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Looks like the Capital Markets Day went rather well :o)) Edison have produced a new research note today, suggesting that at 412p DSCV are at a 14% discount to its peer group: Http://www.edisoninvestmentresearch.com/research/report/discoverie-group506675/preview/# "At the recent Capital Markets Day, discoverIE management confirmed the company�s strategy to grow the business through a combination of organic growth, and acquisition of design and manufacturing businesses. The integration process is designed to retain the entrepreneurial spirit of acquired businesses while taking advantage of the group balance sheet and central functions, to drive good organic growth post acquisition. Management aims to provide investors with a progressive dividend and a return of 15-20% pa." "Valuation: Still trading at a discount The stock is trading on an FY19e P/E of 16.4x, at a c 14% discount to the peer group average. Continued growth in the proportion of revenue generated from design and manufacturing should support operating margin expansion, and should help to reduce the valuation discount. The stock is also supported by a dividend yield of more than 2%."
Why the late surge today? Anyone know? It�s broken though �4 today good and proper!
Good to see DSCV spreading the word with a Capital Markets Day this afternoon: Https://www.investegate.co.uk/discoverie-group-plc--dscv-/rns/notice-of-capital-markets-day/201803150700027560H/ "The event will include a series of presentations by executive and operational management to give greater insight into the Group as well as product demonstrations to showcase discoverIE's innovative electronics. No new material trading information will be disclosed. A trading update for the year ending 31 March 2018 will be published on 19 April 2018."
Peel Hunt today reiterate their Buy and 470p target price: Http://investing.thisismoney.co.uk/broker-views/
Director buying just reported - good to see an NED buying �30,000's worth at 380p: Https://www.investegate.co.uk/discoverie-group-plc--dscv-/rns/director-pdmr-shareholding/201803051026316811G/
Berenberg have reiterated their Buy and 475p target: Https://finnewsdaily.com/discoverie-group-londscv-berenberg-bank-reconfirms-buy-rating-today-has-a-target-of-gbx-475-00-share/
FYI here's Finncap's investment summary from the recent note which lifted their target price to 456p: "Successfully targeting structural growth markets CORP discoverIE announced last week it had strengthened its position in the renewable energy and transportation end markets with the acquisition of Santon, a designer and manufacturer of differentiated, patented direct current switches. An initial �22.8m cash and �0.9m shares has been paid with contingent consideration of up to �19.9m subject to growth targets. We have upgraded our FY 2019 EPS by 8% and our target price to 456p bringing our target P/E in line with peers. Differentiated and growing. discoverIE�s strategy is to build a highly differentiated, international electronics design and manufacturing group. Santon increases the group�s exposure to the structural growth in renewable energy and transportation, increases international sales (Group sales into Asia will rise from 8% to 13%) and builds on the positions in niche components for solar power and wind power. Investing for growth. Santon has been investing in automation and discoverIE will reimburse the vendor �2.2m for this and invest a further �2.2m to provide additional capacity for growth. Santon operating margins were 13.0% in 2016 and we expect an enhancement from both continued growth and the investment programme. Net debt/EBITDA within target range. At March 2018, using a full year proforma for Santon, we forecast net debt EBITDA of 1.7x, falling to 1.4x over the next two years comfortably within management�s target range of 1.5-2.0x. EPS upgraded 8%. As shown on p3 we have upgraded our FY 2019E EPS by 8% and 2020E by 7%. We have assumed �4m of earn-out is paid in each of these years for Santon. Target price raised to 456p (previously 405p). With discoverIE continuing to prove its strategy we have valued the shares on a par with peers Diploma, Laird, Trifast and XP Power (see table p3). We also highlight the recent appointment of Bruce Thompson, soon to retire as CEO of Diploma, as a Non-Executive."
Nice - Finncap have today increased their price target to 456p (from 405p): Http://investing.thisismoney.co.uk/broker-views/
DSCV should bounce nicely along with the markets. Edison have issued a new note and have increased forecasts for the coming year by 9% to 24.6p EPS: Http://www.edisoninvestmentresearch.com/research/report/discoverie-group553367/preview/ "Valuation: Still trading at a discount On our revised forecasts, the stock is trading on an FY19e P/E of 15.3x, at a c 23% discount to the peer group average. Continued growth in the proportion of revenue generated from design and manufacturing should support operating margin expansion, and should help to reduce the valuation discount. The stock is also supported by a dividend yield of more than 2%."
