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Synthomer Plc (SYNT:LN) (SYHMY) PT Raised to GBP3.75 at Berenberg
Quote from RNS:
“Continuing Group volumes were at their highest levels since Q2 2022.”
This sentence alone will send us to 450 by end of May. I know ridiculous statement but let’s wait and see.. counting down 15 trading sessions to go….
Hi GMHK - I don't really know what price to expect for Synthomer in the short term. I can't give you a number. If I had to - I could only give you a range - say 250p to say 350p. There is no calculation behind this, no chart, just a guess.
Like you I am an original (pre RI) holder of Synthomer but I buy shares only on a long-term basis. I have various criteria for my investments including that I hold a limited number of investments (currently 8 shares) and I invest in established technology companies e.g. in Pharma, defense, and precision instruments. Synthomer was my chemical industry choice. I chose them because I felt their planned product focus was interesting, and my very basic research indicated they were key players in several interesting continuing markets. However, and maybe like you, I underestimated the impact of the Eastman purchase - its timing, the price paid, the operational issues etc. I now consider Synthomer a "good" investment - for which I have unfortunately overpaid.
I have of course bought more shares in Synthomer through the RI and after, because I still believe in the company. I believe the shares have a large upside potential but accept that this will not happen until volumes return to the chemical sector - and if that does not happen in the next few years, Synthomer could be in trouble again. But as far as I can see the management are cognisant of the risks and have taken reasonable steps to cover them and prepare the company for the upturn. To me the risk reward outlook is favourable particularly if they can sell more non-core operations.
Lastly, as to a future (mid-term) share price - again I don't have a calculated timeframe or number ... but as an indicator ... I am expecting a wait of say 2 years (+?) - I don't see economies improving in a shorter timeframe - and a price north of £7 (back of the envelope calculations based on previous share prices, information in the RI documentation and competitor share prices - all very rough stuff) as indicators.
Regards
I guess, it’s stock market.. sometimes there are things you can’t justify or explain. Technical analysis is kind of art in itself.
Hope it gets to your 750p target at some point 🚀🤞
GMHK - you stated you were confused why people were selling. The simple answer is that at a higher price/valuation the stock is closer to people’s targets. So it’s really not that confusing, is it? While I can understand holding while a stock reacts to a new and more positive data point, I really can’t see anything more positive in todays update that justifies moving your price target from 350 to 450. But hey ho, to each their own… I have a 3 year price target of 750p+, if it gets there quickly I’ll be very happy. ATB
Why didn’t I own more shares? Lol.. since I pumped just over £75k early Feb having suffered 95% unrealised loss on my initial £25k investment, I guess my current holding of 54k shares with average of 185.92 is more than I was comfortable with at the time. Feel free to look at my history. I’m over 50% up and still not planning to sell a single share as none of my price targets have been hit pre trading update. My target of 350 from last month is no longer valid though. My new target is around 450p.
You might be tempted to sell at current level but I have a lot of patience, time and I’m happy to take a risk.
Well I still have most of my position, so I expect it to go up. But my confidence it will rise materially on the back of this update is lower than after the prior update because 1) they have not detailed anything that gives rise to believing the earnings outlook is either improving in terms of level or quality, versus the guidance given before… 2) the valuation has doubled already off the lows… 3) broker targets are no longer guiding to a doubling of the share price… surely an equally valid question is - given we have been presented with the same vaguely optimistic guidance as at the last update, why didn’t you own far more shares lower down when the valuation was cheaper, such that now you would be willing to sell because the valuation is demonstrably more expensive?
I’m kind of confused why would anyone want to sell this rough diamond? We’ve just had a vague but still “cautiously encouraging” trading update and we might be knocking on the ftse 250 door pretty soon. I personally don’t think we need anything else for it to fly.
WW and FS, what would you expect SYNT to do next..purely from chart standpoint?
I agree largely with the two recent comments from Wigwammer and GMHK. As indicated in this update and recent competitor comments, the chemical market seems to continue plodding along the bottom - with some small positive indicators but no visible signs of any substantial improvement. Much the same as in the last update.
The recent debt refinancing puts the group in a better position to implement their announced business strategy - which from public statements seems to me to be in process - and puts the business on a firmer mid-term financial footing. But absent of any new announcement e.g. of a substantial disposal of a non-core business, I assume, subject to emotions and short term trading activities, there is no cause to expect any substantial upward price movements - although given that I am still heavily under water I would like very much to be proved wrong on this assumption.
