London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Flirting with that 140p mark, thanks for sharing the article Rivaldo.
"Admittedly, a tax credit inflated last year's net earnings and this will revert to a tax charge in 2015. However, using Mr Hughes' adjusted EPS estimate of 19.7¢ for fiscal 2015, or 13.3p at current exchange rates, based on a 30 per cent corporation tax rate, still means that the shares are being priced on only 10 times cash-adjusted earnings estimates. That's far too low for a company that offers potential to beat these conservative looking forecasts if market penetration rates can be expanded in China and India, and the US economy remains in fine fettle. Furthermore, the company has no financial concerns to warrant such a low rating. In fact, its balance sheet is robust with cash balances covering almost all liabilities, so Somero is not reliant on outside creditors to funds its inventories of $8.4m; neither is the business being constrained in extending credit to clients - accounts receivables were $6.6m at the end of 2014. In fact, I feel a cash-adjusted PE ratio of 12.5 for fiscal 2015 is a fairer valuation, implying a year-end price target of 185p. That's 30 per cent above the current share price which for good measure is on the cusp of signalling a major share price break-out if it takes out the 140p all-time high from June last year. A blue-sky rally to my target price of 185p would then be on the cards, and one supported by strong fundamentals. Trading on a bid-offer spread of 137p to 140p, I rate Somero's shares a strong buy."
"In addition, the company's continual investment in capital spend on new products creates another barrier for new entrants as these new products are specifically designed and built to provide maximum productivity and operational efficiency for clients, so in effect Somero already has first-mover advantage with its patented products. Potential for sustainable growth Clearly, the construction industry is cyclical, but Somero offers the attractive combination of exposure to pent-up demand in the US for residential construction post the recession - the Portland Cement Association predict that it will take another seven years at least before output peaks there - and non-residential cement consumption which has scope to surpass its 2007 peak over the next decade. Interestingly, average selling prices of Somero's products have risen as the US economy recovers in previous cycles. Indeed, in the last economic cycle they increased by 25 per cent on average for smaller line products, and by 42 per cent for larger line products. Sales in North America rose by 46 per cent from $25.5m to $37.2m last year, but there remains substantial upside for further growth in product prices based on previous cycles and for cement consumption based on the above industry forecasts. In fact, analyst Mark Hughes at research firm Broker Profile predicts that Somero's sales from North America could hit $58m by 2018. To put this into some perspective, the company's US sales were $40m at the previous peak in 2007. Mr Hughes is also forecasting that sales in China will double over the next four years to $20m. That's hardly an unrealistic forecast given that the potential market is worth $1.2bn in annual sales, of which Somero has penetration of less than 1 per cent at present. In other words, growth rates will be determined by Somero's ability to penetrate this market rather than the market growing itself. The same is true in India where the company's market penetration rate is only 0.5 per cent, according to Mr Hughes. A fairer valuation Not only are the shares attractively priced based on last year's historic numbers, but there is a realistic chance of decent profit growth coming through in the next few years as Somero's sales pick up on the back of the key drivers I have outlined above. Broker Profile predicts that for fiscal 2015, the company's revenues and pre-tax profits will both rise by around 7 per cent to $63.8m and $13.2m, respectively. Mr Hughes is pencilling in a further 10 per cent rise in revenues to $70m in 2016. These estimates look well underpinned and so do expectations of a further hike in the dividend to 6¢ a share this year, or 4.1p at current exchange rates, implying a near 3 per cent prospective dividend yield. It could be more because analysts predict Somero's net funds will double to $14m by the end of this year, a sum equivalent to 17p a share."
"Expect these themes to continue to help Somero raise its market penetration in a country that clearly offers huge growth potential: cement consumption is around 30 times greater in China than in North America. Chinese customers also now have access to finance options when they purchase Somero's equipment which can only help sales. It's also worth noting that the company sells to concrete contractors for non-residential construction projects in over 92 countries and across every time zone around the globe. Last year, Somero reported growth in seven of the 10 geographic regions it services and that even included Europe where sales rose by a fifth to $3.6m, or 6 per cent of the total. Its Laser Screed® equipment is primarily used in the construction of warehouses, assembly plants, shopping centres, and other commercial construction projects that require extremely flat concrete-slab floors. The client base includes multinational companies such as Costco, Home Depot, B&Q, DaimlerChrysler, the United States Postal Service, and Toys 'R' Us. The company's assembly operations are based in Michigan, US, and sales and services offices are located in Chesterfield, England; Shanghai, China; and New Delhi, India. Cement consumption in India is three times greater than in North America, so to raise awareness within the industry, Somero has stepped up marketing efforts as well as attending trade shows and giving seminars for engineers and architects. Revenue from the Indian market was $600,000 last year, or 1 per cent of the company's total turnover, but this is from a standing start and the market clearly has huge potential. Patented technology It may seem hard to believe, but as the leading manufacturer of laser guided machinery used in horizontal concrete surfaces Somero's patented technology has a near 100 per cent market share. Protected by 56 patents, the company's products achieve a high level of precision in concrete surface flatness at a higher rate of efficiency than conventional methods. It's cost effective too as it results in the highest level of flat-floor precision attainable at less cost to the flooring contractor. The company's vision is for its technology and processes to be used wherever a ready-mix vehicle is discharging concrete for a concrete slab. Maintaining customer services at the highest level, and offering 24/7 aftersales support, are key to protecting this dominant market position, which explains why Somero's workforce increased from 128 to 165 last year to support the anticipated ramp up in sales. Moreover, this solid infrastructure creates an obvious barrier to entry for new competitors. That's because it would be difficult for a new entrant to replicate Somero's product offering and break into its market by using a lower product price to grab market share as it would also need to invest considerable sums in creating a similar service operation."
