Stephan Bernstein, CEO of GreenRoc, details the PFS results for the new graphite processing plant. Watch the video here.
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Orders up 8% (yearly)
Revenues up 3% (yearly)
Debt down to £41.5M (£52M last year).
Q4 Dividend expected to be at least 36p (to be announced 3rd March with Results).
Order intake strong, improvement across all sectors.
Enterprise Resource Planning system working well, shipping at or above normal rates since mid-November.
Healthy order book and ongoing new design wins, revenue growth expected
Read it and weep, Lombard
Above 1% now so they’ve increased against the tide..
Lombard Odier might have been expected to start unwinding their short position, given that it has been failing for months, but on Friday they increased it, again! Their short interest is now up to 0.9% and they have probably lost over £1 million at current prices. The strange thing is, every time they increase their short, the share price seems to rise, almost as if the market is interpreting their shorts positively, as mere future forced buys.
Every broker covering XPP now rates them a strong buy, according to the Share centre:
https://www.share.com/investments/shares/2844/xp-power-share-price#brokerviews
Just got a sell quote on these and the spread was a lot smaller than I expected. So perversely maybe I did not sell. I can't explain Lombard Odier.
"The stock has partially reduced the discount versus UK electronics and international power converter peers but continues to trade at a discount of c 30% and c 40% respectively on a current year P/E basis while offering a strong dividend yield. The company has taken steps to mitigate the impact of trade tariffs between China and the US as well as preparing for Brexit; evidence that margins are benefiting from this self-help should support upside to the stock. A return to order growth from the semiconductor equipment sector would be a further trigger for upside."
https://www.investing.com/analysis/xp-power-q3-order-intake-encouraging-200472172
Edison's assessment looks like common sense: XPP are demonstrably cheap, the dividend is generous, and business is robust thanks to sound management, despite being at the bottom of the cycle. Can anyone discern Lombard Odier's rationale for shorting?
Last three months - orders up 4%, revenue down 1% (compared to last year, ending Sept 30th, on a constant currency basis)
Q3 dividend 20p, payable 13 Jan
Debt down slightly from £50.4m > £50m
Next update 13 January.
Peel Hunt raised their target price from 2650 to 2850
They've increased for months, in inverse direction to the sp!
Lombard's increasing short position doesn't seem to be deterring buyers, but it looks like it put a temporary brake on the rally.
"China announced plans to impose a 10% tariff on $75bn worth of goods imported from the US.
The new taxes were themselves a response to Mr Trump's plans for a 10% levy on $300bn of Chinese imports.
Wall Street share markets dived after the president tweeted that he would respond to the new tax later on Friday."
https://www.bbc.co.uk/news/business-49450245
From the Half yearly report:
"Our decision to establish manufacturing capability in Vietnam in 2012 and the subsequent capacity expansion which was completed in the first quarter of 2019 have proved to be extremely timely. Our Vietnam manufacturing plant allows us to offer our USA customers products which are not subject to the 25% Section 301 tariff imposed by the Trump administration on power converters manufactured in China. The majority of our competition have a predominantly Chinese manufacturing footprint. We have transferred the production of over 1,500 different products from China to Vietnam in the last 12 months. We are also announcing plans to transfer the manufacture of all our low power, high voltage DC-DC converters to Vietnam by mid-2020, which we expect will lead to significant cost savings."
So my comment about relief from tarrifs was wrong - XPP are already subject to existing tarrifs, and presumably would therefore be unaffected by the (delayed) new ones, which are (probably) for different products.
More from the half-year report:
"Outlook
We continue to see a robust performance from our Healthcare, Industrial and Technology businesses, however, a combination of continued softness in the Semiconductor Equipment Manufacturing sector and the task of recovering Section 301 tariffs present us with a continuing challenge as we enter the second half.
Our Vietnamese manufacturing capability puts us in a strong position to mitigate the impact of Section 301 tariffs. The transfer of production from China to Vietnam, and the qualification of product by our key customers once transferred, is key to restoring our margins to historical levels. Once this is achieved, our production footprint should give us a compelling cost advantage over the majority of our competitors who produce predominantly in China. Our margins in 2020 will also start to benefit from the closure of our Minden facility and the transfer of the Minden-built products to Vietnam.
Although we do not anticipate any meaningful upturn in the Semiconductor Equipment Manufacturing sector before 2020, once the recovery takes hold we expect the combination of our recent design wins and the cyclical recovery to produce significant growth in this sector."
To my mind, the upside prospects for this stock seem much more plausible than any downside over the next couple of years. Trump somehow manufactured a dispute with Denmark, but surely he will continue to avoid Vietnam?
Interim results were not bad, market seemed to be expecting worse - slightly lower margins, but manageable. Trumps flip-flopping on tarrifs on China currently delays them until December, which is useful for XPP while they transfer production to Vietnam.
Trump's China Crisis.
If I'd been a bit quicker I'd have got some of these at 1850p. Bargain basement.
down for a reason? Bad update imminent? Seem rather a bargain on historic results, generous dividend and steady dividend progression.
Bought a few more. x-d in under a month and it's current price may be due to Trumpaphobia which could be alleviated towards the end of June. Or get worse. Who knows?
Wish they would put the percentage change first and then the currency change in brackets!
I'd like to buy a few more but a 30p fall isn't worth it altho' it'd be a disaster on other stocks.
I'm looking at that too Sebs. But I feel I have too much in the other one at the moment and lets be honest, this one seems less of a pig.
I sold today and bought back into the other one :) Seemed like a good idea at the time....Let's See how it goes...GL to you Shallwe
I'm planning to keep.this one for a few years....Nice Divi as well :) Seems very well run.....Glassman also seems like a shrewd purchase... Let's hope we do well :) May put the proceeds back into SEE but I'm not in a rush. I've also got a holding in Rosenblatt....Truth be told I get most of my tips from the Naked Trader lol....
Stay positive Sebs. I'm not a chartist, but if I was, I can see that it looks pretty good.
Another nice rise today ...Maybe people buying in before ex divi date ? Hope it can stay strong past the ex divi date....
And good luck to you Sebs. The 'other' holding is certainly trying everyone's patience.
Hello Shallwe Well played then.....I got in last week as I couldn't sleep being 100% all in the "other"holding lol... Good luck my friend...
Having got in recently, I'm not complaining either Sebs.