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The most bizarre thing has happened.
A day after VLX announce an enlarged debt facility on a better interest rate (in these days of rising interest rates), GLG Partners increase their short position by 0.15 percent; as if they are unbelieving of the due diligence conducted by the five separate banks backing the PLC; incredulous of their risk management.
Either they have insider knowledge or they're in for a smacked arse.
As it is I who am incredulous of GLG, one's money is on the latter.
Coming soon...finance sorted
Bought more today...
Rates easing??
the returns on capital here are exceptionally cyclical (look at 20+ year performance)
basing investment decisions on current/recent profitability has proven risky....you have to judge peaks and troughs
tp £1.50 (still massive premium to TNW)
Bought some other day....
If the US market continues to slide.
I don't think VLX or most of UK stocks will be immune.
Still value will out in the end ...
Added few more to holding today
The markets are expecting a US FED interest rate raise first though.
April trading update no far away. Good entry opportunity at current SP I believe.
Monty-any further recent news the sp is nudging back up
Broker ratings are always higher than true fair value it seems to me, the 480p mark doesn’t seem a stretch. Yes a lot of acquisitions and a little margin off from freight and copper prices. But copper is hedged and passed on with a slight delay due to the normal averaging out period needed as they said in their updates. Also the cost of borrowing is very low, so accelerated acquisition purchasing now is shrewd as we are starting to enter higher borrowing costs and a lot are fixed aside the rolling which probably have contractual lags before rates go higher. Agree it’s all about paying the right prices and integration of the acquisitions. There is enormous global customer synergy from these strategies and big global OEM’s like the reduced global risks from partnership with big CEM’s like Volex. I think we will see a big swing north in their next trading updates unless we have a global black swan event. (China - TW or Russia - Ukraine or Biden dropping down dead etc). All of which will be transitory in time of course.
Jeremy Grantham continues to talk about the US super bubble being burst.
If he is right UK stocks not as expensive as US stocks will take some collateral danage.
https://markets.businessinsider.com/news/stocks/jeremy-grantham-gmo-stocks-housing-bubble-crash-warning-advice-crypto-2022-1
Conaccord Genuity today increased Volex target price from 500p to 510p.
There is no doubt that VLX debt is increasing to support acquisitions. However, given their history of profitable growth via acquisition then apart from tech stocks being out of favour there appears to be nothing sinister in the SP fall.
Buyingplants, finally seen the vector vest analysis. Nos realise its a paid for service though 30day trial is only 99p. Looks very thorough.
They have fair value 473p. Vlx 60% + undervalued.
VV Analysis looks good for a buy and hold. Techs are poor atm due to the downtrend but it is very oversold.
I suspect once trend reverses people will buy back higher but needs that reversal of trend.
The aquisative strategy brings execution risk, especially when numerous additions are being managed and incorporated at the same time. Profit taking may explain some of the fall but I think the amount the company has taken on is also a factor. The company needs to prove that the additions work and add value, when that is proven I think the direction of SP will change. From a technical point of view, now that 300 has been breached I think there maybe further to fall.
Not surprised it has fallen back from 480p as traders excited with profit but slightly surprised it’s drifted this low.
Price this morning touched a low that was last seen in DEC 2020. Since then revenues have all but doubled (+44%) and PBT up 34%.
I’m sure the next Trading update RNS will start to kick the SP back to the 480p range it was before. Markets are choppy and price risen quickly so not surprising to see some profit taking. Bigger picture It’s a very well run company and the acquisitions well chosen. It’s also pretty niche in that it’s true LT global so as OEM’s expand like say Tesla in Berlin. It can supply from its European factories. It’s EV growth opportunities are globally enormous not to mention all its cloud data products as well. It’s not surprising to see the BOD acquiring serious volumes of shares and zero selling. Glad to be onboard for the ride.
From annual report, a useful snippet on page 11.
Trading during the first two months of FY2022 has been very encouraging with continued healthy demand from our diverse customer base and enquiries from new customers.
Longer term, we remain committed to our f pive-year plan laid out in October 2019 to deliver revenues of $650 million and $65 million of operating income by 2024.
……..
Looking at Hy revenues they are already just shy of 300mil for 6 months., FY they wont be far off that 650mil 2024 target 2 years early. ?
From the annual report -
Revenue from our electric vehicle customers grew to $53.1 million (FY2020: $18.1 million), a year-on-year increase of 193%. Demand in the first quarter of the year was subdued as our customers identified ways to re-open their automotive plants in a Covid- secure way. From the second quarter of the year demand began to pick up, with run-rates improving further in
the second half of the year. Over this period of time, we have been increasing our capacity to support production
for our electric vehicle customers with additional capacity becoming available in the first half of FY2022
Thanks. RN, been researching for a week and had a small nibble as it’s very oversold and looks to have excellent growth potential with its exposure to the fast growing EV market. Supplies Tesla Ford and GM I believe?
Should it drift further I wont be hanging around but hoping to see a bounce.
That should have been "inflation/rates rising."
Yes, it's not hugely expensive, but we may see more falls in the pricey US market triggering more falls worldwide especially with inflation/rates falling.
I am holder, but I've trimmed in fear of a market correction.
However, I've been wrong before ...
Just read HY report here, looks pretty good yet sp fallen off a cliff? Looks like it got a head of itself but potentially now fallen to far?
Half Year
Revenue + 44.5%
PBT +34.7%
EPS +7.8%
Divi + 9%
PE is 14 which is well below the industry standard especially for a high growth company,
Margins dropped slight from 10 to 9 % but looking back a few years ago they were 2% so well up on that. Forecast is/ was to maintain a margin around 10%
Sp dipped below £3 Friday for the first time in 12 months having fallen from £4.75 peak in November which surprised me...
Electric vehicle market currently worth $208 billion but set to grow to $957bill in next 8 years..
Vlx starting to look an attractive buy? Thoughts?
Once fundamentals are reassessed would expect a gradual recovery in the SP after recent precipitous drop. Director purchases and decent half year report /comment are positive . Would expect additional purchases by other directors in the immediate future.