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To save time for anyone wondering as I was - from last trading update in Feb:
"The Group expects to commence FY22 with a healthy order book and intends to provide an update on the outlook for FY22 when it announces its preliminary results for FY21 in late May."
Calnex was founded in 2006 by Tommy Cook. It only listed as a plc, for the first time, last year.
The founder is still there and still hungry to expand the business. From reading the Herald Scotland 'accidental entrepreneur' article There is money for acquisition up to around £5m. In case of a bigger opportunity, he is prepared raise money from the markets to take advantage. That is why I am invested.
Hi All
Newbie here. This company caught my attention recently and started doing some research, looks ok and surely I've missed the rise but noticed it got delisted in 2007 once. Now I understand an offer was made but what was the SP then and who was the CEO? I'd really appreciate it if somebody could highlight the company history a bit.
Many thanks
regards
neon
John Rosier has bought some more CLX following the results, per his portfolio update in Friday's IC:
Https://www.investorschronicle.co.uk/ideas/2021/03/12/what-the-big-reopening-will-mean/
"On 19 February, I added to my position in Calnex Solutions (CLX). I thought the trading update on 16February was most encouraging. It said it expected results for its year ending 31 March to be ahead of expectations. Cenkos promptly upgraded its revenue forecast by 12 per cent and its adjusted pre-tax profits by 19 per cent. The shares reacted well on the day, but then profit-taking saw them drift back.
The drop in the share price allowed me to add at 114.7p."
Added at 111p. Looks a good buy at this price IMO.
Current range 110-130p - hoping this will take off again, when full year results are out in May, along with progress made in 2021.
Rich
Spirent's shares are nicely up this morning after good results and a rosy outlook today. SPT are CLX's main distribution partner.
Loads of commentary on the 5G rollout and related testing etc which should bode well for CLX:
Https://www.investegate.co.uk/spirent-comm-plc--spt-/rns/full-year-results/202103110700108708R/
Thanks for that link Qd22. Had to sign up for the free membership to read it but didn't tick the please contact me noon, night, and day buttons. So we'll see :)
Still haven't taken a position in CLX for the simple reason it's too expensive IMO. Margin spread in share dealing is quite large with few trades per day (under the market's radar?)
Do admit I've made this mistake before thinking a premium rated stock should be rated amongst the vanilla average PE's when in fact the market is quite happy to award premium ratings to a 'hot' stock achiever.
However, I'll settle for anything under £1. Failing that I'l keep on a watch list until CLX has some future crisis and judge on how the SP responds.
Also have you noticed that since mid December to currently, the SP has been on an ever so slight, barely noticeable, over all slant to the downside since that date? Almost imperceptible but it's there. It's nothing at the moment. And as of yet unremarkable, so don't sweat that observation. I may never get in below a £1 and instead end up paying well over it as I do like this little company.
77% of it's revenue earned overseas, and balance sheet metrics to die for.
Hope I don't cave in to temptation, and stay the course until I get my entry point LOL!
Rivaldo, it’s a long and very detailed article, which strangely I could access just as a card on my phone Google page in total at first, but not later through the link I have copied and pasted. However I can if I go through the historyOn the phone. Paragraph the last section was titled “Why we like it”:
“ The roll-out of 5G and the evolving nature of the telecoms market provides a highly supportive environment and if growth can be maintained, which appears likely, the shares look interesting value, despite the sharp rise since IPO.
Calnex has an established position in the test and measurement industry, providing equipment to a blue chip customer base, including some of the largest organisations in the world.
The development of cloud computing infrastructure will undoubtedly create new opportunities for test equipment which Calnex seems well-placed to benefit from.
While still small, it has a proven track record of developing innovative and advanced test solutions, for a demanding and highly technical customer base.
Products are distributed through a global network of partners which means the business has a substantial geographic reach despite its small size.
The founder remains a significant (21%) shareholder which means his interests are well-aligned with those of outside shareholders, which include a number of well-regarded small cap institutions.
Revenue has grown at a compound annual growth rate of 16% since 2015 and interim results to 30 September were excellent.
It generates attractive margins (c24%) and returns on capital with a backlog going into FY21 and a strong sales pipeline. With strong cash flow and all debt repaid Calnex is also now a in a strong net cash position.
It benefits from high levels of repeat revenues, with over 80% of revenue over the last three years coming from repeat customers and over the last five years 166 existing customers placing repeat orders.
While still relatively early days on public markets, and we have seen many small businesses stumble after initially making a strong start, Calnex has the benefit of a very supportive telecommunications market backdrop.
Scottish Enterprise remains a significant shareholder and will probably be looking to sell down further once the 12 month lock-in ends, but there are likely to be some very willing acquirers when this time is reached.”