Hmm. I’ve taken some off the table this morning. Last update gave clear indication of fundamental stabilisation and improvement, and pointed to impressive product mix. This one doesn’t add to that, and I see broker targets are coming in around the 260p mark so may drift. Valuation remains highly attractive medium term though IMO … ATB … ps see at least one of our eminent PFC holders has done another bit of “post event” trading. Will it ever stop?! .. :)
This is the sort of trading update I wanted to see.. vague with no monetary specifics. Let’s roll towards 400p 🚀
Casino closed for the day. If you haven’t decided to buy/sell today, then you missed out.. either on opportunity to sell at this high level if the price dives, or opportunity to buy at this low level if the price sky rockets in the morning. It’s a roulette 🫣 🧨
I’m actually content with the fact the price stays below 300 into trading update tomorrow. At least I don’t have the urge to sell today as opposed to the situation had we reached 320 before TU. would have been a difficult decision to make.
We’re in an uptrend and not reached any of the key price targets yet. Fingers crossed for tomorrow 🤞🤞🤞
I’m full of hope
Just reviewed a list of the largest companies in the U.K. by market cap and it appears SYNT sits at 210th place according to the website provided below and as far as I can see, at the moment, it’s not part of ftse 250. Including ftse 100, that means SYNT isn’t part of the largest 350 companies in the U.K.? Meaning it doesn’t have access to institutional investments. I’m considering the huge potential SYNT has when it moves up to the prestigious league ⬆️
https://companiesmarketcap.com/united-kingdom/largest-companies-in-the-uk-by-market-cap/?page=3
Does anyone know whether this SYNT trading update is audited or not?
Touched the 3 pound....hopefully we break through.
Miri seems cheap now, good moment to buy, if it is like Synthomer, it is better to wait till a month or 2 after fund raise. And let's hope Synthomer does well on Thirsday, can't wait...
I need to admit.. you created a bit of a hype around MIRI. I got burnt long time ago on a small cap and decided never again will I touch companies below 100m in market cap. Hardly any TA strategy work on those small companies.. and they are cash thirsty.
SYNT is doing well and resisting to go anywhere near the sell button. As much pain as it was up until Feb this year, the strategy and patience is paying off.
SYNT is doing well, but wow.. have you seen OXB Oxford biomedica? The magnitude of the pump is astonishing 🤩 it was on my radar for ages but chickened out and never bought it.
Sorry I meant to post that message last night but got distracted with to many other things :(
Hi GMHK,
It is what it is, a cash raise was always there in plain site.
The price & timing are appalling & make no sense neither does issuing another near 100M to extend it.
I've had a busy morning lots of phone calls & I'm not letting it slide, they've made a big mistake, watch this space as they say.
SYNT is treating you well at the moment :)
LOTM
I'm truly Sorry to everyone who has bought in recently, following me highlighting the company & asking people to take a look at it.
Yes I did know a fund raise was a possibility, but I didn't see it coming so soon & its slightly larger than the £5M max requirement that I thought they might needed.
The issue price is a disgrace quiet frankly, if that's the best the company can do with the pipeline of opportunities it has & all the hints its been giving through informal channels. The CEO has a lot of explaining to do & his position is in Jeopardy for sure after this, if not untenable.
Again my sincere apologies to everyone.
LOTM
LOTM, I can’t help but to feel truly sorry for you with regards to what happened at MIRI this morning. You seem a knowledgeable person, always helpful and with great research skill.
AIM is a casino ☠️
GMHK, I've reduced MCG yet again today. It's a painful one and there's plenty of scope for further trouble down the road. Like you say, a potential exit from the 250 is likely why the shorts increased. Big problem when it's shares are so heavily ii owned.
For SYNT, the trading update has to be nothing worse than already stated. Left too soon but I'd do exactly the same again simply because there remained insufficient commercial stats to back up and sustain the current SP.
I hope you're wrong with OCDO as I bought more today. Had been waiting for 330's but bought at 343. Just felt the shorts were struggling to bring it down further despite adding. You have to think 10% plus will be short volume there now. Crazy how OCDO goes through these ebbs and flows. Whilst you might never catch the bottom, this seems to provide 2 or 3 opportunities a year.
Keeping an eye on FRES again if it goes sub 500.
JW, I still haven’t averaged MCG as I have a feeling, by looking at its market cap, it might exit ftse250 early June which would make it vulnerable to sell off.
On the other hand, I’m expecting SYNT to enter ftse250 potentially early June too but that obviously depends how good/bad the trading update will be.
Similar with ocado.. I can see one more dump towards 280. If that happens, I’m going to 1.5x my current holding to bring my average to more manageable level.
Questionable sale of assets but anyway.. I’m expecting algo game in the run up to trading update on 9th May (4 full trading days). I think I’ll exit before TU but that very much depends on price action. If we stay below 300, I’m not selling. Will wait patiently and see what this beauty has to offer 🫣
I guess this trading update will be unaudited so likely see more positives than negatives.
Good luck to all the brave holders 🤞
Completion of it divestment of latex compounding for 27,5M. Hopefully the expectations are not to high for next week... or we can go down a little....