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One of the worst stock market decisions I made was to buy these shares. Countless times it has always been jam tomorrow which never materialises. The question always before me is whether to sell and bear the short sharp pain or hang on in the hope it will get better - so far I have hung on for two painful years!
Can't fault his enthusiasm. "Pile in" everyone! https://www.fool.co.uk/investing/2016/05/26/4-dividend-stars-you-probably-havent-heard-of/ "4 dividend stars you probably haven’t heard of! By Royston Wild - Thursday, 26 May, 2016 Marketing marvel I reckon investors should take advantage of heavy share price weakness at Communisis (LSE: CMS) and pile into the marketing services play. Communisis boasts an enviable client list featuring the likes of Barclays, Centrica and Legal & General, and is steadily expanding its global footprint to keep business renewals and new contract wins from major blue chips flowing in. With earnings tipped to keep rising, and Communisis generating shedloads of cash — free cash flow doubled in 2015 — the City has pencilled-in dividends of 2.4p and 2.5p for 2016 and 2017. Consequently Communisis sports giant yields of 5.8% and 6.2% for these years."
I think it's simply continued knock-on effect of St Ives profit warning plus silence from Communisis Board (which as I say below, is probably good news!).
Have the shorters got to work on CMS ? Can't see why else it is falling from an already very cheap sp.
....my thinking is this - Interim results are on 4 August. However, if the Board become aware of market conditions which, in their view, would have a material impact on the price, I think they would be duty bound (if not legally bound) to inform the market in the same way that St Ives has? On that basis, can we assume that no news is good news?
'the' not 'rte.'. Fat fingered ****.
...just going to sit there and see its stock price eviscerated? Can it not just confirm whether it is seeing rte. same trends as St Ives (or not)?
"Authority to disapply pre-emption rights" is not a good sign. :/
Still falling. We need something from the Company confirming whether they're similarly affected!
On further inspection, it looks like St Ive's exposure to the grocery/retail market is what's killed them. Communisis only has 4% of revenues from retail clients, so hopefully is less exposed. Still, the news is a bit worrying to be honest!
Ah yes, that'll be it, thanks Laughton. Not a dissimilar business so let's hope this is more of a stock-specific issue than an industry-wide one!!
Possibly read across from profit warning today from St. Ives (SIV)???
It's like the market has only just realized it went ex-div last Thursday!! Can't see any other news.
..a very nice move today on big volume. My target this year is still 70p. Strong buy!
So let me get this right - ST was a buyer. then we got a good set of figures in terms of growth and cash flow. So he the switched to being a seller! Can someone explain that please - I'm confused (and yes, I am easily confused...)
I agrre that this is a good looking long-term investment. It appears that the market doesn't like companies which deliver nasty surprises, so the best thing here will be a sustained period of focus on getting the debt down, fully integrating the various parts of the business, deliverying on the new and existing contracts, with perhaps the winning of one or more new significant contracts. I've re-run my take on the historic figures and projections and come up with an sp of 65p. That is not a recommendation to buy; just my views.
A big thank you to Simon Thompson for giving me the opportunity to buy some more shares in CMS at 42.6p. Well i think the shares are a good long term investment.
Simon Thompson on Investors Chronicle online gives it a SELL rating today.
