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good RNS this stock has been undervalued for the last couple of months
Time to break out of the downward trend hopefully. Touching the top of the downward trend line.
Hi qe, the flashing dot news was a reference to a broker changing their status to a hold from a buy. Take broker rating with a pinch of salt mind. Looks a good position for entry position but worth holding cash back incase a lower position comes available.
IC could be right over some sort of decent timeframe as the entire sector is sluggish at the moment. I only looked in today and couldn't see any news other than 2 flashing red dots here later on which aren't really news about this share. Anyways made an honest crust over the course of the morning so you can't say fairer than that.
Tipped today by IC.
IC View
Cash conversion was a slight concern, reaching just 39 per cent last year. But management has reiterated its aim to improve this to between 60 and 65 per cent, particularly as demands on working capital normalise next year. The business still needs work, but now that a lot of the ugliness has made its way through the financial statements, we see the continued share sell-off as unjustified. Buy.
£35K bod buy. Probably going to see more being registered. End of day yesterday there were a lot of big trades going through.
When the company returns to profits of over £1m the sp is likely to be back to where it was at its high and that is a 60% odd increase from the current price. Loads of bod buys this year and an increased Dividend makes this extremely attractive.
IC View
We understand recent market concerns surrounding the slower growth in UDG’s biggest division, but we don’t think the extent of the sell-off is justified. Still, it produces an opportunity to buy into a fast-growing company with a rising share of an accelerating market. Buy.
Last IC View: Buy, 835p, 28 Jun 2018
Reliance on acquisitions, which has fuelled growth at UDG Healthcare (UDG), came back to bite it this year. The absence of major consolidation opportunities left management unable to raise expectations at the half-year stage, which exposed the limitations in the group's pharmaceuticals marketing division. Shareholders deemed that unacceptable – after all the company's shares were trading on 26 times forward earnings at the time.
Now the shares trade on 20 times earnings and we think investors have overreacted. Arguably, management was right to hold back on acquisitions until companies that meet their threshold (chiefly, a likely 15 per cent return on capital employed within three years) came along. Recent purchases are all highly profitable, which means profit margins are expected to expand to 12.7 per cent by 2022, from 10 per cent in 2017. Create NYC and SmartAnalyst – which were bought in July – will begin to contribute to group profits in the final quarter, meaning UDG is still on track to hit its target of 18 to 20 per cent constant-currency EPS growth in the year to September 2018.
UDG:LSE
UDG Healthcare PLC
1mth
Today change
-9.19% Price (GBP)
563.50
It's true, the short-term outlook is marred. Management has had to take a $10m (£7.8m) impairment on an underperforming division (which has now been sold), while the pharma marketing division is set to report a decline in underlying operating profit in 2018.
But we think the long-term potential is being overlooked. Pharmaceutical outsourcing remains a fast-growing trend because of the rising complexity in the industry and UDG is ideally placed to capitalise on this. Its communications division is well diversified and offers a range of services that many of its competitors do not, while the Sharp packaging business can deal with the demands of hard-to-manufacture medical devices. Broker Peel Hunt expects that revenues at these two divisions will grow annually by 10 per cent and 7 per cent, respectively, between 2017 and 2022.
And then there is the opportunity for further acquisitions. In the past three years UDG’s cash conversion has averaged 117 per cent of underlying operating profits and it is expected to continue exceeding 100 per cent in 2018 and 2019. This means UDG has plenty of fire power to fund further deals. Including assumed acquisition contributions, Peel Hunt forecasts adjusted operating profit that will grow by more than 20 per cent in each of the next four years.
That is why we think the rating at 20 times forecast earnings for 2018-19 looks like a decent entry point – especially as, on average, the shares have traded at 25 times earnings over the past two years. What’s more, UDG leads the pack when it comes to income. The company's dividend is expected to be nearly two times covered by free cash flow in 2018-19, which may mean the payment of a special dividend.
So the company is doing well with increased revenues of 8% and pretax profits up 14%. Unfortunately UDG are being punished for the sale of Aquilant back in August which has caused the actual profit to drop from £105m down to £8m. This is of course a one of, and the sp has corrected from a high of 947p in May. Big bod buys have happened through out the year at a lot higher prices to todays price. Next results will show a massive increase in profits.
