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Buying coming in at 578p now, and more new highs.
Happy New Year to anyone else who happens to alight on this very quiet thread :o))
At 28th November per DSCV's web site they had 3,242,721 shares. Now they have 4.479,425 shares and have gone above 5% so have had to declare for the first time.....
Https://www.investegate.co.uk/discoverie-group-plc--dscv-/rns/holding-s--in-company/201912230926488154X/
and buying coming in at the full 568p offer.
Nice comment about the company's aim being to double revenues and EPS in the next 4 years or so - as they have already done in the last 5 years.
and about "strategy, focus on growth markets and future acquisitions":
Https://www.proactiveinvestors.co.uk/companies/news/909101/discoverie-group-ceo-talks-strategy-focus-on-growth-markets-and-future-acquisitions-909101.html
Excellent - Panmure Gordon have initiated coverage, with a Buy and a 615p target:
Https://investing.thisismoney.co.uk/broker-views/
Tipped on the Master Investor web site featuring Peel Hunt's increased 650p target price:
Https://masterinvestor.co.uk/equities/small-cap-round-up-featuring-capital-drilling-discoverie-augean-and-more/?utm_source=Daily+Bulletin&utm_campaign=f91fc88956-Daily_Bulletin_20191128_COPY_01&utm_medium=email&utm_term=0_25eff0bb7f-f91fc88956-34898813
"discoverIE Group (LON:DSCV)
The customised electronics designer, manufacturer and supplier announced, on Thursday, its interims to end-September.
They recorded a 10% increase in revenue to £232m and pre-tax profits of £10.4m, which was up an impressive 33%.
Earnings at the halfway stage were 28% better at 9.1p per share, while the dividend was raised just 6% to 2.97p a share.
At the period end the group’s order book stood at £153m, which was up a healthy 15%. The group stated that it is trading in line with market expectations for the full year.
In early August I profiled the company at 438p and set a 550p target price by the end of next year.
After the results I was pleased to see that broker finnCap has upped its target from 535p to 579p. And even more so to see Peel Hunt increasing their sights from 530p up to 650p.
The shares close the week trading at around the 550p level, so I am obviously very pleased that my target price has been scored so soon."
New highs now - and here's the full IC tip:
"discoverIE (DSCV) secured two-thirds of its half-year revenues from its four target markets: renewable energy, transportation, medical, and industrial and connectivity. The electronics group’s design and manufacturing division is thriving in these spaces, providing more than 90 per cent of its design wins.
Three years ago, less than half of its turnover was derived from these markets. The group’s exposure to areas that are being “driven by structural changes” such as renewables, in the words of chief executive Nick Jefferies, have hardened discoverIE’s resilience to a turbulent industrial backdrop, as well as boosting its growth rates.
The remaining, non-core third of the group’s revenues are exposed to more cyclical industrial markets, Mr Jefferies admits. Custom supply work in the UK and Germany was slow. This vulnerability looks set to reduce, however. Given the trajectory of its design wins, discoverIE’s target markets could provide over 80 per cent of its turnover in three-to-five years, its chief executive contends.
The group raised £60.6m in proceeds from two placings over the period, which helped to support £74m in expenditure on three acquisitions.
House broker Peel Hunt forecasts full-year 2020 pre-tax profits and earnings per share of £33.1m and 29p respectively, rising to £37.9m and 31.7p in 2021.
IC View
With one eye on the future, returns from the group's investment in transitional technologies mightn't offer yields in line with traditional industrials, though they could represent a better long-term bet. discoverIE’s strategy is enabling it to successfully manage down its exposure to an industrial downturn, which is consuming peers like Gooch & House (GHH). The shares are already up on our October buy tip, and we think this stock remains a sensible defensive industrial buy."
Tipped as a Buy in the IC - subscriber-only unfortunately:
Https://www.investorschronicle.co.uk/tips-ideas/2019/11/28/discoverie-strengthens-target-markets/
More detail on the Peel Hunt upgrade to 650p:
"DiscoverIE Group's results for the first half of fiscal 2020 show the extent to which the company's strategy has matured, Peel Hunt says. The U.K. supplier of customized electronics continues to deliver steady organic growth against a tough backdrop, Peel Hunt says. This places DiscoverIE alongside industrial companies such as Spirax-Sarco Engineering, Halma, Oxford Instruments and Diploma as players in the sector that have shown high levels of resilience in these markets, the brokerage says. Peel Hunt raises its target price to 650 pence from 530 pence."
Nice - Peel Hunt has hugely increased its target price to 650p (from 530p) and says Buy:
Https://www.investegate.co.uk/News/broker-forecast---peel-hunt-issues-a-broker-note-on-discoverie-group-plc/868012/
Excellent interims as flagged - everything is nicely on course, high margin D&M work continues to rise, core markets are non-cyclical and growing, and the outlook is extremely confident:
"Since the period end, orders have continued ahead of sales, and with a record order book, a continuing high level of design wins and a pipeline of acquisition opportunities, the Group is on track to deliver full year earnings in line with our expectations."
Nice endorsement from a Fund Manager....
Https://www.morningstar.co.uk/uk/news/197104/5-minutes-with-franklin-templetons-richard-bullas.aspx
"5 Minutes with Franklin Templeton’s Richard Bullas
8 November, 2019
Richard Bullas, manager of the Bronze-Rated Franklin UK Smaller Companies fund, reveals why he likes unloved UK small-caps and a childhood dream of becoming a pilot"
"What's a stock in the portfolio you’re excited about?
