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that is what i have payed
big trade.....
What to do ... flog the lot or sit tight ...
"In addition, the progress of restructuring in Aerospace to integrate Volvo is of interest to us. Consensus, like us, looks to give management full credit for its integration plans and any delays would be a downside risk to estimates. The ongoing safety reviews on Boeing's Dreamliner aeroplane are unlikely to have impacted Aerospace production to date, as we understand that Boeing has asked GKN to maintain production rates."
He added: "Our focus for the results is on management's outlook. Jan 2013 car sales in Europe declined 9% year-on-year to all-time lows and we now expect FY13 the total regional auto production to decline -4% year-on-year(from -2 % year-on-year earlier). We believe GKN's management have already implemented most of its available cost saving measures in Europe and we look to understand how management plan to offset the likely further leg down in European demand on Driveline's and Powder Metallurgy's margins
Juho Lahdenpera at Nomura indicated that poor first half 2013 European auto demand would be likely to drive a cautious outlook for GKN. "The GKN share price is up 5% relative to the sector in the last month, which signals to us positive expectations by the market heading into the results," he said. "Although we are in-line with consensus for fiscal year 2012 and weakness in European auto demand has been well-flagged previously, the share price momentum is a slight concern to us, as car sales in Europe declined a further 9% year-on-year in January of this year, which we think will prompt a cautious outlook by GKN's management. We take a cautious view on the shares heading into the numbers."
12 Feb GKN PLC GKN Investec Buy 252.95 257.90 275.00 275.00 Reiterates SP Target 275p.
Brokers like GKN....... GKN Broker Views Date Broker Recommendation Price Old target price New target price Notes 05 Feb Investec Buy 248.75 275.00 275.00 Reiterates 01 Feb Oriel Securities Buy 248.75 300.00 - Reiterates 29 Jan Citigroup Buy 248.75 290.00 290.00 Reiterates 17 Jan Credit Suisse Outperform 248.75 255.00 255.00 Reiterates 17 Jan Oriel Securities Buy 248.75 300.00 300.00 Reiterates N@P Building Society.
05 Feb GKN PLC GKN Investec Buy 247.05 247.30 275.00 275.00 Reiterates SP Target 275p
01 Feb GKN PLC GKN Oriel Securities Buy 245.65 240.80 300.00 - Reiterates SP TARGET 300p.
UBS has reiterated its 'buy' rating for engineering giant GKN and raised its target price for the stock from 230p to 270p, saying that "life should get better" after a difficult fourth quarter.
29 Jan GKN PLC GKN Citigroup Buy 224.45 241.50 290.00 290.00 Reiterates SP Target 290p.
UBS has reiterated its 'buy' rating for engineering giant GKN and raised its target price for the stock from 230p to 270p, saying that "life should get better" after a difficult fourth quarter. The broker reckons that in six to nine months' time, European auto production growth should be positive - global production should growth would by 4.0% in the fourth quarter - and other industrial markets should also return to growth. Meanwhile, reducing integration costs at Volvo would also help.
On Quality its a good stock relative to its sector. Return on Capital 13.0 % Return on Equity 27.5 % Operating Margin 7.50 % GKN as valued by the Graham Formula Technique Based on "Ben Grahams" formula the value of this stock also has a good safety of margin. I think a good one to hold for the long term. Current Price 241.5p Mkt Cap: £4,021m Implied Valuation 389.76p (61.4% undervalued) Finally, GKN as valued by the Earnings Power Value Technique Current Price 241.5p Mkt Cap: £4,021m Implied Valuation 203.65p (-15.7% overvalued) Long term it has great upside potential and reward of dividends which are covered at least 3 times from earnings. I would certainly add more on any dips below 203p
GKN Brokers well onside............ GKN Broker Views Date Broker Recommendation Price Old target price New target price Notes 17 Jan Credit Suisse Outperform 244.25 255.00 255.00 Reiterates 17 Jan Oriel Securities Buy 244.25 300.00 300.00 Reiterates 15 Jan Bank of America Merrill Lynch Buy 244.25 280.00 280.00 Reiterates 11 Jan Investec Buy 244.25 224.00 275.00 Upgrades N@P Building society.
