Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
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Looking more closely at the data available in that FT link, it appears that three of the top five institutional investors have been net sellers of XPP over recent months, with only Henderson adding. The information is incomplete, but there does seem to be scope for considerably more institutional interest if the company can keep growing it's business and prove reliable with it's dividend.
Share Magazine features a piece on XPP. It's behind a paywall, but the extract on their website says:
"We believe that XP Power is an electronics engineering gem. The shares may be close to all-time highs but we see long-run, well managed upside more than capable of outperforming current single-digit earnings growth expectations."
So, what sort of gem do they mean? Midget gem? Iced gem? If they are actually comparing XPP to jewellery, they should wear a brooch of shame: XPP is more like a miner than a sparkly gewgaw.
List of Institutional Investors here: https://markets.ft.com/data/equities/tearsheet/profile?s=XPP:LSE
totals 46% (throwing shade on my earlier speculations).
Perfect timing is elusive, but you came pretty close with that sweet last entry point AAS. Looking good for a substantial second profit when you call it. Nice!
Took profits earlier this year and regretted it. Then got back in at 2998 after research. Onwards and upwards... Stick or bust..
"expects XP Power's earnings growth to accelerate from its 9% five-year average to 15%, which its analysis showed should drive a re-rating"
They are targeting 5130p, or 20% upside from current price. Always nice to hear a positive guess (@:
https://www.sharecast.com/news/broker-recommendations-/broker-tips-xp-power-hummingbird-resources-rotork--7600671.html
Yes, and well over 100% in a year. I think the market probably marked these down too much during the cyclical downturn due to crippling uncertainty caused by the trade wars and Brexit, so to some extent the SP has been lagging and playing catch up with a remarkable commercial turnaround in the companies markets, coupled with lucky (or brilliant) management decisions. I wonder whether the latest SP action may be due to the company becoming more visible, less risky and finally "investable" for institutions?
Looking forward, this seems to have become a COVID-19 play through a boost in medical sales. That could be a long-term enhancement to the revenue stream, and potentially a source of large and valuable new customers. In addition, a new wave of external technological changes seems to be generating yet more demand. So maybe it is a little early to be looking for the exit, as more growth seems to be on the cards? On the other hand, taking a profit can never be wrong! I'm sticking, fwiw.
..over 50% gain. Can it last? In a recession? If so, what's it going to be like after the recession?
It makes me nervous!
Just noticed the director selling was more extensive and significant than I realised, totalling £10.6 million - quite a chunk of the MCAP (£856M). They've certainly cashed in on their success, and why not. That amount of freed up equity may increase volatility slightly. Meanwhile, brokers Berenburg have hiked their price target from 4150 to 4980: they seem to have got it about right last time.
Hi chestermikeb.
The company produced an insightful video with the interim results: https://www.xppowerplc.com
Richard Beddard is my main source, he has been following the company for a long time and writes quite comprehensive periodic updates: https://www.ii.co.uk/analysis-commentary/xp-power-one-my-favourite-companies-ii511791
I hesitate to say what a good dip would be, I tend to buy once and hold. I suppose under 4000 is an obvious round number, but before Monday it had never gone that high, so maybe you should be aiming lower. The upcoming US election might offer some opportunities if Trump uses trade wars as a distraction - the SP is sensitive to news over tariffs, despite being substantially insulated from them. Another possibility is COVID-19 outbreaks in Vietnam. More likely, imo, the price will continue rising steadily: management stated that costs were high in H1 due to inflated air freight costs which have now normalised - this suggests the final results might be even better than these spectacular interims. Despite the sharp rise on results, the current price is (was) arguably depressed by largely irrelevant Director selling (Approx. £1M). The reinstated dividend is another attraction which would logically tend to buoy the SP.
Don't forget to consider the downside before investing, to have a good idea of the level and type of risk as well as the potential upside. Good luck!
Hi all. Just discovered this company and starting to do some research. From my very brief scan of the reports they appear to be doing incredibly well, sp is at an all time high. I’m curious what sort of dips would tempt you to buy here? Difficult to gauge what a decent buy-in price would be at the moment. Also do you have any suggestions on where to focus my research as a newbie to the co? Thanks.
You are quite right they did, my error!
It is surprising this stock is off the radar here. Demand for its products will surely grow as companies turn to robotics in the wake of the pandemic. As it is I will increase my holding if there is a dip or I can release funds from elsewhere.
Actually AllAtSea, I believe LO closed their position a few weeks ago, and LSE is displaying out-of-date information. The SP did briefly dip quite low during the early pandemic panic, so they may have managed to reduce some of their losses, and if I'm right, they can at least be happy they got out before the long underlying upward trend resumed!
Latest update is even better than expected - management have positioned the company exceptionally well to cope with the conditions, with perfect timing of software and website improvements, and diversified manufacturing giving superb flexibility and commercial advantage over the competition. They have also been ruthless with closing down older facilities to contain costs and seem to have a strong grasp of the reality of their markets. Early restoration of the dividend is an unexpected bonus, and as suspected, the previous cancelled one was merely used to pay down debt and improve the balance sheet even further.
In view of the companies outstanding performance over the last year, and what seem like exceptional prospects, it's a shame there's no-one here! ( :
Presumably means they were selling shares they had not got at a price of 3210. I wonder when that'll come good.
Another very positive update.
"The Semiconductor Equipment Manufacturing sector, which has started to recover from the cyclical downturn we experienced in 2019, also continued to see strong order intake in April and May."
