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Good coverage of the new Berenberg note here: Http://www.proactiveinvestors.co.uk/companies/news/188648/discoverie-shares-strong-performers-over-the-last-year-but-still-plenty-to-go-for-says-respected-german-bank-188648.html?utm_source=Sign-Up.to&utm_medium=email&utm_campaign=7163-371975-Proactivity+-+12%2F12%2F2017 "discoverIE shares strong performers over the last year, but still plenty to go for, says respected German bank 15:25 12 Dec 2017 The number crunchers at Berenberg believe the shares, currently changing hands for 363p, are worth 460p Up 60% in the year to date and 140% over the past 12 months, it would be easy to assume shares in the electronics component business discoverIE Group PLC (LON:DSCV) are up with events. But, according to analysts at Berenberg, there is still plenty left on the table for investors new to the story. WATCH: DiscoverIE is the new Acal Why? Well, the number crunchers at the German investment bank believe the shares, currently changing hands for 355p, are worth 460p. Initiated with a 'buy' rating Berenberg provided the valuation as it initiated coverage of the stock with a ‘buy’ rating. It pointed out the company, formerly known as Acal, has ‘transitioned’ in recent years from commoditised parts to a design-led approach, which has boosted the business’ profitability. Since 2011, EBIT margins have doubled to 6.2% and are on course to hit 7.5% by 2020 and 8.5% “thereafter”. However, Berenberg says there may be a way of accelerating growth via well-judged deals. Fragmented market It points out the £20bn market for customised electronic components is “extremely fragmented”, consisting of “many subscale designers that lack the distribution channels to unlock their full value”. In fact discoverIE has tapped into these sorts of opportunities already, making 13 acquisitions worth around £150mln in the last eight years. “It buys growing businesses, allowing them to operate in a decentralised structure,” said Berenberg in its note to clients. “Meanwhile, it generates revenue synergies by offering them access to its distribution network of 25,000 customers.” M&A scenario Berenberg’s M&A scenario assumes the company has access to £200mln of debt that can be deployed over the next five years, which it reckons could yield an equity value of up to £530mln. It also believes the discoverIE’s underlying markets have a number of long-term growth drivers, including increasing electronic content in products; shorter product life-cycles; and increasing industrial connectivity. “In the near term, a buoyant Eurozone backdrop, coupled with revenue synergies from new acquisitions should drive growth ahead of the broader market,” it added."
Nice - Berenberg have today initiated coverage with a Buy and a 460p target: Http://investing.thisismoney.co.uk/broker-views/ Clearly the City is beginning to "discover" (ho ho) this company as it grows and transforms. And as it does its rating will grow and improve.
Just out today FYI: Http://www.edisoninvestmentresearch.com/research/report/discoverie-group/preview/ Interesting: - DSCV trades at a 37% discount to its sector, implying a 564p share price - "using existing credit facilities to make £50m worth of acquisitions could add 20-25% to FY19e EPS" - which implies around 28p potential EPS for the year starting next April, even without any further organic upgrades
New highs again this morning, with buying at 359.95p. Nice article here: Http://www.fool.co.uk/investing/2017/11/28/one-growth-stock-id-buy-and-hold-for-the-next-decade/ "One growth stock I�d buy and hold for the next decade Royston Wild | Tuesday, 28th November, 2017 | I have long been a big fan of Acal (LSE: ACL) and, although the market has remained unmoved in Tuesday business, the company�s latest trading statement today has firmed up my bullish view. The electronics builder and distributor � which from today will be known as discoverIE Group � announced that revenues detonated 21% during the six months to September, to �190.2m, a result that pushed underlying pre-tax profit to �10.4m, up 42%. And discoverIE, boosted by a solid order book, is confident that it can continue making progress in the near term and beyond. Chief executive Nick Jefferies commented: �The second half has started well and we are on track to deliver full-year performance in line with our expectations, supported by a record order book of �111m. �Together with an increase in new project design wins of over 30%, with an estimated lifetime sales value of over �90m, we are well positioned for continued growth.� Meanwhile, discoverIE�s multi-year programme to boost margins by expanding its Design and Manufacturing arm is also delivering the goods. The company saw its underlying operating margin increased by 60 basis points, to 6.2%, during the first half. Brilliant forecasts It should come as little shock, therefore, that City analysts expect discoverIE to continue growing earnings at a terrific rate. In the year to March 2018 a 10% bottom-line improvement is anticipated. And the good news does not end here, a further 8% advance predicted for the following year. These current forecasts make the small-cap a brilliant value pick too. On top of carrying a forward P/E ratio of 14.4 times, it also boasts a corresponding PEG multiple of just 1.4. What�s more, today�s release underlined the fact that discoverIE is a growth dividend share that investors should take notice of � the business hiked the interim dividend 8% year-on-year to 2.65p per share on the back of its strong results. In fiscal 2018 the total dividend is expected to increase to 9.3p per share from 8.5p previously, City analysts are predicting, meaning that discoverIE sports a chunky 2.9% yield. And the yield steps to 3.1% for next year thanks to an anticipated 9.8p reward."