"It was hard not to be impressed by the fiscal 2014 results from Aim-traded Somero Enterprises (SOM: 140p), a Florida-headquartered company with a market value of £79m that specialises in the design, assembly, and sale of patented, laser-guided equipment that automates the process of spreading and levelling concrete on commercial floors. Having set its stall out last year to double turnover to $90m (£60.8m) by 2018, the company increased revenues by nearly a third to $59.3m in 2014, all of which was organic growth, and with gross margins ticking up a couple of percentage points to 54 per cent, and operating costs rising by only 13 per cent, this resulted in a 91 per cent surge in pre-tax profits to $12.4m and a 123 per cent rise in adjusted EPS to 29¢, or 19.5p at current exchange rates. Moreover, with the benefit of a capital-light business model, a high proportion of cash profits of $15m, up two-thirds in the 12-month period, was converted into operating cash flow, so much so that net funds almost doubled to $6.6m, or the equivalent of 8p a share. In turn, this enabled the board to reward shareholders with a 150 per cent hike in the dividend per share to 5.5¢, or 3.7p. The final dividend of 4¢ (2.7p) went ex-dividend this morning. On this basis, the shares offer a 2.7 per cent historic yield, and are rated on a lowly seven times 2014 post-tax earnings. A solid growth story Furthermore, it's only reasonable to expect this progress to continue in the years ahead. That's because the company has a strong presence in the all-important North American market - sales in the region increased by almost half last year to account for 63 per cent of the total on the back of robust growth in the construction industry. In fact, non-residential cement consumption exceeded the industry's original forecast of 22 per cent growth in 2014 to end up 30 per cent ahead of 2013. This positive industry backdrop, the introduction of new products - the company spends 2 per cent of its annual revenues on product development with the aim of launching one new product a year - Somero's pricing power, and a shortage of skilled labour for its customers all contributed to the jump in North American sales. The company has also been benefiting from an increasing presence in China, where sales rose by 44 per cent to $9.5m to account for 16 per cent of Somero's revenues in 2014. This performance was driven by a greater penetration rate in all regions and the broader awareness of US floor flatness standards being issued by the China Flooring Association. The evolution of the Chinese economy towards more logistics, big box retailing, and e-commerce is playing its part too as these trends are boosting demand for the speed and flatness provided by Somero equipment in laying concrete. In addition, higher wage rates are leading to greater automation in this process which increases the value of Somero's equipment."
News indicative of SOM's confidence going forward.... Http://www.somero.com/news/226-somero-enterprises%C2%AE-has-announced-the-expansion-of-its-assembly-plant-building-of-a-new-global-headquarters "Somero Enterprises® has announced the expansion of its Assembly Plant & Building of a New Global Headquarters Somero Enterprises Inc.® has announced two significant projects this week. The first is adding a 20,000 sq. ft. expansion to its already 52,000 sq. ft. assembly plant in Houghton, MI. The expansion broke ground this week and is the result of providing our customers with benefits that is expected from Somero such as: •Increased Efficiency •Enhanced Product Flow •Larger Testing Area •Enhanced Customer Experience. The project is expected to be completed in October of this year. etc"
Nice to see. Might explain the little boost always some that know when stories are coming.
SOM has apparently been tipped with a 185p target by Simon Thompson in the IC - brief extracts: "On solid foundations Shares in a maker of concrete laying equipment rate a solid buy It was hard not to be impressed by the fiscal 2014 results from Aim-traded Somero Enterprises (SOM: 140p), a Florida-headquartered company with a market value of £79m that specialises in the design, assembly, and sale of patented, laser-guided equipment that automates the process of spreading and levelling concrete on commercial floors...."