Cheers Qd22 - at least the start of the article is visible:
""This is the first in our new series of articles introducing fast growing smaller quoted companies. Our main focus here is on hunting out companies generating strong organic sales growth, ideally with plenty of profits and cash, although we are willing to forgive that if the top line is soaring! First up is a rapidly growing small business which has already impressed since arriving on AIM in 2020. (IHT qualifying)
The roll-out of 5G and the evolving nature of the telecoms market provides a highly supportive environment for this small testing business, which hasn't missed a beat since its IPO on AIM in 2020. If growth can be maintained, which appears likely, the shares look compelling value.
Founded in 2006 and with its headquarters in Linlithgow, Scotland, Calnex Solutions (LON:CLX) designs, produces and markets test and measurement instrumentation and solutions for the global telecommunications sector, enabling its telecom customers to validate the performance of critical infrastructure associated with telecoms networks.
Calnex has an established position in the test and measurement industry,¦...etc"
https://www.investorschampion.com/channel/blog/amp/stonking-small-caps-telco-tester-delivers-impressive-growth
Have to admit I haven’t read it yet, but it’s clearly a great advert.
CLX' Twitter feed is quite active. Here's a couple of recent interesting posts...it's a good sign that CLX continue to hire, and confirmation that the partnership with Spirent remains strong:
Https://twitter.com/CalnexSolutions?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor
"Calnex Solutions
@CalnexSolutions
·
Feb 18
Calnex is #hiring! We have opportunities available for:
• Product Applications/Support Engineer (Linlithgow)
• Senior Hardware Design Engineer (Linlithgow)
• Hardware Design Engineer (Linlithgow)
For more information and to apply, please click:
https://calnexsol.com/en/careers"
"Calnex Solutions
@CalnexSolutions
·
Feb 17
We have partnered with @Spirent on the new eBook "The Need for Timing and Synchronization in a #5G World" highlighting the synchronization requirements of applications such as O-RAN, Disaggregation and Network Slicing. View it here: https://spirent.com/assets/ebook-the-need-for-timing-and-synchronization-in-a-5g-world
Quote Tweet
Spirent
@Spirent
· Feb 5
How is the #5G #network changing and why is #synchronization so important? Find out here
??
https://okt.to/gv6Hjn"
New here and bought in after reading that article!
Tipped today in Money Week - presumably this will be in the fortncoming print edition too:
Https://moneyweek.com/investments/stocks-and-shares/share-tips/602786/three-aim-stocks-to-buy-now
"Three Aim stocks that should hit the bullseye
Professional investor Jonathan Moyes of Wealth Club picks three interesting stocks to buy from Aim, London’s junior stock exchange
22 Feb 2021
"Testing for telecoms
Calnex Solutions (Aim: CLX) provides test and measurement services to the global telecoms industry. These solutions allow its customers to validate the performance of telecom-network infrastructure. A key driver of future growth for the business will be the rollout of 5G mobile networks. 5G infrastructure needs to be more stable than 3G and 4G as it will support more services and the “internet of things” as well as applications such as driverless cars. Connectivity therefore needs to be extremely secure and with that comes a growing need for Calnex’s testing instruments and solutions. Customers include blue-chip telecom and internet infrastructure firms such as Vodafone, Google, and Cisco. The business has grown sales from £8.4m to £13.7m in just three years."
" we expect to deliver growth in the year considerably ahead of the forecasts published "
----------------------
I always thought the stockmarket idiom went:
Buy on the news; Sell on the results.
But judging by the bearish SP reaction it would appear the current contingent of holders are of the type:
Buy on the rumour; Sell on the news.
Great news - Short, concise, confident.
Was expecting a little more interest. See where it goes tomorrow.
Wonderful stuff.
And they're able to state this with six weeks to go before the year end, so things must be looking very good indeed.
Especially as management here are generally prudent, i.e definitely not ones for overstating things.
Https://uk.advfn.com/stock-market/london/calnex-solutions-CLX/share-news/Calnex-Solutions-PLC-Trading-Update/84340024
I note that earlier this week John Rosier - a respected small cap investor who writes a column for the IC - bought into CLX:
Https://johnsinvestmentchronicle.com/new-holding-calnex-solutions/
I won't copy his article, but essentially he believes that the forecasts are undercooked, CLX are a quality outfit with high margins and good cash flows, and CLX are a good way of investing in the 5G boom. And "double digit growth could continue for many years".
Excellent article about the recent IPOs of both CLX and FNX (I hold both!). Some very nice quotes, and great to see everyone in the company motivated by share ownership and a new SIPPS scheme:
Https://www.lsegissuerservices.com/spark/three-ipo-stories
"We had made three small acquisitions in the past decade and we wanted to acquire bigger target companies"
"We’ll only make acquisitions if they enhance our portfolio or give us access to a new set of customers. Acquisitions are a bit like fishing; you have to be prepared if one bites. And now, when such an opportunity arises, a target company will know the value of our paper and that we have the ability to access capital to do the deal."
