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Braemar look very cheap to me. If you take the guidance from their latest trading update that operating profit will be 12m for FY23, you only have to take off finance costs to get pretax profits, these will be significantly reduced due to Cory brothers sale and subsequent debt repayment. That gives you a pre tax profit of maybe 11.5m minus exceptional items.
That’s a 7x pre tax p/e for a low debt company with a recently strengthened balance sheet.
That’s the bull case, who’s got the bear?
Last minute large buy of 80,000 shares? Who's buying and why? Interesting development in small cap cpmpany. Predator maybe? Let hope so! Hope springs eternal in dificult times. Birdseye!!!
Interestingly MOD contract not mentioned....has the MOD , for once, negotiated aggressive terms?
just the curse of AIM...appointment of Cenkos as joint broker should help exposure.
I feel like the market may be overlooking the significance of the forward guidance in today’s update. 12m of underlying operating profit for FY23, combined with the Cory brother’s sale and subsequent debt reduction will result in finance costs being reduced to almost nil over the coming years.
That will mean 12m operating profit is equal to PBT. That would represent a 7.5x PBT P/E ratio at today’s 90m market cap for a company that is committed to paying down its remaining debt.
The only caveat is that in the last two years Braemar have had tail winds that are unlikely to be repeated. Still, with today’s update, profits can drop significantly and it’s still good value.
hope this will push the share price back to previous highs
doesn't explain why Clarkson is going up ....curse of AIM shares?
current global political instability and it's impact on trade is one aspect of it. Shipbrokers make their money on commission and if charterers pull back from activity due to a 'wait and see approach' there is less activity. Of course this is a very short term approach but that seems to be the timescale on which shares are traded nowadays.
Any insights given it is making bumper profits ?
Henry Boot RNS says Joanne Lake has been appointed NED at BMS....nothing on BMS RNS yet.
another NED collecting NEDs...hope she has time to contribute.
The sell-off is partly down to me, apologies! Had a look at the BDI now down massively to around its levels of a year ago. Knowing BMS' volatility and often illiquidity I decided to sell and take profits in case the market adjusted before me, particularly in these rotten markets.
Good luck all. I'm sure the trading update in mid-March will be good, but it's a while until then and there may be another buying opportunity before that.
Kleinwort Hambros as the ESOP's trustee are certainly keen to mop up stock here - they now own 6.23% with just over 2m shares.
That's up from 1.57m shares on 21st December, so they've bought around 430,000 shares in a single month:
Https://www.investegate.co.uk/braemar-shipping--bms-/rns/holding-s--in-company/202201191756300134Z/
I don’t have the detailed spread info. Can anybody ascertain if the reasonable sized trades occurring just before the close over the last few days are buys or sells?
The new issue of SCSW was out this weekend. In case anyone didn't know, BMS were one of the main new Buy tips in last month's issue. It should be OK to publish details now since the new issue is out.
Here's a couple of extracts:
"Braemar Shipping - Plans to double in size in 3/4 years"
"The pandemic has reminded the world just how almost everything in our homes has, at some point, been transported by ship or lorry. About 80% of the goods we consume - including electronics, clothes, medicines and processed food products - are shipped in containers and average dry cargo charter rates (what it costs to ship a container from China to Europe) have tripled since the start of the year.
Plans to double in size within 3/4 years
Braemar acts as agent to the owners and charterers of vessels and alongside shipbroking, it provides a comprehensive range of services in sale & purchase (S&P), new buildings and demolition. Going into the pandemic it wouldn’t have been considered a growth share investment; the industry is notoriously cyclical. But when charter rates and asset values rise, so too does its income and Braemar is ambitious; chief executive James Gundy, a life long shipbroker who joined two years ago, plans to double Braemar in size in the next 3-4 years through organic growth and acquisitions from a baseline of £112m sales and pretax profit of £8.1m (in the year to February 2021)."
"On top of this, Braemar is planning investments in the core business to meet a newly-stated aim of doubling the size of its shipbroking operations within four years. It intends to do this through a mix of acquisitions and organic growth, which will involve hiring new brokers covering not only existing segments and geographies but also new supplementary markets. It pays these incoming brokers cash upfront and they then join its team with a book of business. Stone says Braemar is strongest in tankers, specialised tankers, dry cargo and S&P but there are still opportunities to increase its US presence, develop European offices and grow its renewables capacity further.
