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If CKT are not at least 90p this time next year come back and tell me about it
A lot of share prices the same or not anywhere but doing well like Eckoh Netcall and CKT are loss making CKT will be £3 in three to five years
An investor here on and off for 15 years, mostly with EKT but not suprised to see CKT doing nothing either
I see you have clocked up 26 posts.....Gosh :-)
Who is this numptey highside? Talking out of his rear end with one post
I don't see much chance of 75p TBH. checkit is lumbered with poor management, the only person who ever does well from EKT/CKT is old Mr. Corbyn...sorry Daley
Simon Thompson of Investors Chronicle has produced another update on Checkit. The article "Operationally geared for outperformance" was published , out of hours, on Friday 30/4/21.
In summary, he's raised his target to 75p from 60p.
The article relates to "inflection points" where a company having been loss making becomes profitable and this profit ramps up earnings as all of the fixed costs become covered. His view is that Checkit are closer to their inflection point than investors currently think.
Edison have also produced an updated sum of the parts valuation for Checkit, once more using enterprise values as a multiple of sales for the two divisions of the company. Checkit BEMS is given a value with EV being 1x sales and Checkit Connect 4x sales.
The Edison method gives a sum of the parts valuation of 83p.
I think their methodology is sound, however, my view is that higher input values should be used.
Edison state that the software sector average EV/sales multiple is now 6.5 (it was quoted as 5.8 the last time they published). This is an increase of 14%.
When they do their sums for Checkit, they have not amended their multiple for Checkit Connect and have continued to use 4.
The Edison publication contains a very helpful table showing values for a range of EV/sales multiples. Using this I can see that a multiple of 4.5 for Checkit Connect would give a value of 90p for the company.
Applying the sector average (6.5) would give a value of 118.
So there you have it:
Simon Thompson target 75p
Edison sum of the parts value of 83p
Higher multiples using Edison's methodology of 90p and 118p
Whichever you choose, the message is clear: Checkit shares are currently undervalued.
Share price had a nice recovery during and after the results webinar which was very well attended. A recording of the webinar can be found here: https://youtu.be/uS5nAMrdVJU
A write up of the webinar can be found here: https://www.yellowstoneadvisory.com/post/checkit
Hi Yellowstone. you commented:
"CKT FY - inline with higher numbers guided in Feb.
Chairs statement particularly bullish on future prospects. Current year started strongly"
I think I've read slightly differently and see things even more positively.
10/11/20 Trading update
Performance ahead of expectations in Q3 FY21. Annual Repeat Revenue +30% compared to prior quarter.
11/2/21 Trading Update
Above expectations in Q4. ARR +46% to £5.7 million
29/4/21 Preliminary Results
A further upgrade to expectations of 11/2/21
I read this as a February upgrade being bettered two months later with today's preliminary results.
It's also interesting to note the buys that have come through after 1pm when the board have conducted a conference call.
There's also a broker nor from N+1 Singer which I can only read the first couple of lines saying :Strong performance exceeding our forecasts on every metric.
I think we'll be getting some upgrades fairly shortly.
Edison have published an update today, with an 83p sp calculation.
#CKT FY - inline with higher numbers guided in Feb.
Chairs statement particularly bullish on future prospects. Current year started strongly
https://londonstockexchange.com/news-article/CKT/preliminary-results/14956530
Webinar today at 1pm. Hear the mgmt team and ask your questions.
https://us02web.zoom.us/webinar/register/2816183450859/WN_vu9Av2ekRTyxGJ9nfxHErw
Currently Checkit are quoted on a spread of 56-61.
I had a look at doing a sale of 5000 and was offered 59.5
I then looked at a purchase of 5000 and a purchase of 1000. I was unable to get an automatic quote for either and had to send my order to the broker. I declined but set a limit order much closer to Edison's valuation. Who knows, I might get lucky!
The high sale price and absence of quotes to buy indicate to me that brokers perhaps don't have enough stock to meet current demand. If this situation persists I think it's likely we'll see share price appreciation between now and the results.
The RNS confirms a positive milestone has been reached to cut monitoring costs for clients. Also encouraging is the comment, "This is the first of several improvements we shall be making this year". I hope this includes monitoring energy saving/GHG emission reductions, so CKT is in a very strong position to take on US President Biden's ambitious commitment today to drastically reduce emissions in key sectors such as agriculture by 2030. I hope this will be discussed at the webinar end April as it will add massive value.
https://www.theguardian.com/us-news/2021/apr/22/us-emissions-climate-crisis-2030-biden
The fact CKT has taken on a new sales team in the US this year (see previous RNS) means taking on the climate is in CKT's interest and reach.
