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Trading Update tomorrow.
Have kept some powder dry on anticipation of slightly disappointing results below expectations. But we will see.
SP has not lifted today or yesterday in-line with the general market after Monday's dive, so I am nervous for what this is indicating. Really poor infact.
Time will tell. Either way I will be buying tomorrow as still averaging up.
Another potential risk is China invading Taiwan at the same time that Russia invades Ukraine. Potential wars on two fronts at the same time, with or without intervention by the USA, will probably destabilise the markets still further. As if Covid was not enough of a problem. We live in interesting times!
Yes that is right, their customers are shipping the kettles, or not shipping as many kettles is the more correct fact, which means their customers warehouses became very fully indeed. Then what? Can you work it out? Yes thats right, lower production schedules of required thermostats.
Lets see what happens. But we should know this week.
If there is bad news on top of todays news then we will see more of a drop. If not then I have already got a bargain today.
Kevijoh: I agree container shipping costs have gone up a lot but Strix is not shipping the kettles. They are shipping thermostat controls to Chinese kettle manufacturers on the Chinese mainland so their own direct costs are much lower. Yes, of course most of everything we buy is container shipped so everyone’s costs go up & consumer everywhere will have to pay higher costs. If there is inventory build ups, they will be cleared with time. People are still going to buy kettles etc.. You are talking too generalistic about small appliance manufacturers. Strix has dominant market position in its main markets with high net profit margins with unique high barrier to entry products which are continuously being updating. So with new innovation products hopefully consumers will pay up higher price premiums. So you are right, Strix is currently undervalued substantially & the company should outperform when the company updates come out with time. Anyone can say they will wait for next updates for share price to drop but yet you are buying Strix shares today. So you are hedging your bets I see.
Of course it is speculating because the figures have not been published yet.
But my opinion is based on what has already been seen with other small appliance manufacturers in similar industries.
I expect that the next Update will say that call-off quantities have reduced due to large warehouse inventories at the customers due to reduced shipment quantities to major markets.
Do you know how much it costs to send one kettle from China to Europe within a container of kettles? About 50p. Well that cost has increased about 10 times which for a kettle is enough to wipe out all profit on many kettle models, and the same for many other appliances, so shipments by brands has been curtailed.
Many Directors use the old property tax line as standard excuse to justify selling. Hard thing to prove so is a safe line for them.
I agree that it is undervalued. But I think it will drop after next Update. So don't intend to top up until then.
We will see soon enough.
However, I have also topped up today as too good an opportunity to miss.
Kevijoh: You are just speculating on Strix revenue numbers. Strix last trading update said they were confident of sales revenues growing by around 30% this year. Also those Strix Directors who sold shares said they had to pay taxes on a property charge & so they had to sell Strix shares to raise money; I take this as face value. You are entitled to your opinions Kevijoh. Last time you commented, wanted the share price to go down offering negative Strix view sentiments so you could buy at a lower price. True, there has been global supply issues & more inflation with nearly every industry but nobody knows how, if at all, this has affected the company. In my opinion Strix share price is totally undervalued & just remember all these previous lockdowns increased the demand for Kettles & Strix home consumer appliances!
As I pointed out on here back in October, I expect the revenues to be down due to end customers restricting numbers of kettles shipped from China due to high shipping costs. This is why the sp has been drifting down in my opinion, and also why there were Director sells early on.
The question is what is the magnitude of the hit on revenues.
I certainly had no plan to buy any until financial statement which is due any day now, but seeing the price today is very attractive. Bargain.
I think the markets have finally woken up to the threat posed by Russia to Ukraine and the potential fall-out from a full-scale conflict. Risk is very much OFF just now. Time for steady nerves though. Nothing has fundamentally changed for Strix and at sub-250 now this looks an excellent investment. Just need to raise some funds to add some more.
Strix Board of Directors will have to do or say something to stop the Strix share price falling. It is in their interest & company financial stability and prospects to push up the share price. There is no reason for these share price dives as they have said Strix sales revenues will grow by around 30% this year. Strix has always managed its costs well too, has high net profit margins with close working relationships with customers, OEM’s and Industry professionals & has solid growth prospects. Awaiting Strix trading statement this week.