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Http://www.whatinvestment.co.uk/jupiter-best-uk-small-caps-investors-today-2553889/ "19 Jul 2017 James Zimmerman, who runs the Jupiter UK Smaller Companies fund has revealed the UK small caps on which he is keen to invest right now." "The second stock he mentioned is Somero Enterprises. He said, ‘Somero Enterprises, which is up 128 per cent in the past twelve months, (is) a US-focused manufacturer of concrete levelling machinery, was also among the strongest performing positions over the past two years. Somero has a 99% market share globally in the leading concrete-laying technology, and after recently meeting with the company in Florida, I was impressed by the strength of its ongoing new product development, as well as the strength and longevity of its customer relationships with contractors that buy its equipment both in the US and the rest of the world.’"
Excellent trading update today, with SOM now definitively trading in line with expectations: Https://www.investegate.co.uk/somero-enterprises--som-/rns/trading-update/201707180700073071L/ Strong June trading and a good outlook going forward all bode well. All areas are now trading well except the Middle East - and China appears to be rebounding strongly. Very bullish outlook statement: "Jack Cooney, CEO of Somero, said: "With improved margins and positive cash flow generation, momentum in H1 2017 has continued and we are particularly pleased to see that our customers anticipate a high level of activity going into the second half of the year. We look to the period ahead with confidence and this is reflected in the Board's decision to pay a special dividend as announced in our previous trading update."
Http://www.aol.co.uk/money/2017/06/06/three-top-small-caps-for-bumper-dividends/ "Small-cap Somero(LSE: SOM) offers a 7.1% yield this year, courtesy of a special dividend. Its concrete-laying machines create the best surfaces in the business. This exceptional quality has attracted a star-studded client list, including Walmart and Tesco, who include Somero products in planning specs to ensure the floors in warehouses are flat and strong. The boom in North American construction and online retail over the last five years or so has propelled operating profit from $1.4m in 2012 to $21.2m in the same period. Shares in the company dipped slightly earlier this week after the company reported a flat Q1 in North America. This market is all-important to the company and accounted for 71% of its revenues last year, but the sector looks healthy enough. Somero trades on a PE of 15 and yields over 7% this year, returning to a more manageable 4% next year. With a $12.7m warchest and a base dividend covered four times by last year's free cash flow, Somero surely looks attractive to income investors."
. . . Also with continued GBP weakness it remains a takeover target.
Slightly mixed trading statement. Flat sales in the USA and China, growth in Europe in the Middle East, overall in line with expectations. I think the market wanted more here so short term traders have taken profits and maybe the market is trying to take out some stop losses. On the credit side: confidence for the future, a large expansion of headquarters to facilitate growth and a special dividend. Cash rich. On balance this sounds like a long term hold to me. I expect this company to continue to grow as it invests in selling and exploiting its patented technology outside the USA. So I expect this to bounce fast and reach a new high in the coming weeks as the market absorbs the news properly.
Finncap have increased their target price to 350p today (from 325p). Looks like a few nervous nellies taking profits and concentrating on the historic hiatus in the USA rather than the overall context as I posted above - volumes are small and the MMs are taking advantage. It wouldn't surprise me to see a decent bounce.
- trading in line with market expectations for the year to date - and a whopping 10p+ special dividend for holders on 28th July And this achieved despite weather-related delays in the USA and slow growth in China! Strong European trading and elsewhere has driven the growth. With the USA and China recovering, prospects remain good, reflected in the special dividend, the additional HQ expansion and the growing cash pile.
Thanks NigWit, good to be on board. Hopefully Trump won't get impeached and calm will be restored over the pond..
Welcome Rich62! I agree and since the company is listed in the UK but makes it's money mainly in USD GPB weakness today may help it bounce. Trump will get over things and, although I am not sure that this is good for the world, it may help this share continue upwards.
Bought some this morning at £2.945 following on from drop - concerns about US / Trump?? Drop over done Imo. Good company generating good profit and dividend. Been on my target list for a while.
