Zytronic Share Discussion Threads

[she-ra] 18/2/2022 20:59

McBride had over £100 million net debt when they commenced a share buyback. It was woeful mismanagement.

Pugugly you appear with a very weak argument not having seen you around here.

The sour grapes of all these who have popped up that are desperately trying to scare investors is very interesting.

The facts are Zytronic trades below its NAV. It doesnt have any nasty lease liabilities, has £10 million in the bank, is profitable and operates in a market where analysts are forecasting exponential growth.

jw330 what did you expect Zytronic to do - make a bid for AU Optronics or something?

[jw330] 18/2/2022 18:31

yeah what I am saying is the situation is not as clear cut as some have described. I would have preferred if they were spending money growing market share at a profitable margin than to do buybacks but if the case is that there is no future growth to be had then I guess the board is doing the next best thing. The company is definitely isn't going bankrupt anytime soon but the question is, is it going to be the next two, five or ten bagger? Personally I struggle to see this.

[bones] 18/2/2022 17:57

They have £10M cash and are committing a maximum of c.£2.5M on a share buyback over the next 12 months. That doesn’t say they have no ideas on expansion.

The last final results talked of recovering business and they reinstated a dividend (small one).

The market cap is still worth less than their cash and land and buildings.

It doesn’t sound like a bear case to me.

[jw330] 18/2/2022 17:12

15% of outstanding shares is no pocket change. In my experience true price appreciation only happens when earnings goes up. Of course having less shares on the open market will help the situation but that is not really going to determine the long term outcome.

What the board is signalling here is that they think the money is best spent not expanding the business because they can't see any opportunities that will return higher. If earnings continue to drop then even buying back shares isn't going to help much.

[sturmey] 18/2/2022 13:00

Just taken the plunge. Mad or not? Another 13,500 shares.

Another plus point for ZYT is that it seems totally off-the-radar of the short-term punters. Not a mention of the buy-back announcement on the other web-site which has a small cap daily update.

Roll on the AGM and a positive trading update!

[bones] 18/2/2022 08:49

There couldn’t be a stronger signal from the company that they believe the shares to be undervaluing their assets and business. Why would the company want to buy the shares in the open market in size if it was aware of any problems in its business that might make the shares cheaper? This is surely the company saying that the business is undervalued.

YET, already some people are volunteering their shares into the big open arms of the appointed market maker at 151p.

Discuss.

[she-ra] 18/2/2022 00:02

The garbage I have read on here today from investors who were waiting for a cheaper entry point wrong footed by an announcement of a share buyback coming from a position of strength, i.e a robust balance sheet and a return to profitability.

Its interesting that these people who have never posted under these aliases on here before all suddenly appear expressing doubts about the positive impact a share buyback will have - why now? One even argues that a company with less than 10 million shares will hold no interest to most investors. Really? Investors go where they can make a profit. They are not led by a fixed number they just want to make a profit; like entrepreneurs who are motivated by profit. Another arguing this is company is niche and no other company would want to acquire a cash generative company in a (when not a pandemic) growth market and become a stronger vertically integrated operation.

And its now becoming fashionable to dump jam tomorrow (but we really know never) technology stocks (about time!) and to invest in jam today (i.e profitable) and tomorrow companies. You see Zytronic is in a bit of a sweet spot. Physical buttons are being retired for touchscreens even in lifts (yes Zytronic have touchscreen solutions for lifts also - check them out!) and for places in the world that want to cater for hypochondriacs they also offer a solution for them - hover touch screens.

So please either dry your eyes and move on or go back to your old aliases and have a logical debate - sour grapes looks like sour grapes.

BTW I hope to exit Zytronic between at 450-550p per share.

[sturmey] 17/2/2022 18:55

As a post-script to my earlier and in response to the post by value hound.

I first bought ZYT in 2013 at 203p. But, to my shame, I bought some at over 390p in late 2015/early 2016.

But I more than doubled my holding at under 100p in March, April and September 2020.

A "roller-coaster" of a share.

[sturmey] 17/2/2022 18:42

In response to she-ra

In the past, I didn't see the point of share buy-backs until I twigged. This is partly because my two largest holdings (Apple and Diageo) are aggressive users of share buy-backs. Take a look at their long-term share price charts

Put simply, the market cap (as velocyTongo points out) is the number of shares X share price.

