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When is the exact date for the interims? is it the 13 of September? It is not clear on their website
In 2 weeks - at their pre close trading update they talked about elevated activity levels, positive momentum, healthy conditions, and a highly active US non residential market. I'm expecting good things.
Tuesday, 13 September, 3:00pm
Somero Chief Executive Officer Jack Cooney, President John Yuncza and Chief Financial Officer Enzo LiCausi will host a live virtual presentation and Q&A, following release of its interim results announcement (on Wednesday 7 September 2022).
Register here: https://bit.ly/SOM_H1_22_Results
469,661 share trade just gone through at 430p (over £2m)
Hopefully share price will start breaking north soon...
I can't find much broker coverage for Somero. Why no broker has its price target for it?
I bought in early July at 392p. After a boost from the recent Questor tip, the market now seems to be waiting for a meaningful indication of the company's near-term fortunes (given wider economic turmoil), and confirmation of the interim dividend. Seems to be a well-run company.
Have I missed the boat with this one? it came off my radar a long time ago, sadly. Need to tidy up my watchlist
Somero H1 results webinar 13th September, 3pm.
Chief Executive Officer Jack Cooney, President John Yuncza and Chief Financial Officer Enzo LiCausi will host a live virtual presentation and Q&A, following the release of its interim results announcement (on Wednesday 7 September 2022).
Register: https://bit.ly/SOM_H1_22_Results
The last trading update on 19th July was in line with forecasts, which were given as Revenue c$138.8m, EBITDA c$47.7m, Cash $39.9m.
investor presentation rns
... should be 600p imv ... I expect profit upgrade at hy ...
Not true as implied. It's actually a quote from Cape Wrath Focus Fund Manager who said it's their fair value estimate.
Fair value is not the same as market value and it's market value most investors are interested in.
DT questor has it worth £8 a share.
If "unknown" pre-8 AM transactions are traders' activity - we are not allowed to see if the trade is buying or selling although we have an idea by the movement of the share price - how come there was a pre-opening transaction of £58?
I've always believed that low value transactions were kids' accounts free of transaction fees.
big fan, it's been my best performing share and I remain convinced it's heading for a higher market given time. Lovely divi, undervalued, leader in its market, and what appears to be a well organised company, what's not to like. I had masses of these at 140 in 2015 and sold them for a pittance of profit at the time but was lucky enough to pick them back up albeit slightly higher in the covid fall. And who could have guessed that if you'd bought £1k of these back in 2008 they would be worth about £60k at the recent peak, the stuff of dreams
Questor often makes a tip and the sp shows no movement. It seems this time a big number of people accept buying into Somero is like taking Candy from a baby. No risk ,sure way to double your money. What do long term holders think,would love to hear from you VERY wealthy folk. I am serious, not jesting.
Absolutely. Seems like some of the natives have caught on today mind you!
I hold my shares in this little gem with AJ Bell in a SIPP and ISA , I just checked the last dividend payment and it shows no tax deducted and the whole amount paid as per the declared dividend . This company just churns out cash and the board are quite happy to pass it on to the owners unlike a lot of others . I see companies like Tesla with hardly any net earnings on sky high PE's and likely to be hit hard in any slowdown and it doesn't make sense.
All of this makes the valuation of 7.8 times its most recent annual earnings rather puzzling. “You could easily imagine a figure of 20 for such a stock,” Rackley says.
Why is it so low? We can in part blame the company’s low profile and its cyclical nature, tied as it is to the construction industry, notorious for its feast-and-famine nature. The market also took fright a few years ago when the weather interrupted construction projects and hit Somero’s profits and investors now seem to be pricing in a recession in America.
But Rackley says: “We are very happy holders of this stock. We have calculated an approximate fair value of 800p, compared with about 390p now. We see it as relatively low risk relative to the potential for big gains.”
In Questor today:
This week’s American company is based in Florida, has its factory there and generates 80pc of its sales in either the US or Canada. It just happens to be quoted on Aim in London.
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Somero Enterprises makes laser-guided machines that allow concrete floors and roadways to be laid with exceptional smoothness. It’s a niche market in which there are few direct competitors, so the company makes very high returns. Yet its shares trade on a single-digit multiple of earnings.
“Somero was the first to market laser screeding machines in 1986. They come into their own where there are fine tolerances – in robotic warehouses andhigh-rise buildings, for example,” says Adam Rackley, who has 6.9pc of his Cape Wrath Focus fund in the stock. “The technology also gives you a faster, cheaper floor than traditional methods can.” He says there is also a big market in roads, which are often made of concrete rather than tarmac in North America.
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The company’s aim is to keep its customers “for life” and Rackley says the small premium those customers pay for Somero’s equipment is “inconsequential relative to the cost of getting things wrong when you are laying a floor”. Its hi-tech machines need regular and specialised maintenance, which helps the company to strengthen its links with its clients. It also makes money from training customers to use the machines.
“This is repeat business,” Rackley says. “It’s not sell and forget, it’s an ongoing relationship.” It’s the kind of business model, where price takes second place to the quality and reliability of the product, that allows for high profit margins – 35pc at the “Ebitda” level in the case of Somero. The company is growing through the introduction of new products and by expanding into areas such as Australia. But it is striking that its expansion has been almost entirely organic. “It has resisted the temptation to make acquisitions,” says Rackley. “This makes sense given that it has the strongest brand in its field – buying Somero is like buying IBM.”
Two consequences of its aversion to acquisitions are a strong balance sheet and clean accounts, which tend to get complex when matters such as the “goodwill” involved in acquisitions have to be accounted for. “The accounts have very few exceptional items and the company has a policy of maintaining a big net cash balance, which it adds to every year,” Rackley says. “The management team is extremely conservative.”
Once it has topped up its cash, anything left is used to supplement the ordinary dividend with specials or “modest” share buybacks, he adds. Cash flow is good – 80pc to 90pc of profits are converted into cash, depending on the measure used – partly thanks to the relatively low need for capital expenditure. But returns on capital are truly exceptional: 65.8pc last year and an average in recent years in the mid-to-high 50s. Questor can recall only one figure higher among the stocks we have tipped.
Not only that, this is a little magic cash generator and they give excess cash to the shareholders - just look at the special dividends over recent years.
Yes reads well to me, inline & potential for upgrades. Though if it sustained revenues/ earnings at these levels for the next 10 years I'd be delighted on the current multiple.
Very quiet on this board, but seems to be a good update given the macro picture economically!
Even more belated reply!
The link posted suggests that A J Bell is one of the "Brokers that can get US dividends paid gross into their SIPPs".
I have just asked AJB to confirm this and they replied "We are unable to pay gross dividends on international stocks. You are liable to Witholding Tax as the company (Somero Enterprises) must withhold the tax at the time they pay the income to a foreign shareholder." (I have a W8-BEN).
Just wondering if anyone is holding SOM in a AJBell SIPP that could confirm this.
Interesting RNS just out - Cannacord Genuity (Vancouver) who previously held approx 10% stake in SOM, have now started to add again. Taking holding up from 4.98% to 5.74%.
Note they off loaded their 5% stake around 18 weeks ago when price was pushing 600p.
Must now be able to see value again at less than 400p...!!
Previously when i held with iWeb Som dividends took ages to show up