Thanks, Rivaldo. I'll do this too and will report on any success.
Hi squifi You are most welcome and I shall be interested to hear if you do resolve this tax issue since it's a loose end I'd like to to tie up eventually.
Http://www.fool.co.uk/investing/2017/05/08/2-under-the-radar-growth-stocks-with-huge-upside-potential/ "2 under-the-radar growth stocks with huge upside potential Ian Pierce | Monday, 8th May, 2017 Ensuring concrete floors are laid laser-level is not the most exciting business in the world, but shareholders of Somero Enterprises (LSE: SOM) certainly don’t care because they’ve seen the value of their shares grow over 1,300% in the past five years alone. And with a major competitive advantage over rivals, a huge potential market size and very capable long-standing management team the future is bright for this fast growing small cap. The key to the company’s success lies in its revolutionary Laser Screed machine it patented in 1986 that ensures concrete floors are laid incredibly level. This may seem mundane but it is critical for the warehouses of end users such as Amazon, Wal-Mart and Tesco as it increases efficiency, lowers maintenance costs and lessens the risk of catastrophic failure such as huge shelving units falling over. Having pioneered this technology, Somero has built upon its first-mover advantage by continually inventing and patenting better machines and promising customers 24/7 global support from engineers in any major language as well as on-site training and next day in-person support across the globe. This has made the company the Rolls Royce of concrete levelling and built it a huge moat to entry against competitors that has stood for over 30 years. The growth prospects for the business are also quite impressive. In 2016 $56.6m of the company’s $79.4m in sales came from its home territory of North America and even in this relatively more saturated market the company increased sales by 15% year-on-year. With sales in other huge markets such as Europe and China accounting for only $8m and $6.4m in sales in 2016 it is clear there is space to grow many times over as the company brings on new sales staff to target these regions. While investing in AIM-listed small caps can be worrying for some investors, Somero’s corporate governance mechanisms and its CEO, who has been at the helm for 20 years of rapid but sustainable growth, reassure me greatly. There’s also the company’s healthy balance sheet with $20m in net cash, EBITDA margins that rose to 31% in 2016 and continued focus on prioritising customers rather than short-term investors. Add in a sane valuation of 14 times forward earnings and a respectable 2.77% dividend yield and Somero is a company I believe has great prospects."
Hi squifi. I hold my shares through Barclays, and 30% is ALWAYS initially deducted from my dividend receipts. However, once I get in touch with them to query it, Barclays then contact the authorities, and via some sort of reciprocal agreement they then repay me 15%, to leave me having been deducted 15% withholding tax. I would try again with your brokers.
Thanks very much for taking the trouble to reply, NigWit. It's helpful to know that at least the Halifax is consistent. My Somero shares are in an ISA and so I guess, proportionally, I've got more to lose. I'll have a go at Somero and CREST if I can find a suitable contact. Reading a bit about the W-8BEN form it seems that the payor should be the organisation to receive the form. I would have thought that this was Somero, though I guess it could be CREST if they are handling the tax business. I'll see if one or the other is interested in receiving the form from me! I won't be holding my breath. I'll post any success I have here.
Squifi This isn't an answer to your exact question but I hope it helps anyway. I had the same conversation with Halifax and then exchanged emails with Somero, who were unhelpful in a helpful sort of way. Then I spoke with my tax accountant who told me it wouldn't matter because, since the U.K. and USA have a dual taxation agreement, I can only be taxed on the dividend in one country and had I not been taxed in the USA I would have been taxed in the U.K. So my loss is any difference in tax rates, which is a few percent and that I'll never get it back. I'd like to find a better but since my SOM shares aren't in a tax-free ISA there doesn't seem much point. I'm not sure this makes it right though.