Assuming that the value of the company (ie the market cap) is unchanged by the buy-back (a pretty decent assumption) then fewer shares means a higher share price. The market cap is essentially the value of the company so therefore should be not related to the number of shares in issue.

I am a long-term (and reasonably large) holder of ZYT. I think its a great little company and have had 2 factory tours. But it is a minnow. But that also means it can operate in a niche which would not attract big players. I would not be surprised to see it taken over. I am also a holder of Air Partner which is currently under offer (which I hope will be increased). The parallel with AIR is that both are out-of-favour undervalued UK small caps. VNET is another example (which I hold).

I was poised to top-up my holding in ZYT a few days ago but was quoted 153p on a large spread so I declined.

On a risk/potential reward ratio, ZYT is a steal at the current price. But not for "widows and orphans".

[value hound] 17/2/2022 18:25

Good stuff re buybacks and should see the share price move higher pretty quickly. But when I last looked, I decided it was worth £2.50 longer term, so I don't want to make my usual mistake of being too short-term.

Having looked at my trading history:

Highest price paid: 169.40p
Lowest price paid: 144.50p
Weighted average price paid: 160.61p

Not great!

[velocytongo] 17/2/2022 18:09

she at .. no of shares xs share price =s market capitalisation .. lots of investors don’t look at companies below a certain size

[c1d] 17/2/2022 17:28

Bones -agree re bombed out valuation of ZYT. It makes me wonder (a) how someone could be so desperate they were willing to sell at the recent lows of 130p/132p and (b) why given (a) they didn't approach the company to see if they would buy them out at around 145p (previous buyback price) seeing as ZYT didn't manage to buy back the max no of shares they were willing to this time last year? These things are a mystery to me!

[she-ra] 17/2/2022 17:15

Mr5k would you like to explain to us all how the share buyback will make this a smaller company?

[boonkoh] 17/2/2022 17:09

Why can't the company have waited until after market close or tomorrow 7am to announce this price moving announcement?Only benefitted day traders who spotted this at 4:10pm and make a quick buck before markets closed at 4:30!

[bones] 17/2/2022 17:04

C1d, people have been dumping at distressed prices across the board in small caps in the last two months or more. It’s endemic but there are some phenomenal bargains out there now. Zytronic is still only valued on its cash and buildings and there are plenty others like it who are still recovering profits after the Covid chasm.

[c1d] 17/2/2022 16:52

Once again someone dumped a large block of shares shortly before a buyback is announced! A better price than the 90p minus in the dark days of 2020 but still not the greatest decision.

[effortless cool] 17/2/2022 16:50

Yes, bones, shame they don't all work out like that!

[mr5k] 17/2/2022 16:38

Not such good news. This becomes an event smaller company!

[bones] 17/2/2022 16:27

Another share buyback. Always good to see the MMs caught short by a surprise RNS.

EC, looks like a well timed pick up the other day!

[richie32] 17/2/2022 16:25

Buyback! Great stuff. It's normally the other way around for AIM stocks.

Well done ZYT

[redalert] 17/2/2022 16:25

buyback announced

[karv1] 15/2/2022 23:29

I had this on my radar some time back it is starting to look interesting again.

[gleach23] 13/2/2022 22:59

I've continued to accumulate, juggling between trying to pace it and taking advantage of the unexpected dip below 140p.

It didn't seem unreasonable that the Bid touched 200p in the days following the October Trading Update, since when we've had outlook comments from the Chairman in the December Finals of -

"The first two months of the year have seen an improvement in order intake, and with the improved margins and levels of demand across most sectors, this provides the basis for good progress in the coming year."

...plus a quiet reiteration of this in the recent RNS about the addition resolution for the AGM concerning the dividend.

One would hope that if there hasn't been a spring back by the time of the AGM then the chances of an accompanying trading statement are increased.

[bones] 13/2/2022 21:08

I’m convinced that investors (not just PI’s) are indiscriminately selling illiquid shares. That’s what I attribute these distressed sales to as a phenomenon. The macro and geopolitical situations are bearish for many so it’s unsurprising.

For me, Friday had a climactic feel to it. 80 trades and big volume in ZYT with the share valued below cash plus buildings. Could be a bottom here and a big spring back.