Oversold and an excellent buying price.
Chart wise UDG are close to support line and oversold.
http://www.chartupload.com/viewer.php?file=53715609940160337543.png
as the company has said it will meet its full year guidance. Some good numbers today masked by a huge write down. It has had a good run up to today tbf so some sell on the news had to be expected. I think it will recover again shortly when sellers are out.
might have injected some optimism into the SP But the SPis more numb now. The SP is quite healthy though and might be pausing before the next leg up. Still shocked by the fall on results and as I thought it was certainly unwarranted. I would like to see another assault on 900p which seems key resistance for the share.
Great bounce today and shows yesterday's fall was down mainly to a poor macro picture. I expect the results have been digested and that the companuy has been given a clean bill of health as an investment proposition.
Very good update today and would be farther ahead except it is a very poor day for the markets. The cut in corporation tax is massive. It also seems the acquisitions- and it remains acquisitive to boot- are also starting to hit paydirt.. Sharp's Track and Trace should be a huge revenue earner when the new law comes in in November 2018. The hurricane impact on clients and delivering FY profit growth weighted to the second half is disappointing of course but overall the results are good and this is a solid hold at worst and a definite buy and hold long-term on weakness.
Good solid set of results with some add ins like the US corporate tax rate change adding 5% to the bottom line with guidance at c45c for the year and more to come in H2 , looks like time for a 900p+ sp. GLA Scotinvest
ahead of tomorrow's trading statement. It is probably just some positioning ahead of the statement after some large falls. I hope the weaker dollar doesn't impact trading in the States but it will certainly benefit from the translation of local income statements from the Euro and Sterling areas into US dollars. The pound is back to 2016 levels against the dollar to rates that were more favourable in 2016 than last year. About half oif its business is done in the States so it will equal out to some extent depending on margins. I think the acquisitions will start to hit paydirt now and show how undervalued UDG is.
Disappointed with current sp move , but you can’t win them all when buying in . Hope the results prove the sellers wrong - I believe this is a strong growth coy with great margin opportunity and hope to see the 5 year sp growth trend continue into 2019. GLA Scotinvest
withdrawal symptoms here? Seems to be in slow decline. I am very surprised we are sub 800p which si 20% below ATHs. The trading update at the end of the month should be a health check on the financial position. The fall seems very overdone and I feel we will havea a change in sentiment in the run up to the T/S. Oversold!
Yet another ridiculous retrace unless someone knows something about the CFO appointment. Staring to claw back now and well worth buying these dips.
of nearly 6% which could mean the market is disappointed by the "who" of the new CFO appointment. And on a day when Peel Hunt reiterated its buy tag with an 880p target. I can't see any sell advice anywhere so I am puzzled by the drop,.
900p has arrived so xmas has come early this year. It has been a momentum play for a few weeks so hopefully the next stage will be a climb to 960p. I am very pleased to se 900p again though after the ridiculous reaction toresults.
BUMP. My 900p is not far away now. Ridiculous over-reaction to the cfo leaving after 20 years and this is now being corrected by the market. UDG performing well today in a choppy market.
UDG UDG Healthcare breaking through the long term resistance line going back to mid June this year. Nice little uptrend breaking out. 34.5% increase in EPS pencilled in for 2018 puts it on a P/E of just over 26 BUT a PEG of just 0.78. Looking for last top here first at 965p. 😀😎 https://pbs.twimg.com/media/DQ6dxa6XkAERFYh.jpg
and down the next there is intrinsic value here. The CFO stepping down was a possible spur for selling but given the length of time and the prospect of an orderly handover this is surely overblown. UDG actually fell 15% from its peak of 958 in 3 short weeks. There was nothing in the statement that could justify that. I shall continue to accumultae and hope to see 900p by the end of 2017 and �10 by the end 2018, Track and trace in the US will kick in then and should be very lucrative for UDG.
Just don't understand the traders selling up again this evening. Cant they read ? The quote you have given below could not be more positive . Sure in twelve months this will be over �10.00 . Topped up yesterday at �8.16 will go again tomorrow if it dips to around �8.20 As Toyah once sang "It's a Mystery"