My first post. I hold Somero share through Halifax online share dealing. As instructed by Halifax I completed a W8-BEN form to avoid US withholding tax. In spite of doing this, Halifax did not implement anything and my recent dividend payment was reduced considerably. I contacted Halifax my email and they said that the dividend for Somero is not eligible to receive the reduction in withholding tax which is covered by the W8-BEN, as this stock pays its dividends via the UK settlement market,(CREST), which allows for the dividend to be re-invested (foreign settled stocks cannot be automatically re-invested). The exchange rate used on the day was 1.3075 USD to GBP, however the 30% deduction at source meant that the recent dividend of 8.6 US cents equated to 4.603 pence per share by the time it reached my account. My question is: do other PIs here hold shares with other share dealing companies (i.e. not Halifax) who are able to sort this out for their investors through receipt of a W8-BEN form?
This should bring in some more interest: http://www.aol.co.uk/money/2017/04/29/two-high-growth-stocks-id-buy-in-may/ "Somero Enterprises With President Trump looking to spend $1trn on infrastructure in coming years, I reckon I've found the perfect under-the-radar business to capitalise on this building boom. Somero Enterprises (LSE: SOM) specialises in producing laser-guided equipment that assists in the installation of concrete slabs. Somero's equipment and technology ensures a high level of precision in concrete surface flatness, resulting in the faster installation of each slab at a lower cost. Although the company has operations in Europe, China, the Middle East and Australia, the bulk of the its revenues are generated in the US. The laser specialist's shares have surged higher over the last 12 months, rising over 100%, and it's not hard to see why when we examine the numbers. Somero generates a high return on equity (33%), a high operating margin (27%), strong cash flow and has minimal debt. Revenue has increased 76% over the last three years and earnings per share have risen from 13 cents to 28 cents in this time. 2016 results announced in March were excellent, with revenue jumping 13% and profit before tax increasing 22%. However despite the impressive numbers, Somero trades on a forward looking P/E of 15.3, which seems attractive for a company that should enjoy tailwinds from Trump's infrastructure boom. A dividend of 2.6% is also on offer, further sweetening the deal."
NM.
News of the opening of SOM's first training facility. What's really interesting is that it costs $649 and gives rise to American Concrete Institute (ACI) certification. I imagine this will be pretty profitable, and it also gives rise to an additional revenue stream which further counters cyclicality: Https://www.somero.com/2017/03/27/somero-open-first-kind-concrete-training-facility-fort-myers/ "Somero to Open First-of-its-Kind Concrete Training Facility in Fort Myers Posted March 27, 2017 in News Bryan Birdwell to Facilitate Exclusive ACI Certification Training Fort Myers, FL – March 27, 2017 – Somero Enterprises, Inc., a leading manufacturer of technologically advanced concrete placing equipment and associated machinery, is opening a custom-built 6,300 sq.-ft. facility to support its pioneering Somero Concrete Institute (SCI) training programs. Marking the launch of the facility are the first-ever sessions of a new program that will earn industry professionals their American Concrete Institute (ACI) certification. Facilitated by 25-time Golden Trowel Award Winner, Bryan Birdwell, the comprehensive ACI program includes everything professionals need to receive the ACI CFTM-P certification. The two-day course will be hosted April 24-25 and April 27-28, 2017, at the Fort Myers facility. “This is the first time that we’ve offered a general interest course for industry professionals through the Somero Concrete Institute,” said Howard Hohmann, Executive VP of Sales. “There’s a severe shortage in trained finishers across the industry and this is one of our initiatives to help bridge the gap. The combination of our new facility and program offerings truly takes our training capabilities to new heights.”.... ....In addition to the product training and ACI programs hosted at the SCI facility, Somero also offers onsite training across the globe through its skilled team of field technicians and runs a Concrete College in Shanghai, China. “We’re constantly speaking with our customers and industry professionals to learn what support they need for continued education and success and the ACI certification was at the top of the list,” said Lee Knuuttila, U.S. Field Support Professional Manager. “The program is a nice complement to our Laser Screed product training that is jointly held at our global headquarters.” The ACI program costs $649 per participant and includes the exam and CP10 book. For complete curriculum information and to register for upcoming sessions, visit Somero.com."