Current forecasts obviously don’t reflect any such acquisitions or any potential growth in headcount and forecasts are unusually flat at 23p for each of the next three years, which reflects one segment waxing whilst the other is waning. The shares are cheap on a PE of 9x and Clarkson has just said trading is running ahead of market expectations - so it seems acquisitions, when they come, will fuel the fire. I am a buyer."
CKN have once again released a trading RNS today stating that they've outperformed, and one of the main reasons noted is the success of the Broking division, which should reflect well on BMS.
CKN will presumably do well today, but I'm invested here instead as the rating is so, so cheap compared to CKN and the potential upside that much higher:
Https://uk.advfn.com/stock-market/london/clarkson-CKN/share-news/Clarkson-PLC-Closed-Period-Trading-Update/86964252
Https://masterinvestor.co.uk/equities/small-cap-comment-featuring-bms-alu-snws-and-flo/
"Braemar Shipping Services (LON:BMS) – at a discount to its peers
The recent improvement in the share price follows on after the excellent results from its very much larger peer group player Clarkson.
That company’s figures have made certain investors realise the discount at which Braemar is trading currently.
There should be a bullish Update on the current year’s trading being announced within the next two months.
The fiscal year ends on 28 February and what an eventful year it has experienced especially in its shipbroking business.
After falling away to just 200p at the beginning of last month, the company’s shares closed strongly at 271.5p by last night.
Is the market now expecting to hear bullish news with its profit expectations being surpassed?
I see them over the 300p level very soon, with last year’s 323p peak an obvious objective."
Happy New Year everyone.
This story in the Telegraph indicates that BMS's Sale and Purchase desk will continue to be buoyant...(subscriber-only though):
Https://www.telegraph.co.uk/business/2022/01/02/old-ships-sail-prices-soar-supply-chain-chaos/
"The Telegraph
Old ships sail on as prices soar on supply chain chaos
Ship owners are cashing in on global supply chain chaos as old container vessels soar more than 600pc in value and sales in a lucrative second-hand market rocket
etc"
at one happy point this year I was up 75%...now 51% so yes plenty more upside. Must remember to take chunky profits when I see them!
New recent highs now after today's 10.5p rise. Loads to go yet though imo.
Good to see the share price continuing to bounce upwards - hopefully soon back to 260p just for starters in chart terms. And loads of upside to the analyst's 444p price target.
David Thornton at Growth Company Invest has picked BMS as one of his Stock Ideas for 2022 as a "Cheap as Chips" company (from around 32 minutes in):
Https://www.**********.co.uk/articles/special-xmas-stock-picking-forum-306aa77/
BMS were tipped as one of the new main Buys in this weekend's issue (as posted elsewhere on other bb's).
Apparently BMS were also tipped in Growth Company Investor magazine.
They look very cheap imho. Certainly lots of upside to Finncap's 444p target price.....
BMS said in November - The board expects to report underlying operating profit* for the half year to 31 August 2021 of £6.9m, well ahead of the prior period (2020: £5.6m) as a result of the strength in depth and diversification of the Group’s shipbroking service lines, together with the general strength in many of the Group’s shipbroking markets.
The overall trading environment for Braemar continues to be positive and the board now expects to report underlying operating profit* for the year to 28 February 2022 of £10.8m (2021: £8.9m), 21% ahead of the prior period and 15% ahead of the board’s previous guidance.
Sometimes this good news doesn’t hit the SP straight away. Am hoping for similar positive RNS in the near future, but for now see this as a low risk stock, especially as others have said on here, the dividend is here too. Views anyone please?
UNCTAD say- “Maritime trade contracted by 3.8% in 2020, reflecting an initial shock from Covid, but it rebounded later in the year and is projected to increase by 4.3% in 2021 The medium-term outlook for maritime trade remains positive but subject to mounting risks and uncertainties”. Other mixed observations but overall it seems Braemar is a well established company who have (forgive the pun..) weathered the storm
Have observed this company for a long time and because elsewhere in shipping - WNWD launched 2 days ago, looked again and by chance just before today’s rise, so jumped in. Forgive me for shouting out WNWD but if you care to take a look you will see what I mean.
Going back to BMS