Numis raise forecasts, and target price to 455p.... http ://www.proactiveinvestors.co.uk/companies/news/191066/numis-ups-target-price-for-discoverie-after-raising-estimates-following-recent-dutch-acquisition-191066.html "Numis ups target price for DiscoverIE after raising estimates following recent Dutch acquisition 11:13 02 Feb 2018 The City broker�s analysts upgraded their full-year 2019-2020 earnings per share forecasts for DiscoverIE by 7-8%, leading them to increase their share price target to 455p Numis Securities has upped its target price for DiscoverIE Group PLC (LON:DSCV) after raising estimates following the recent news of the �23.7mln acquisition of Santon, a designer and manufacturer of patented direct current switches. In a note to clients, Numis�s analysts said: �We view this as an attractive acquisition, significantly enhancing the Group's exposure to the structurally growing renewables (particularly solar) market, as well as boosting geographic diversification (particularly Asia).� The City broker�s analysts upgraded their full-year 2019-2020 earnings per share forecasts for the customised electronics supplier � formerly known as Acal PLC - by 7-8%, leading them to increase their share price target to 455p. With the shares currently trading at 395p each, the Numis analysts reiterated an �add� recommendation on DiscoverIE. They concluded: �The shares now trade on a FY19E PE of 14.8x and EV/EBITA of 10.9x, which we view as undemanding given the cyclical and structural tailwinds to which DiscoverIE is exposed.�
Nice sizeable acquisition today, earnings-enhancing for the coming year. And in high-margin D&M, plus in the growing renewables and transportation sectors. Good to see the founder staying with the business too: Http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/DSCV/13517244.html "Nick Jefferies, Group Chief Executive of discoverIE plc, said: "The acquisition of Santon continues our strategy of growing discoverIE into a highly differentiated, international electronics design and manufacturing group. With a long-established track record of producing high quality DC switches, Santon builds our position in niche components for solar power, a market that is set to grow significantly, and will create new opportunities in our other target markets such as transportation and medical."
What an excellent Q3 trading update - trading continued "strongly", sales up 13%, orders up 4%, margins improving..... Http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/DSCV/13515338.html Plus a strong hint of action to come: "In line with its strategy to grow its higher margin Design & Manufacturing division, the Group has several acquisition opportunities in the pipeline and has debt funding resources available."
Peel Hunt reiterated their Buy and 450p target: Https://weekherald.com/2018/01/26/discoverie-groups-dscv-buy-rating-reiterated-at-peel-hunt.html I also thought this week's NED appointment was really significant - an excellent and prestigious appointment which should bring in lots of contacts and experience: Http://www.lse.co.uk/AllNews.asp?code=hvxsa8nl&headline=discoverIE_Appoints_Outgoing_Diploma_CEO_As_NonExecutive_Director "discoverIE Appoints Outgoing Diploma CEO As Non-Executive Director Tue, 23rd Jan 2018 14:01 LONDON (Alliance News) - Customised electronics firm discoverIE Group PLC announced on Tuesday the appointment of soon-to-retire Diploma PLC Chief Executive Bruce Thompson as non-executive director. Thompson is leaving FTSE 250-listed Diploma after 21 years at the helm, and will join discoverIE on February 26. In September 2017, Diploma said Thompson would be leaving the firm by the following September. Chairman Malcolm Diamond said: "We are delighted to welcome Bruce to discoverIE where his wealth of experience and impressive track record of building a high quality international business will be of great value as we grow discoverIE into a global electronics business."
The rather successful Amati UK Smaller Companies VCT have today issued their December 2017 newsletter. In it they note that they're now taken an initial position in DSCV. Which is nice.... Http://amatiglobal.com/documents/TB_Amati_UK_Smaller_Companies_Fund_Factsheet_B_Acc_Dec_2017.pdf "We added a position in DiscoverIE Group (formerly Acal), a manufacturer and distributor of electronic components. DiscoverIE is reporting a strong order book, driven by design wins including electronic vehicle charging components and medical equipment."
More new highs today. DSCV are presenting for free to investors on 25th January. I doubt I'll be able to attend this one, so hopefully someone else can report back. Here's a link: Http://www.proactiveinvestors.co.uk/register/event_details/125
And now DSCV have won an award - best small/mid-cap company of the year at these quoted company awards: Http://www.broadwalkam.com/awards.php#small17 Small & mid-cap company of the year [top] discoverIE (formerly Acal) Under CEO Nick Jefferies since 2009, discoverIE�s strategy has been to create a high margin differentiated business through organic and acquisition led growth. This strategy has delivered with sales doubling in the last four years. discoverIE, a leading designer, manufacturer and supplier of customised industrial electronics products and solutions, has focused on niche areas and also in the design to delivery processes. Cross selling opportunities has been a key factor in the acquisition strategy. The acquisition of UK based Variohm Holdings for �14m in January added a highly complementary business. Though the majority of revenues are in Europe, the company has been growing its presence in US and Asia, with the aim to become an international leader in customised electronics. The latest results showed 9% organic growth, and EPS up 24%."