.....................UK Smallcap Investor
@stocks102
·
2 Jan
THREAD: Long Calnex #CLX
Calnex is a recent IPO on AIM (Oct 2020). It’s already had one ‘trading ahead of expectations’ statement. It seems unknown – based on there being no ‘Discussions’ at all on Stockopedia about it at the time of writing.
The company provides test kits to
UK Smallcap Investor
@stocks102
·
2 Jan
telecom operators like Verizon. Verizon uses these devices to make sure, ahead of time, that their telecom systems can deal with the huge ramp up in telecom traffic which 5G is about to bring.
What is 5G? This is the new standard for telecom networks, with greater-than-ever
UK Smallcap Investor
@stocks102
·
2 Jan
bandwidth, and faster-than-ever download speeds. This will facilitate a whole host of new technologies (not just mobile phones) - for example autonomous vehicles will communicate with their control centres via 5G. Much more data will flow through telecom systems as a result,
UK Smallcap Investor
@stocks102
·
2 Jan
and telecom operators must be certain, ahead of time, that their systems can cope with this rush of data. The advent of 5G is a 10 year tailwind for Calnex; but after that there’ll be 6G (probably from 2030 onwards) then 7G etc.
Calnex owns this niche (of providing test kits
UK Smallcap Investor
@stocks102
Replying to
@stocks102
for telcos to make sure their systems don’t crash ahead of the data ramping up for 5G).
Gross margin (c 80%) and EBIT margin (c 30%) metrics are strong – as is cash generation - because, a bit like Fevertree, everything (mainly manufacturing and sales) is outsourced.
I have topped up a few times throughout this week. I think 5G will positively affect all companies involved in it. CLX being one of the main providers of test equipment where barriers of entry are high.
Nice rise - stock available on any dips being eagerly bought up.
These are the two reasons that attraced me to invest in CLX for the long term:
1/ "Calnex designs, produces and markets test instrumentation and solutions for network synchronization and network emulation, enabling its customers to validate the performance of the critical infrastructure associated with telecoms networks. To date, Calnex has secured and delivered orders to over 600 customer sites in 68 countries across the world. Customers include Ericsson, Nokia, BT, China Mobile, NTT, Intel, Qualcomm, IBM and Facebook".
2/ Exceptional and unique with this company: "The exponential growth of data creation and migration of industries to cloud computing, along with the long-term transition of the telecoms industry to 5G, continue to drive a need for new test instrumentation, presenting the Company with significant, long-term growth opportunities."
However, I won't be surprised that every technology company at the threshold of 5G would love to take CLX over before it becomes too expensive as did Cisco a few days ago:
"Shares in IMImobile soared more than 47% on Monday, after the London-based cloud-communications software company agreed to a takeover bid from information technology giant Cisco Systems, in a deal valued at $730 million, including debt."
Been interested for a couple of weeks now, lurking only ( first post) and don't intend investing until Jan/Feb next year at the earliest as CLX being a recent IPO, it may do, as a lot of IPO's do - and that is range widely over 3/6 months or so, before settling down at what the market perceives is a fair price.
A poster on here, posted one week after the launch:
" . . . I will wait and watch for the share price and figures like PE ratio to be released and may invest in future. . . "
So, what is it? The P/E ratio? He never came back and aired his opinion. So I will :)
A couple of old annual trading accounts were already available back then (this site shows the historic PE ratio based on last year's annual accounts of a humungous P/E 40.7 at this £1 SP area).
However, with the very latest H1 interim trading results now in, and using the forward P/E ratio with the TTM method of calculation based on the latest higher results achieved, the fwd P/E ratio is actually showing much lower at P/E 28, a big drop on the old historic earnings figure.
However that P/E 28 is still way higher than the industry average that CLX inhabits which is, currently PE 19.3
The fact that even the forward PE ratio is well above the industry average does not bother me unduly as CLX is boasting they are the best at what they do, and their recent trading results do look encouraging (if time in the near future l might post all the annual results data I have available on here, as I have access to several years worth of pre-IPO listing annual trading results.
Besides, this higher-than-average PE ratio is part and parcel of a new entrant being received favourably by the market - so it's that 3 months ending by this year end where the SP can give a clearer picture of how the market feels about that high valuation; and my reason to elect for safety and forgo the chance of rapid profits in order to take a ride for the longer term with a young company, once I feel it gets an SP position that is sustainable and allows further growth, and the possibility off topping-up over the years at suitable junctures.
buys now at 112!
Good to see 100p up - and buying coming in at 103p now.