Some rise from som!! How much longer can it go?! Mcap is now £180m
Http://www.fool.co.uk/investing/2017/03/28/should-you-buy-these-2-top-takeover-targets-while-theres-still-time/ "Since Donald Trump’s surprise election win, shares in small-cap laser-guided equipment manufacturer Somero Enterprises (LSE: SOM) have been on something of a roll. Priced at 173p on November 9 — the day after the vote — they’ve since climbed to 300p (+73%) following encouraging comments regarding infrastructure spending from the new president. Given that the vast majority of sales comes from the US, this kind of reaction is hardly surprising. But it’s not just political influence that should make Somero’s stock more attractive to deep-pocketed competitors. Its most recent set of annual results confirmed that 2016 had been an “exceptional year” for the company. Thanks to six of its 11 geographic markets growing in 2016 (led by North America, Europe, Australia and China), Somero is heading towards achieving its five-year goal of becoming a $90m revenue business in just three years. In the 12 months to the end of December, revenue climbed 13% to a record-breaking $79.4m, with adjusted EBITDA rising 23% to $24.6m. Profits before tax came in 22% higher at $21.3m, with cash flow from operating activities rising 17% to $16.9m. For those who like robust balance sheets, Somero won’t disappoint here either. It had $20.2m in net cash at the end of the year — a 60% increase compared to 2015. The massive 61% hike to the total dividend over the last year is just another indication of how financially sound this business is. With its new product pipeline continuing to generate revenue growth and shares still trading on a fairly undemanding valuation of 13 times forecast earnings, I’m left wondering how long it will be before the bids come flying in."
FYI, here's Simon Thompson's tip for SOM from last week on the IC web site: "Aim-traded shares in Somero Enterprises (SOM:282p), a Florida-headquartered company specialising in the design, assembly and sale of patented, laser-guided concrete levelling equipment for commercial floors, have taken out my upgraded 275p target price ('Four trading plays', 16 January 2017), and doubled in value since I first recommended buying at 140p ('On solid foundations', 22 April 2015). The operational performance fully supports the ongoing re-rating: the company has just posted a 27 per cent increase in full-year EPS to 26.2¢, better than analysts had expected, and the trading outlook prompted analyst David Buxton at brokerage finnCap to upgrade his current year EPS forecast by almost 5 per cent to 27.4¢. As I have pointed out before, not only is the business heavily exposed to the buoyant US market - the region accounts for three quarters of Somero's revenue - but trading activity is being boosted by a combination of new product launches and a healthy non-residential construction market, both of which are supporting demand for replacement equipment, technology upgrades and fleet additions. For good measure, the company is a likely beneficiary of the Republican administration's plans to grant US$137bn (£112bn) of tax credits to construction companies to leverage US$1 trillion of infrastructure investment, and proposals to cut corporation tax to further stimulate investment spend. A key take for me in Somero's 2016 financial results was the robust cash generation which has boosted closing net funds by 60 per cent to US$20.2m, a sum worth almost 30p a share, and that's after taking into account US$4.4m of capital expenditure and the payment of US$4.2m of dividends. This has enabled the board to lift the dividend per share by 61 per cent to 11.1¢ and a special dividend is likely to be announced later this year. Mr Buxton predicts a 17.8¢ special payout in addition to the normal dividend announced, implying the shares offer a prospective dividend yield of 8.4 per cent. That's attractive as is a cash adjusted forward PE ratio of 11. In the circumstances, I have raised my target price from 275p to 325p to value the company on a more reasonable cash adjusted PE ratio of 13. Buy."
Yes nice to get in ahead of Mr Burns :-)
Good to see the Naked Trader buying in yesterday (and buying SCH too, which I also own): Http://www.nakedtrader.co.uk/ "The other is the lovely Somero (SOM) . That just had to be bought - in the right area at the right time with great fundamentals. One mag today has also written a story suggesting it could be a takeover target. If they are right, I wonder whether there could be substantial upside up to 450p? Although a US share it is buyable in an ISA but some firms ask for a form to be filled out first."