London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Well, I'm following Mr Rothschild and added to my holdings today.
With the firm on target to achieve its 5 year plan, it looks ripe for an opportunistic buy out
Not a holder but on my watchlist for some time. The reason this is going down is the same reason that most other stocks (particularly smallcaps) are being destroyed at the moment. Its not stock specific. Its all to do with investors moving to risk off (go to defensives, commodities, cash etc) and people discounting future cashflows due to inflation. The question you have to ask yourself is, can Volex pass heir increased costs (from staff and material cost increases) onto their clients and maintain or even improve current margins. If they prove they can over the next year, then the valuation will likely recover.
I keep reading the last update and the drop makes no sense. For that reason I am not going to invest more as I cannot see any reason for current drop so I have no clue as to how far it will drop and whether something is going on that I am not aware of. Ifthere has been no material change in outlook then this will surely bounce though sadly maybe only to bring me back level
Wish I had cash now
Agree Nice to see blue for a change lets hope we can manage to stay blue by the end of the day
Agree Nice to see blue for a change lets hope we can manage to stay blue by the end of the day
Thought this was only moved by the forces of gravity - my gosh the last few days - WT... !
Flummoxed
Nice to see it's going the way that it should be going.
Sorry my mistake I bought at £2.84 thankfully not £3.50
Even though I know shares are driven by sentiment and there can be no rhyme or reason for shares rising and falling at times I am still at at loss with Volex. The share was trading at £4.50 - £4.77 in Nov 2021 there is a continuous drift downwards and I thought I was getting in at a good price at £3.50 we get a trading update which states results ahead of expectations and yet we continue to fall. I will just hold and see how it pans out but will always remain at a loss as to why.
yep...better to reflect on lt profitability in highly cyclical industry
we are close to top of profit cycle imv...only way is down lol
tp 1.20 for oversold bounce
Just shows how Much use charts are. Down 15% a few days later
From the TU, they have clearly demonstrated their versatility and ability to steer the ship through extremely difficult macro environ.
Management is excellent.
Pricing power very strong
No supply constraints issues
Strong tailwinds
PE - c 13? cheap
Would not surprise me if more II's or Downing load up more given how re-assuring the TU was.
Spread is peanuts so can always dash in and out with minimal fees.
MM gapped up on TU day to starting price of 276p - so not many recent PIs, including myself bought below than that (many like me were sitting on the sidelines), given that many were expecting inflationary narrative and supply constraints blah blah narrative to pop up - no such thing!
Close to being a very strong chart buy
Dormus
The sp seems to me to be a very good entry point for a company that has very good prospects so I have decided to add a good bit more . I cannot see any negatives other than the general turmoil that is happening to stocks . So this is a hold in rough seas .
Tesla yesterday reported 68% rise in car sales last year and forecasting 60% rise this. Hopefully lots more cables to order from Volex!
What would be your current sell target?
This is Nat Rothschild I doubt he will be bothered to much .
Yes I did at the time think that purchase by Sharon Molloy, wife of COO, purchasing 95,000 Shares on 14/03 at 262p was revealing, and glad I topped up again on the back of it. Remain intrigued as to how NR will finally capitalise on his holding here, and will hang on till then !
CONTINUED....
Directorspeak - sounds upbeat -
Nat Rothschild, Executive Chairman said, "We have delivered an excellent performance in a challenging environment and are now well ahead of the five year plan we set out in October 2019. This is a validation of an effective strategy which has created a resilient and diversified business. We continue to pursue a number of exciting organic growth opportunities, while successfully acquiring and integrating compelling acquisitions, leaving us well placed for the future."
Valuation - many thanks to Singers for crunching the numbers.
I find EPS easiest, which are (converted by me at £1 = $1.30)
FY 3/2021 actual: 23.1p (boosted by an unusually low tax charge)
FY 3/2022 forecast: 20.3p (this should be close to actual, as guidance given today)
FY 3/2023 forecast: 22.2p
FY 3/2024 forecast: 23.8p
Remember that Volex is acquisitive, so these numbers could be boosted with further acquisitions.