Net debt down from £45.3 (31 march) to £38M (31 May). "The Board expect net debt to reduce further during the second half of 2020." They are silent on the suspended dividend, so presumably they will be using revenue to pay down debt instead. Hopefully shareholders will be compensated by a rising share price.
https://www.lse.co.uk/rns/XPP/trading-update-1ky85r4pabcc87k.html
There has been a lot of ongoing change, involving heavy investment in software, factories, closures of older facilities etc. I suspect they may be in a sweet spot right now, despite the pandemic, but hard to be sure, and they have suspended dividends.
Richard Beddard wrote a substantial favourable piece a few days ago: https://www.ii.co.uk/analysis-commentary/xp-power-one-my-favourite-companies-ii511791
I stopped monitoring Lombard Odiers hilariously unsuccessful shorting, but it looks like they eventually cut their losses and closed the position completely. I went long at almost exactly the same time they went short. Vindicated!
One thing that does concern me is that Return on Capital has halved over the last 5 years and the trajectory has been disturbing....from 26% in 2015 down to 13 % in 2019. Suggests to me that they are very efficient?
Terrific performance in Q1, everything good, revenue up, orders up, China back to work, Vietnam unaffected, yet the Q4 dividend has been clawed back due to uncertainty over the outlook ahead. Seems like an overabundance of caution given the numbers, but this management have proven to be pretty canny, and better safe than sorry. Where shareholders lose out in dividends they may gain in SP. Pretty dire outlook for some other companies if even booming XPP see a problematic near future, presumably worried about purchasers going bust or contracting.
"COVID-19 creates a high level of uncertainty about the Group’s performance in the balance of the year. To date, order intake has remained robust and the Group has a substantial backlog to fulfil, with shipments weighted towards the second half. While we remain encouraged by the strength of our order book, the extent of disruption to the global economy from the impact of COVID-19 is currently impossible to predict, introducing a significant element of uncertainty into the outlook for 2020 as a whole. "
Unusually well written, detailed report on the business. Management here are superb communicators.
Solid results, much as expected, but a huge boost comes from signs of recovery in the semiconductor sector.
The impact of COVID-19 on the supply chain is mentioned, an external factor to consider as a specific risk here, but there are two factors mitigating it - Vietnam are handling the outbreak superbly, and the challenging upgrade to the SAS ERP sotware system has been completed, giving greater control and flexibility.
Completion of the expansion in Vietnam early last year increased total Asian manufacturing capacity from $170M to $300M per annum. Considering work began in 2017, the shift in location has been fortunate in terms of avoiding US tariffs, but in the long term the company aims to have the ability to be able to manufacture all products in either Vietnam or China, which seems both prudent and sensible. The increased capacity is complemented by an increased order book, so all now seems in place for a growth phase.
James Peters, Chairman, commented:
“We delivered a resilient performance in 2019 despite facing a number of challenges. While growth in our Healthcare, Industrial Electronics and Technology markets remained robust, this was offset by a cyclical slowdown in the Semiconductor Equipment Manufacturing market and pressure on gross margins, resulting from the increase in US trade tariffs on Chinese manufactured goods and changes in product mix. Despite these headwinds we grew order intake and revenues over prior years, continued to win new designs and made good strategic progress.“
“Trading conditions in the early months of 2020 give grounds for optimism. Signs of a recovery in the Semiconductor Equipment Manufacturing sector are reflected in our strong order intake in the fourth quarter of 2019 and are finding good opportunities for the products brought into the Group portfolio through the acquisitions of Comdel and Glassman. We also expect benefits from the transfer of production from Minden to Vietnam in the second half of 2020. However, we are affected by certain external events, such as the impact the outbreak of the COVID-19 virus had on our supply chain. This introduces some caution into our outlook, but we remain encouraged by our healthy order book.”
https://www.lse.co.uk/rns/XPP/annual-results-for-the-year-ended-31-december-2019-9gv1x9rzkt9fa9k.html
Lombard have unwound their position a little bit more, but hilariously, the SP turned at exactly the same time they did, so they called it wrong yet again! Down below 1% now.
I'm holding on through what I suspect (or at least hope) are temporary pullbacks due to profit taking, and possibly overdone fears over the effects of the Coronavirus, which may well affect rivals more than XPP. With the new computer system fully operational, and a new website broadening the appeal of the online sales channel, hopefully there is more good news to come.
Would it be right to say Lombardier are acting on instruction like it or not? Given the sp/time frame the short seems like backing a donkey in the 'National.
Lombard reduced their short from 1.1 to 0.94% on Tuesday.
Too early to call capitulation, but they are rocking.
Another indication of XPP's improving position and scope for growth:
http://www.connectingindustry.com/DesignSolutions/xp-powers-new-website-delivers-an-enhanced-user-experience-to-specifiers-buyers-and-designers-of-power-solutions.aspx
Berenberg, who started covering XPP in late November, have hiked their target from 3330 to 4170, which is an almost exact 25% increase, and, if reached, would be an all-time high.
Such dramatic changes in broker forecasts over such a short period tend to undermine their credibility, imo, but this one is probably fully justified by XPPs recent comment on likely revenue expansion next year? Vietnamese production logically gives them both a defensive and margin edge over rivals in the medium term, and design wins show they are focused on quality as well as efficiency.
Against the tide is right compadre! That last sandcastle on 31st December was already underwater even before today's wave, but they laid their towel on the beach back in August, at about 2200p, when all other shorters had just packed up and left with a nice suntan. They are really drowning now, and with a high tide forecast, sharks are circling.
Worst short ever?
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