is more subjective.

Further, as an engineer, I find it interesting how people with a finance background can fail to understand the engineering process and the key commercial drivers that exist when designing and selling technical products/services. I read David Einhorn's excellent book last year and was struck by his comment that his investment process starts with asking why a valuation anomaly might exist: in the absence of a good reason, he moves on; with a working hypothesis, he goes on to see whether that is indeed true. I think finance people trying to understand engineering is an excellent example of a source of mis-valuation!

[fardistanthills] 14/8/2012 10:45

Sums up well why I have a deal of respect for this company - thanks J & O

[jonals] 13/8/2012 22:55

There is an interesting blogpost and discussion (bearish) on this on Bronte Capital.

[nellie1973] 30/7/2012 11:58

Nice update, back in on positive momentum.Good article from FT.

[the juggler] 30/7/2012 08:35

With the price rising this morning it would certainly appear that the FT article has had a positive impact. Long may it last!

[penpont] 29/7/2012 21:53

Thanks for that Jr - Schwartz has a big following and his views are quite influential.

[johnroger] 29/7/2012 20:17

The Financial Times´s David Schwartz has just bought shares in XP Power, a designer and manufacturer of power converters. These are devices that allow electronic equipment to operate efficiently. XP Power shares were in the 1,600-2,000p range during the first half of 2011; but investors ran for cover after the level of new orders began to slip in mid-year. The slowdown eventually caused lower profits in the first half of 2012. But the company's order rate is now spiking higher. So Schwartz expects second-half results to be much higher than last year's figures. Even better, XP Power is quite optimistic about its future. It recently launched 10 product lines. It brags about its strong design win record in the current year. The share of revenues derived from products manufactured internally is rising. These are more profitable than those manufactured externally. Its new factory in Vietnam has just come on stream, which will also help to increase margins. The dividend has just increased and now approaches 5%. "I was impressed by the 8% gain last Monday when first-half results were released. Recall that the FTSE 100 fell 118 points on the day. I expect substantial gains in the weeks ahead," he writes.

[owenski] 24/7/2012 07:16

£110,000 director purchase, not a 10k token purchase, speaks volumes imo, agree about the 'program and design' wins, outlook is positive.

[penpont] 23/7/2012 16:11

Very firm on such a bad day in the markets, helped no doubt by director buy at over £10.

[fardistanthills] 23/7/2012 08:43

Everything seems pretty much in-line with the weakness reported in their update earlier this month and fairly positive for the future?

"Second half revenues and earnings expected to be substantially higher than those achieved in the first half of the current year"

What has been intriguing me for some while is the ultimate impact of bringing manufacturing in-house, and the investments they are making in product innovation and design. Whilst this has all been well flagged over the last year or two, all we have had about the feed through to revenues is their commentary on "bookings" - most recently down a bit.

Are we now getting hints of something a bit more beefy in their forward statements:

"New product introductions and the development of an industry leading in-house manufacturing capability have generated MULTIPLE PROGRAM WINS to drive future growth and market share gains.

And these from the Chairman's Statement

"we achieved another strong DESIGN WIN performance during the period" --- "expanding our available market" --- "the number of new product families introduced over the last three years is yet to have a significant impact on our revenues, given the time lag from launch to production." --- "We launched 10 new product families in the first half of 2012" --- "Larger customers are keen to reduce the number of vendors they deal with and XP Power's broad product offering, excellent global engineering support, in-house manufacturing capability and environmental credentials make us an ideal candidate as a preferred supplier" --- "At present, approximately one quarter of our total revenues are manufactured in-house. This figure will increase significantly as the proportion of own-design business continues to increase and the transfer of the older own-design products from third party to in-house manufacture is completed during 2012." --- "While industrial electronics markets remain subdued at present, we continue to believe that our greater penetration of a Blue Chip customer base and significant DESIGN WIN success bode well for the future of XP"

PROGRAM WINS and DESIGN WINS sound more substantial than talk about BOOKINGS!

Good to see Asia up by 8% - this is where I would hope they achieve some strong growth. And of course the dividend is still rising nicely.

[bsharman3] 09/7/2012 09:45

It's quite annoying that someone is leaking the news before the announcement.

[owenski] 09/7/2012 08:26

bought a handful, was expecting a bad TU, bearing in mind the recent share price fall, but it seems unwarranted.