Whilst I’ve been typing the above, the market has opened, and Volex has shot up c.14% to 280p, so it makes sense to use 280p as my valuation share price. This gives us a PER of only 13.8 times for the year just finished, FY 3/2022. Dropping to 12.6 for the new year. This is obviously bargain basement territory, and makes this share a clearly attractive buy, even after this morning’s 14% rise. Obviously just my personal opinion.
My opinion - it’s a bargain! That’s assuming you think performance can be maintained. I don’t think we need to worry about cost inflation, or supply chain - Volex seems firmly on top of those issues, and might even benefit from competitors struggling, allowing Volex to expand its margins possibly?
I’m so glad I held the line on this one, and didn’t let fear of further losses induce me to panic sell. We’re in a very difficult market right now. Everything (almost) has dropped a lot, and we simply don’t know if that’s due to deteriorating fundamentals, or just the background noise of nervous holders selling through fear.
Decision-making is particularly difficult for all of us right now.
The share price has been relentlessly falling, which of course makes us all worry that things might be going badly. The reason I’ve been fairly comfortable holding Volex, is because the company recently agreed substantially increased bank facilities. That matters, because banks are all over the management accounts, and would not be expected to increase lending if things were going badly. So that was an important sign, that the market seemed to ignore.
Sure enough, things are going well. Today we’re told -
Results ahead of expectations
Volex is pleased to confirm that the Group's revenues and underlying operating profits are expected to be ahead of consensus market expectations1 for the year.
The Group expects, subject to finalisation of the accounts and audit, revenues to be in excess of $605 million (FY2021: $443 million) and underlying operating profit2 to be in excess of $55.0 million (FY2021: $42.9 million).
1. The Company has compiled forecasts from four analysts with current market forecasts for the 52 weeks ending 3 April 2022 for revenue to be in the range of $575.0m to $586.3m, with a consensus of $581.2m, and for underlying operating profit to be in the range of $53.8m to $54.6m, with a consensus of $54.2m.
So before we get too excited, profit is only slightly above expectations. Still, to have achieved that in a time of supply chain turmoil, and heightened inflation, is impressive.
Strong demand -
Volex has continued to trade strongly, delivering robust organic revenue growth, including a significant contribution from the Electric Vehicles sector, where revenue has almost doubled. Demand has increased during the year with greater visibility of forward orders as customers look to secure manufacturing capacity.
That last bit that I’ve bolded sounds highly significant. It sounds as if Volex could be a beneficiary of supply chain problems, in that customers are committing more forward orders. This probably also means Volex has improved pricing power, since customers presumably are more likely to accept price rises, in return for certainty of supply, in a disrupted world.
Inflation - once again, Volex has confirmed that it is successfully passing on cost rises to customers. Management has been telling us this for a while, but again for some bizarre reason, some investors have ignored this, and made the incorrect assumption that Volex must be suffering from higher copper & plastic prices.
Acquisitions - four have been done this year. Volex seems to have a disciplined approach to making acquisitions (not over-paying, and only buying companies that are a good strategic fit).
This should have led to a re-rating for the shares, but in this small caps bear market, the valuation has actually been falling, which doesn’t make sense at all to me.
Directorspeak - sounds upbeat -
Nat Rothschild, Executive Chairman said, "We have delivered an excellent performance in a challenging environment and are now well ahead of t
up 12% early doors....
Strong trading update against backdrop of increasing uncertainty and macro problems. Not sure if it’s enough to reverse the downward trend in sp so remain on sidelines for now. Bought my original stake at 70p in 2019 but sold most of it way too early around 150p. Great company but lower entry points seem likely.
Should FLY............
after underperforming for so long
Can see this marching forwards again chasing previous ATH’s, very pleasing progress.
great reassuring trading update. no issues from demand, inflation, Russia, etc