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Cenkos have issued an update note this morning, reiterating their Buy and 200p+ target price.
They've left forecasts unchanged at 11.4p EPS and 13.8p EPS for the years just ending and starting - and they note that the $4.1m contract win "provides some possible upside to our visibility estimate".
In summary:
"Significant contract win Shearwater has secured a $4.1m contract with an existing customer to implement a new zero-day attack prevention system. After a significant proof of value process and demonstrable RoI by Shearwater, this new solution will effectively replace an incumbent solution of a well-known vendor. We continue to see fair value at 200p+."
"Fair value lies at 200p+. Good delivery this year to date is at odds with the current share price. A rating of sub-4x EV/adj EBITDA in FY22E is anomalous and fair value for such a business with a cash positive balance sheet in our opinion lies in excess of 100% of the current share price. Buy."
...tops but then this is silly cheap and if they can get more decent contract wins, they will turn around fro here or be taken out.
Cenkos currently have a fair value of 240p or more (i.e "in excess of twice the current price", which was 119p at the time).
At present, given SWG are about to move into a year set to produce around 14p EPS, I'd say given the track record etc from 160p-170p would be a decent first target price.
But assuming SWG meet expectations for this year about to end, then produce a good and in-line set of H1 numbers to Sept'22, that range could be moved up again to nearer 200p.
...is in this market!
Cenkos and Progressive Equity forecast 11.4p EPS and 11.5p EPS respectively for the year ending in just 14 days' time.
For the year about to start, they forecast 13.8p EPS and 14.1p EPS respectively.
This contract nicely reinforces those expectations.
As if that wasn't cheap enough - especially in the cyber security market - SWG have 20%+ of their m/cap in a £4.4m cash pile.
Even if SWG were to miss H2 forecasts a little it's still on a bargain basement rating.
Crikey - a $4.1m contract win!
Over 3 years, but still.....a "significant three-year advanced endpoint cyber defence solution contract with a global financial organisation" sounds rather impressive:
Https://uk.advfn.com/stock-market/london/shearwater-SWG/share-news/Shearwater-Group-PLC-Contract-Win/87578219
"Brookcourt Solutions secures $4.1 million contract with a global financial organisation
Shearwater Group plc (AIM: SWG), the organisational resilience group that provides cybersecurity, advisory and managed security services, is pleased to announce that its group company, Brookcourt Solutions, has secured a significant three-year advanced endpoint cyber defence solution contract with a global financial organisation, totalling $4.1 million. The contract contributes to the Group's current full year expectations.
Under the terms of this contract, Brookcourt Solutions will be responsible for deploying one of its technology partners' cutting-edge endpoint security software solutions across the breadth of the financial organisation's operations. This solution will improve the resilience of the organisation's digital estate.
Phil Higgins, Group Chief Executive Officer of Shearwater, commented:
"This is an outstanding contract win for Brookcourt Solutions, demonstrating our deep understanding of best-in-class technologies and the strong partner portfolio that we have on offer for our customers. Being trusted to efficiently deploy cutting-edge, robust, effective and cost efficient cyber security solutions to global financial organisations of this calibre is something that we are very proud of."
There was a year end update on 22 April last year
Agreed - are you buying more or is it time to contact Investors Relations again asking them to put out a statement to the effect that "they know no reason for such a ludicrously low share price"
Rich
This isn't a great business but it certainly isn't worthless. A catastrophic profit warning must now be in the price yet the last update was quite encouraging. Having a former UK defence secretary on the advisory board isn't counting for much :/
Should be GOOD for this company. Come on Board -what are you there for?
Brookcourt Solutions secures two contract renewals with a leading Global Financial Organisation
E$xpect a naughty bid at this level.
Pinterest was acquired for about 7 million. So whilst in the grand scheme of things a £300,000 contract may sound insignificant, with the hundreds of clients on the books it is actually a pretty decent deal and of course could lead to other work. As Mr Williams says 'SWG is in the best shape its ever been with no debt" Probably why he and Mr Higgins sunk yet more of their money into the stock. Just so typical of the market at the moment with small caps to put 2 and 2 together and come up with a minus figure
.
They are trying their best but it has deteriorated so far that whatever they announce is unlikely to gain investor traction and support.
Very little else to say, really
What is wrong with the contract win, please?
Nice new contract win announced today, important for it being a cybersecurity contract with a "global technology business" raher than the £300,000 value (which is why it's an RNSNON):
Https://uk.advfn.com/stock-market/london/shearwater-SWG/share-news/Shearwater-Group-PLC-Contract-Win/86985618
Would make a decent bolt-on but has fallen so far that I suspect unless more than one bi8dder, I still would make a loss - just a smaller one.
The unknown trade of 28k can only be a buy other it doesn’t make sense for the SP to move up 6%. Also I just got off the phone with my broker and it’s very well bid at 15p and you can only buy 1000 shares at 19p. Looking very strong indeed, so undervalued.
Forgot the link:
Https://masterinvestor.co.uk/evil-diaries/evil-diaries-different-expressions-of-intangibility/
Great to see SWG getting some exposure via Evil Knievil:
"My correspondent, Robert Corden, drew my attention on the run up to Christmas to Shearwater Group (SWG). Here NAV is roughly double the current share price of 110p and intangibles (presumably these have arisen through acquisitions) are in at around 200p+. According to Robert EPS is increasing quite rapidly and on that basis SWG is cheap. I hope so. There is plenty of cash."
It's worth noting the current EPS forecasts.
Cenkos go for 11.4p EPS for the current year, then 13.8p EPS to March'23.
Progressive Equity forecast 11.5p EPS this year, then 14.1p EPS to March'23 )and that's fully diluted adjusted EPS too).
It's no wonder on a current year P/E of barely 10, falling well into single digits - and a substantial cash pile - Cenkos say "Fair value lies in excess of twice the current price. Buy".
More big buys today. With the seller cleared this could move very quickly back to £1.50.
Totally agree Staylong. Buying over £200,000 of shares is a lot more than just a ploy. Even Darktrace has halved in value recently. Not sure why there has been such a sell off in the sector. Just the way markets moves sometimes. I had an exchange of emails recently. We discussed the problems of small numbers of shares in a small company having an exaggerated effect, especially when an investor like Killock wants out or to reduce. Mr Williams assured me that the company was in the best shape its ever been and looking forward to contracts coming through in the pipeline similar to last years trading when the stock hit £2.20 again. Looks like we all need to bail in April and buy back in November!
@Pinocchio. I think you best close your short or I think you’re going to get your bum smacked. Looks to me that it’s it’s not only the directors that are building a position. And on top of that the seller seems to have cleared.
Another director buying shares. Always a good sign. Is something happening ?