DYOR & GLA
UQ
Checkit Plc announce FY results on 29 April and there is a webinar for investor at 1pm that day with Chair Keith Daley and CFO Aysla Muir. Register
https://us02web.zoom.us/webinar/register/2816183450859/WN_vu9Av2ekRTyxGJ9nfxHErw
Checkit Plc announce FY results on 29 April and there is a webinar for investor at 1pm that day with Chair Keith Daley and CFO Aysla Muir. Register
https://us02web.zoom.us/webinar/register/2816183450859/WN_vu9Av2ekRTyxGJ9nfxHErw
One of my shares might work out
Below is an extract from Edison Group. It's free to access if you sign up.
Valuation: Sum of parts suggests upside
On an EV/sales multiple of 1.6x for FY21e and 1.4x for FY22e, Checkit trades at a significant discount to the UK software sector (5.7x current year sales). On a sum-of-the-parts basis attributing EV/sales multiples that better reflect the performance and prospects for each division, we estimate the stock is significantly undervalued. For example, using a 4x FY21e multiple for Checkit Connect and 1x for Checkit BEMS would result in a valuation of 72p per share.
I'm not sure why they haven't used the 5.7x valuation metric they quote for the UK software sector, however, the conservative (in my opinion) valuations they're applied still give a valuation 20% north of the current share price.
Today's news merely reinforces the case that this a company going places. More than happy to be with it for the journey.
Very encouraging news from the latest RNS today:
"The acquisition serves to accelerate the Group's US expansion plans, providing a footprint and an opportunity to add further scale. The Directors believe that, based on relative population sizes, the US represents an addressable market around five times larger than the UK, and therefore believe the acquisition represents a significant milestone in its growth strategy... Checkit is also pleased to announce the appointment of two senior business development executives, Kit Kyte and Steve Peck, effective 1 February 2021... Kit Kyte... was previously with New York headquartered Genpact, a global professional services firm delivering digital transformation by putting digital and data to work to create competitive advantage... Steve Peck ... was previously employed by Oracle NetSuite, the world's number 1 cloud business management software suite. Steve has considerable experience of Checkit's two most important vertical markets, Healthcare and Food Retail."
I've held this stock from the Electron days and will continue to do so. Why? Once everyone realises the potential of using the sensors and workflow to support adaptation and mitigation to climate change, the agriculture and food market alone will be enormous (accounts for around 24% of all GHG emissions globally). Furthermore, the upfront costs associated with using the sensors/software are relatively low compared to other adaptation/mitigation methods.
Just imagine if the sensors run off RE from IKA batteries in the future?
DYOR
UQ
Have been doing some research on the quality of the major shareholders and take some confidence... the Ruffer Holding (10%), the largest shareholder i believe after the Chairman, Keith; is of some interest.
It's held in the Ruffer UK Mid and Small cap fund, managed by Trevor Wild. Trevor is widely considered the top UK stock pickers by the broker community on the sell side of equities....which says something. He was one of the few to spot the Games Workshop opportunity as they moved the business model to predictable gaming revenues / royalties. Games Workshop grew 15x and in recent times is one of the top performing UK stocks: https://www.bloomberg.com/opinion/articles/2020-09-11/games-workshop-space-warriors-trump-tesla-in-stock-market-race
Thanks for the informativer comments. Edison have today indicated a sp target of 72p which should support buying in the Santa Rally.
Posting on here for the first time. Working in the Tech B2B space for several years and watching some private investments in the sensor and workflow space i dont think the market has woken up to Checkit (due in the main to its small market cap). It's currently on a 2 x revenue multiple. It's competitors in the private space are on 10-20x revenue multiples at a similar stage in their life cycle. I'd expect to see Checkit rerate to 5-10x fairly quickly as the market wakes up and perceives it as a Tech B2B growth stock. Another 6 months of growth should help with that.
What's also encouraging to me is the leadership and commercial revamp. New CFO, new COO to support the Chairman and i'd hope to see a CEO or CCO/CRO in place soon to cement that on the Go To Market side of things. Linkedin data shows a 25% increases in the sales team which is key for this space also whilst they face a more limited competitive landscape.. I'd take further confidence if more investment was made in the Sales & Marketing space near term.
Just some thoughts.
Informative presentation today which put flesh onto the results, particularly about the planned future.
HY results from Checkit today. Covid has had an impact on installations reducing sales growth but recurring revenue is up 23.4% and operating loss has halved. Net cash of £13.4m provides plenty of runway and management remain confident on the route to profitability and are confident about the outlook. Hear for yourself at the webinar today at 4pm when Chair Keith Daley and new FD Aysla Muir will run through results. Register : https://us02web.zoom.us/webinar/register/5515978548987/WN_KKrIk1oAS7OS3Y3On6AbXA
Keith Daley, Executive Chair and Aylsa Muir, CFO designate, present the HY results to 31 July 2020 on 16 September
Register Here https://us02web.zoom.us/webinar/register/9815984269030/WN_KKrIk1oAS7OS3Y3On6AbXA
Good performance from great company, expect good growth from here DYOR