Finncap's quarterly note on the Support Services sector is out today. In it, they highlight how infrastructure will be disrupted by smart technology. They highlight six companies well placed to benefit from this transformation. DSCV is one of them (I also hold RNWH, which is another): "discoverIE, with its focus on providing innovative electronics and its design-tomanufacture capability, is well placed to help manufacturers provide the electronics needed to support Smart Infrastructure. Indeed, in January 2017 the group doubled its sensor capability with the acquisition of Variohm. Recent results confirmed that sensors are a fast-growing segment for discoverIE."
Nice �385,000 buy at 350p this morning, and moving up to new highs now at 352.5p mid-price
Quite agree - I prefferred ACAL too! True rebranding would be along the lines of "We BuyCompanies" Or WBOPS - We Buy Other People's Success then called it all ACAL. (Is that what the rebranding is; to stop people from dissecting what was bought-in and what is original organic growth? Might sound like I'm complaining, but I'm not. It's been a good performer for me.
I think the name change is a load of b0110cks personally, quite liked ACAL, which was simple DiscoverIE is not! Results are good that�s what matters really. Glad to be in here.
as follows: "What�s in a name? I wonder if shareholders were more enamoured by Acal changing its name to discoverIE (DSCV), or an 8 per cent hike in the half-year payout? The new handle is a truncated form of 'discover innovative electronics' and is meant to reflect the primacy of the group�s design and manufacturing (D&M) business, which accounts for 78 per cent of underlying profits. It�s no longer a garden variety distributor although, curiously, management opted to keep the existing trading names. Presumably, the punters are showing more brand loyalty than management. Whatever you call it, the group revealed underlying revenue and pre-tax growth rates of 15 and 23 per cent, respectively, at constant currencies. It delivered across a range of performance targets, including a 60-basis point increase in the underlying operating margin. An enhanced ability to offer customised D&M options is contributing to a sharp rise in cross-selling opportunities, reflected in an increase in new project design wins of over 30 per cent. But there is also increased commercial crossover because of a strategic focus on perceived growth areas, such as the renewable energy and medical spheres. All this contributed to a record order book of �111m � a 16 per cent increase at fixed currencies. Broker Peel Hunt forecasts adjusted profit of �23.6m for the March 2018 year-end, leading to EPS of 23.6p, against �21.5m and 22p in FY2017. IC View We�re nonplussed about the rebranding, but the margin uplift and a 2.8 percentage point increase in return on capital employed (ROCE) demonstrate that the transition to a �value added� commercial model makes sense � even if discoverIE doesn�t. Trading at 14 forecast earnings, the shares still look undervalued. Buy."
New audio interview with the CEO, who comes across very well. In particular: - D&M is now 80% of profits - Brexit will have negligible impact as (1) most products are made outside Europe, and (2) there's very little cross-border trading between the UK and the EU: http ://www.proactiveinvestors.co.uk/companies/stocktube/8421/discoverie-is-the-new-acal-8421.html?utm_source=Sign-Up.to&utm_medium=email&utm_campaign=7163-371538-Proactivity+-+28%2F11%2F2017
Excellent new interview with the CEO - sounds like more acquisition news soon: Http://www.cityam.com/276569/electronic-parts-maker-acal-reveals-its-new-name-discoverie "Tuesday 28 November 2017 12:28pm Electronic parts maker Acal reveals its new name will be DiscoverIE as business booms Acal, the company that supplies electronic components for everything from Nespresso machines to wind turbines, has announced it will change its name to DiscoverIE from today, signifying a shift in the company's ambitions. The firm began as a distributor of electronic components, but since 2011, it has been building up its design and manufacturing (D&M) business. Now, D&M makes up 80 per cent of the group's profit. Chief executive Nick Jefferies told City AM it was the right time for a rebrand to make it clear that the company has changed. "We've reached a tipping point where almost everything we do is D&M. It just felt right to make the change," Jefferies said. DiscoverIE stands for "discover innovative electronics", and the company will start trading under its new ticker, DSCV, tomorrow. Jefferies added the company plans to keep building its D&M business, partly through acquisitions. DiscoverIE typically acquires two smaller, niche electrical components firms each financial year. With one bought in January and the end of the year approaching in March, Jefferies said the company is due for another. "There are a lot of opportunities in this market place," he said, noting that markets from energy to transportation are being driven by the adoption of new technologies. DiscoverIE aims to be the company supplying the niche parts for these new technologies. The company made the announcement alongside its half-year results. For the six months to the end of September, the firm's revenue rose 21 per cent, or 15 per cent at constant exchange rates, to �190.2m. Underlying profit before tax jumped 42 per cent compared with the previous year to �10.4m. "The second half has started well and we are on track to deliver full-year performance in line with our expectations, supported by a record order book of �111m," Jefferies said. "Together with an increase in new project design wins of over 30 per cent, with an estimated lifetime sales value of over �90m, we are well positioned for continued growth." The company aims to repeat the success of the past five years by doubling revenue and underlying earnings per share."