....published in the Cambridge News this morning. Extract: Cambridge News March 08, 2016 Private Punter: Communisis investment could be a good call While you cannot, so it is said, "have your cake and eat it", investors attempting to satisfy an appetite for both growth and income could perhaps do worse than take a bite of AIM -quoted Communisis. At a current 46p, this provider of personalised customer communication services offers an attractive mix of solid earnings appreciation prospects, backed up by an increasingly attractive progressive dividend. And yet, despite delivering some strong numbers in its preliminary results last week, the shares trade on a single digit forward PER of little more than seven which, in turn, is supported by a yield nudging 5%. Although such seemingly cheap valuations can often imply a muddied forward picture, speaking with CEO Andy Blundell on the back of those results, it would appear Communisis is not only well placed to deliver in the near future, but also the medium-longer term. Communisis works with and for major blue chip clients across both the UK and continental Europe, where it is very much at the centre of multichannel marketing services and everything within that space. This sees the company operating three distinct aspects of its business, where each contributes to annual revenue that is now running in excess of £350m. They are Design, Produce and Deploy which collectively, via a whole raft of services, connect Communisis' numerous clients to their own existing and potentially new customers, further driving awareness and spend. Communisis provides specialist tailor-made web services, to high volume digital printing, along with data intelligence through social networking and content management. However, despite last year delivering pre-tax profits of £14.5m and doubling of free cash flow to £12m, the shares are extremely cheap, trading at half the value of peers. Such apparent investor indifference to a seemingly stark value situation is no doubt in part due to a profits warning late last year, after an acquisition underperformed. This came in the form of Life, a shopping marketing consultancy which, having been acquired less than 12 months earlier, was revealed to be taking longer than envisaged to contribute to the wider group. But, Communisis was quick to renegotiate the earn-out agreement which, combined with the more important wider positive group prospects, may suggest that it really is only a matter of time before the shares benefit from an overdue re-rating... ...Broker Liberum sees net debt reducing to £32m for the current year, dropping to £24m by 2017. The same broker is also pencilling in revenue of £372m and adjusted pre-tax profits of £16.2m for the year in progress, increasing to £387m and £17.5m for 2017. Those numbers would deliver fully diluted EPS of 6p and 6.3p respectively, which sees the stock standing on a si
...with 5.18p EPS up 12% on last year, and nice to see the share price responding on relatively small volumes - perhaps any overhangs have finally disappeared. Liberum have a 72p target and Finncap a 65p target, so plenty of upside from the current 45p. Finncap were almost spot on with their forecasts, including the 2.2p dividend, and H2 showed good movement in the net debt, though the pension deficit has increased slightly. With "75% of revenues" "underpinned by multi-year contractual arrangements" lasting on average 5 years, CMS should be in a good position to thrive. EPS grew 21% (before currency movements) despite a low contribution from Life and despite there being a small amount of extra shares in issue resulting from the Life acquisition. This suggests the existing business grew by c.20% in the year. So far in 2016 the fx rates have moved strongly in the company's favour. A repeat of the 2015 underlying growth this year would mean eps growth in 2016 could be higher than the current broker consensus. Life should also contribute more. Good to see a Printweek article confirming that currency movements will help CMS this year: http://www.printweek.com/print-week/news/1156208/communisis-sales-top-gbp350m More coverage and comments from AB here - looks like the EU referendum might provide a short-term boost for this H1: Http://www.yorkshirepost.co.uk/news/big-client-deals-and-international-work-send-communisis-back-to-black-1-7770863 Extract: "Communisis CEO Andy Blundell said growth is coming from new contracts, the renewal of big existing client deals and international growth. “Five years ago we had no business outside the UK. Now a fifth of our sales come from abroad. We have gone where clients want us to go,” he said. “We operate in Paris, Madrid, Rome and Frankfurt. Warsaw is emerging as an important staging post. Turkey is a good market for us and we’ve just opened in Dubai. Firms like Procter & Gamble want their marketing services managed on an international basis.” He estimates that international operations could provide a third of total revenue over the next two to three years." "“We hope to do work for the upcoming EU referendum.”
I guess it's the debt which they seem to struggle to get down. OK, I know that debt is cheap but one day it might not be.
...why the market has a such a downer on this stock for the last two years. Growth rates have been consistently positive ,dividends pushed higher, all combined with a single digit PE. Debt levels have been rising based on investments to cope with new clients, but improving Free cashflow should see that start to fall. Other thing often mentioned is the weak Euro - well guess what? The euro is up against the £ by more than 10% over the last 3 months, so even that trend is now going for the Company. Clearly the market is only going to change its view slowly on this stock, but hopefully, she'll be a lovely slow burner for 2016!
One of Simon Thompson's favourites so expect a SP moving update from him in the IC in the next day or so. Numbers look good to me so happy to keep holding if for no other reason than the very nice dividend.
EPS of 5.18p announced today (plus doubling of free cash flow). Maybe I should go into stock analysis full time...!!
...an by 'onions', I of course mean 'apples'....doh!