DiscoverIE (DSCV), an electronics designer and manufacturer that sells its products in growing markets such as the medical and renewable energy - that gives it a great outlook. It has also a strong track record and is the third biggest holding in the fund."
Sure does and the buying looks relentless.
The re-rating gathers pace.
DSCV just keeps going up and up, I could see £6 by the end of the year. Beautiful!
Terrific close - with a final buy trade at 520p.....
More new highs, and a superb finish on Friday night.
The IC article concludes - Buy :o)) I'll just note the conclusion at this stage:
"IC View
discoverIE shares have achieved good momentum this year, but the forecast PE sits just below the peer group average. We feel the group's prospects are considerably better than average, based on the acquisition strategy, margin improvements and presence in several exciting growth markets. Buy."
with buying at 476.5p.
DSCV are a Main Tip in today's IC.....
Https://www.investorschronicle.co.uk/tips-ideas/2019/10/31/buy-into-an-exciting-discoverie/
Good info here about Jefferies' upgrade:
Https://www.proactiveinvestors.co.uk/companies/news/905550/discoverie-to-see-positive-numbers-impact-from-sens-tech-acquisition-says-jefferies-905550.html
"discoverIE to see “positive numbers impact” from Sens-Tech acquisition, says Jefferies
The US broker said the £58mln acquisition would provide “further growth opportunities in structurally attractive target markets”
discoverIE Group PLC (LON:DSCV) has made a “high-margin, strategically relevant acquisition” with its purchase of sensing and data module maker Sens-Tech, according to analysts at Jefferies as they upgraded their target price on the firm to 540p from 500p.
In a note on Thursday, the US broker, which rates the custom electronics maker at ‘buy’, said the £58mln acquisition would provide “further growth opportunities in structurally attractive target markets” as well as increasing the diversity of its business model.
Analysts also upgraded its earnings per share (EPS) estimates for the company for 2020, 2021 and 2022 by 3%, 5% and 5% respectively, to reflect both the Sens-Tech acquisition and a £33mln placing which was intended to reduce gearing following the purchase.
As a result of the new funds, Jefferies sees scope for over £40mln on the company’s balance sheet that could be used for more deals in the future.
The broker is now forecasting that discoverIE will deliver a pre-tax profit for its 2020 financial year of £33mln, up from previous estimates of £31mln, with revenues predicted to be £478.1mln compared to prior expectations of £471.2mln."
New Edison note - they note DSCV is trading at a 13% discount to its peers:
Https://www.edisongroup.com/publication/high-margin-sensor-technology-acquisition/25338/
Extracts:
"discoverIE has announced the acquisition of Sens-Tech for an initial cash consideration of £58m, partially funded by a £33m placing at 415p per share. Sens-Tech designs and manufactures specialist sensing technology and fits with discoverIE’s strategy to buy businesses supplying niche, highly customised products for critical applications. The business increases the group’s international revenues and boosts its presence in target markets such as transportation and healthcare. This is discoverIE’s largest acquisition since Noratel in FY15; we estimate the deal is immediately earnings enhancing (FY20e EPS +2%, FY21e +5%)."
"Valuation: D&M focus supports upside
discoverIE continues to trade at a discount to peers (13% discount based on FY20e P/E, 8% FY21e). Further progress in increasing the weighting of business towards the higher growth and margin D&M business (64% of H120 revenues vs 61% in FY19), combined with maintaining the profitability of the Custom Supply business, should help to reduce the discount. The stock is supported by a dividend yield above 2%."
and tipped again, with a 550p target:
Https://masterinvestor.co.uk/equities/small-cap-round-up-featuring-solid-state-discoverie-bloomsbury-and-more/?utm_source=Daily+Bulletin&utm_campaign=7dee5b5c47-Daily_Bulletin_20191024_COPY_01&utm_medium=email&utm_term=0_25eff0bb7f-7dee5b5c47-34898813
"discoverIE Group (LON:DSCV)
I see that Jefferies International have placed a ‘buy’ rating on this group’s shares, at the same time as raising their target price from their previous 500p to 540p.
That brings the brokers closer to my own early August valuation when I profiled the shares at 448p; they are now 458p. That is quite an impressive performance after the group last week announced its £33m placing of 8,034,840, new shares at 415p per share for its £58m SansTech acquisition."
The latest from Mark Watson-Mitchell in his market round-up:
Https://masterinvestor.co.uk/equities/small-cap-round-up-featuring-futura-medical-rank-group-surface-transforms-hostelworld-and-others/
"discoverIE (LON:DSCV)
Much as predicted, this innovative electronic components group is on the acquisition trail again.
On Thursday morning it announced the £70m acquisition of Sens-Tech together with a £33m Placing of 8,034,840 new shares at 415p each. That was a 3.9% discount to the closing price on Wednesday night.
The high margin Sens-Tech is a UK-based designer, manufacturer and supplier of specialist sensing and data acquisitions modules for x-ray and optical detection applications. It supplies customers in the transport security, medical, food processing and industrial markets.
This is possibly one of the group’s largest acquisitions to date. The £58m cash down and £12m on profit achievement deal looks to fit in perfectly with the group’s expansion plans. It will create further opportunities for organic growth. The Placing funds will be boosted by existing debt facilities to complete the purchase.
This deal gives investors a useful opportunity to get in some cheaper stock. Even six of the company’s directors bought more shares in the Placing.
I profiled the company in early August at 438p, with a target price of 550p by the end of next year. I remain fixed with that target.
On Friday morning I noted that brokers Peel Hunt have just increased their target from 500p to 530p.