GKN: Bank of America raises target price from 240p to 280p and upgrades from neutral to buy.
Nomura has initiated coverage of engineering group GKN with a 'neutral' rating and 245p target price, saying that it is "waiting for the green shoots of an EU car demand recovery". "An attractive valuation is what limits underperformance from here. We would turn more positive on GKN on signs of a recovery in EU car volumes with the focus on German and UK consumer indicators and a bottoming of France, Italy and Spain."
GKN Sell 11-Dec-12 £148,584.52 Andrew Reynolds Smith 65,935 @ 225.35p
GKN: Credit Suisse keeps outperform rating and 255p target; Societe Generale initiates coverage with hold rating and 220p target.
Engineering group GKN was the largest faller in the FTSE 100 yesterday, after it warned of weakening demand in the European car market. Questor in The Telegraph writes that its shares had already been underperforming prior to the statement, as had the whole sector. Recent news flow appears to indicate that the European industrial market is sliding back into trouble. Questor last said buy on August 4th when the shares were at 210.6p. They are now 3% below this. For now, trading on a 2012 earning multiple of 8.1, falling to 7.1 and yielding 5%, Questor says hold.
Investec has maintained its 'hold' rating for GKN and reduced its target price from 240p to 224p. However, analysts at Jefferies chose to retain their 'buy' rating on the stock this morning. The broker said: "The 3Q12 IMS testifies to the challenging market backdrop and to GKN's relative strengths, allowing for seasonality, in our view. There was still, for example, good organic growth in Driveline and Powder Metallurgy. "The market may yet weaken further, but we see a good chance that Aerospace will steady group earnings in FY13. We believe the subsequent re-rating of GKN could be significant."
Investec has trimmed its target price for engineering group GKN after its Driveline division suffered from a worse-than-expected weakening in automotive demand and associated operational issues. Revenue in the third quarter came in at £1,608m compared with Investec's £1,637m estimate, while the 7.1% missed the 8.2% forecast, mainly due to Driveline. "Weakening demand in European automotive markets and fluctuating demand in India (OEM strike) and Japan (OEM product weakness). Also, seasonality in Getrag (acquired in 2011) was greater than expected," the broker said. Investec said that it is thinking about cutting its full-year profit figures by around 5-6% to reflect ongoing weakness in automotive which implies an operating profit of around £530-540m, compared with the current £567m estimate.
GKN: Jefferies maintains buy rating and 275p target...............
Positive Points: Strong automotive demand in the US and China and ongoing growth in civil aerospace continues to be reported. Despite weakness during the third quarter overall, in September, GKN Driveline's margin returned to more than 7%. Management noted that “we continue to focus on driving performance, keeping close control of our cost base." GKN's Volvo Aerospace acquisition will help the engineering group to benefit from global growth in airlines’ aircraft orders, boosting its exposure in civil aerospace. The deal extends GKN's manufacturing capacity in the high-value aerospace engines market. In 2013, the first full year of ownership, Volvo Aero's contribution is expected to be earnings enhancing. The performance of GKN Land Systems may benefit long term from expected strength in agricultural equipment markets. A progressive dividend policy has to date been pursued. At the half year results, a 20% hike to the dividend was reported.
Negative Points: Whilst the fourth quarter is anticipated to show the usual seasonal improvement, the softening in markets, particularly European automotive and industrial markets, is expected to have some impact on performance. During the period, group trading margin reduced to 7.1%, largely as a result of lower profitability at its Driveline business. This arose due to the expected seasonality in the Getrag all-wheel drive business and costs associated with fluctuations in demand. In the final quarter of 2012, its latest acquisition, Volvo Aerospace, is expected to achieve a profit from its trading activities but have a negative impact on GKN’s reported profit due to integration costs and acquisition accounting adjustments. In addition, the group has exposure to pressured military aerospace spending. Adverse currency translation impacted across its divisions during the period. The multinational company is exposed to currency exchange rates and raw material prices. GKN faces risks from volatility in vehicle production, continuing pricing pressure from car assemblers and warranty claims. GKN operates a number of defined benefit and defined contribution pension schemes together with retiree medical arrangements across the group. The deficit of all schemes at 30 June 2012 was £926 million, a £58 million increase over 31 December 2011.