Yet still cheap imho on a P/E of only 10 or 11 ex-cash.
The new FD appointment today looks good, but perhaps also an overhang cleared this morning following that 142k trade at 133p? A few subsequent buys have had a good effect immediately.
Canaccord have lifted their price target to 162p (from 142p) and say Buy: Http://www.i3investor.co.uk/servlets/fdnews/28071.jsp With a £77m m/cap now, and being quite a success story, perhaps we might start to see more of the City start to take notice.
Seems this is going to find a new level soon.
So much for conviction then, having crunched all the numbers far better than I could beats me why he asks what readers think?
small caps expect has written a glowing review on SOM. So glowing in fact that you can tell he's really doubting himself on it (think he must have missed something) but nevertheless it's v good. http://www.stockopedia.com/content/small-cap-value-report-7-apr-2015-som-gbg-flyb-95962/
I think my prior calculation was partly incorrect. I should have used the $12.4m net income before taxes, then add back the $1.545m amortisation. That's £9.3m, or £7.76m PAT at the same 16.6%, which gives 13.8p adjusted EPS. Which is a historic P/E of just 8.9. And SOM also has $6.6m net cash (some of which is allocated for factory expansion).
I calculate around 15.9p EPS - adjusted pre-amortisation as per the usual calculations - prior to the one-off tax credit received in 2014. Adjusted PBT pre-amortisation was $16.1m, or £10.7m. Use the same 16.6% tax rate as in 2013 and PAT is therefore £8.92m. Over 56.274m shares and this gives 15.9p EPS. Very, very cheap at that rating imo.
Brilliant results from this outstanding company, absolutely thrashing forecasts - and the outlook for 2015 looks just as good: Turnover - $59.3m compared to forecast $57.9m EBITDA - $15m compared to forecast $14.3m EPS - 29c compared to forecast 26.6c Dividend - 5.5c compared to forecast 3.5c, a 3.2% yield The outlook statement in particular is really positive and excitable for this year. Can't ask for more.
And we'll overdue a little bounce, bought a few back here. Nothing more to say really, other than optimistic it's turning up.
Nice evaluation here of Somero, concluding in essence that SOM is undervalued.... hTTp://www.stockopedia.com/content/somero-good-portents-from-ashteads-q3s-and-only-on-a-pe-of-10x-growing-topline-40-93646/ This is also encouraging re the doubling in sales from the recent World of Concrete exhibition in Las Vegas.... Http://www.somero.com/news/211-somero-enterprises-inc-%C2%AE-sends-a-special-thank-you-to-all-who-attended-the-world-of-concrete-2015 "Somero Enterprises introduced a brand new booth......With this increase in visitors, we more than doubled our product machine sales from the previous year and also introduced our latest innovation concrete Laser Screed® machine, The S-485."
Ahead of expectations.......AGAIN!!!!!!!!!!!
Lovely trading update - strong recent trading means results will be ahead of expectations - so probably around 12p EPS or so: Http://www.investegate.co.uk/somero-enterprises--som-/rns/trading-update/201501200700095663C/ Plus SOM must have at least $11m-$12m net cash now against the £67m m/cap, so they're able to reduce their cost base by buying their HQ freehold for $2m. And this is a global leader now - "sales in North America, China, South East Asia, Latin and South America and Europe"....
Look at those trades!!! Big buys and sells going through....got no idea what's happening.
Today's RNS indicates the huge potential from China for SOM: Http://www.investegate.co.uk/somero-enterprises--som-/rns/announcement-re--new-office-in-shanghai--china/201412180700201398A/ I like the sound of: "we are continuing to see tremendous growth in business in China".
This reads very well: http://www.somero.com/images/SOM_20141118_StrategicGrowthPlan.pdf A very encouraging and informative summary. As well as the doubling of revenues by 2018, it's interesting to see that these forecasts are higher than the broker forecasts on Hemscott. They go for 11.7p EPS this year compared to 11.5p EPS from Canaccord, and conclude as follows: "Based on our forecasts, the company is trading on a PER of 10.3x current year numbers falling to 9.2x by 2016E. We forecast 15% compound growth in EPS between 2013A and 2016E and therefore from a PER perspective, given the upward momentum in market forecasts the shares look good value. In terms of dividend yield, the current share price offers a 2.0% yield rising to 2.6% by 2016E. We forecast 20% average growth per annum in the dividend between 2013A and 2016E. Again, on this measure we would argue that Somero looks good value."
very pleased to be in here at 113, that huge sale has actually helped me get what I think is a very good price, got a target of 145 and hoping to top up either at 122 ish or on good results whatever comes first