DSCV are tipped here as a stock for 2018: Http://www.moneyobserver.com/our-analysis/uk-share-tips-adventurous-investors-2018?utm_source=Newsletter2018-01-04&utm_medium=Email&utm_campaign=ContentPromotion "Higher margins and a shift in focus to design and manufacturing inspired Acal to change its name to DiscoverIE Group � discover innovative electronics. But it�s not a funky new name that will decide the electronics distributor�s fate. Adjusted earnings grew by 24 per cent in the first half, on organic sales up 9 per cent; the firm has a record order book; and growth is underpinned by new project design wins. Look for a 20 per cent increase in 2018 profit and double-digit growth thereafter. A big valuation discount, compared with peers, should narrow."
Thanks. Pint still owing.
Qd22, no, target prices don't have a standard timeframe, it's generally as the analyst sees the present value at the time, though sometimes I've seen them as 12-month targets. New highs now. This share is up almost 50% in the seven or so months since I bought in - which proves once again that the quietest threads are often the best :o)) There's still mucho upside here imo as: (1) DSCV trades at a large discount to its sector and peers but is now rerating (2) it's about time for a new acquisition or two, (3) the pound is weak, which benefits DSCV's competitiveness and overseas revenues converted into sterling, and (4) the general economic situation is stable/improving which obviously helps demand.
Do target prices have a standard timeframe? eg a year? Or do they indicate the brokers view of the present value? Or just encouragement?! :)
Good news - Peel Hunt have today increased their target price to 450p (from 360p) and say Buy: Http://investing.thisismoney.co.uk/broker-views/ Happy New Year to anyone else here on this quiet thread! I suspect there's a lot of upside here this year and in the future as the transformation of this company takes hold.
Buying at 378p this morning.
£3.76 is not showing on my HL account, wish it was, this is turning out to be a monster share for me. Having bought my first tranche about a year ago, looking good let’s hope 2018 is just as good. Look forward to 25th rivaldo!
DSCV are presenting to investors on January 25th in London - just register here for free: https ://www.proactiveinvestors.co.uk/register/event_details/125 Good to see the company being "proactive" and looking to expand their investor base.
I missed this good coverage of DSCV's results with comment from two analysts: http ://www.proactiveinvestors.co.uk/companies/news/187877/discoverie-s-price-target-lifted-by-finncap-on-back-of-sector-beating-growth-rate-187877.html Extract: "“We have many growth opportunities ahead of us as we drive towards our stated targets, and our ambition remains to repeat the performance of the last five years by doubling revenue and underlying earnings per share through a combination of organic growth and value-enhancing acquisitions," Jefferies said. Broker Peel Hunt, which counts DiscoverIE as a corporate client, described the trading update as “excellent” and said there is plenty of momentum heading into the second half of the financial year. “The group has also changed its name to discoverIE Group PLC, which we see as a natural, positive move that reflects the evolution of the business from distributor to designer and manufacturer,” Peel Hunt noted. DiscoverIE stands for “Discover innovative electronics” and follows on from the recent FTSE reclassification of the stock to the Electronics and Electrical Equipment sector. Adjusted profit before tax of £10.4mln was a shade above Peel Hunt’s forecast of £10.3mln. The broker left its full-year forecasts unchanged, following upgrades in April and October, but said there is a chance that it would be revising them upwards again before the financial year is done. “Net debt at 30 September was £37.6mln, down £3.5mln YoY [year-on-year], which equates to 1.3x pro forma EBITDA [underlying earnings] and leaves plenty of firepower for further bolt on acquisitions, the pipeline for which we understand is looking healthy. Absent any deals, we’re forecasting net debt to reduce to c£27mln by the end of the year,” Peel Hunt, as it reiterated its ‘buy’ recommendation. “On a PER [price/earnings ratio] of 14.5x Mar18e [forecast earnings for year to March 2018] and a dividend yield of 2.8% we think the shares are significantly undervalued,” the broker said. Shares in the company rose 2p to 320.25p on the results; Peel Hunt thinks they could hit 360p in the next 12 months. The price target is even punchier at finnCap, which reckons the shares are worth 405p – up from its previous target price of 339p. Even at that valuation, the stock trades on a 15% discount to its peers, despite the prospect of faster growth, finnCap noted. The stock is currently trading at a 37% discount to its peers, but finnCap expects this discount to narrow. “The outlook is positive, evidenced by a record order book (+16% at CER [constant exchange rates]), and investment has consequently been made into working capital. Of particular note is a 30% increase in new project design wins, providing an expanding base from which to drive continued growth,” finnCap’s Guy H