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Thanks Lindon! That is some very grim reading. Seems that basically this business line is toast for the time being. Yes, there are more positive statements being made about future market opportunities (again! and not sure they are believable anymore). Between the lines there is simply no business being had currently and competition is invading fast. Not seeing any positives out of any of this and the cuts by Liiberium of 30%-40% all around for share price & earnings is shocking , to say the least ... especially given their optimism in the past.
Hard to keep a BUY opinion on the stock anymore, despite the drop. Is it true Liberium have cut their SP target from £5 to £3? Saw this rumor on Interactive Investor board but no news items to back it up ... terrifying mis-step by CAR in terms of setting expectations and putting luff PR out about demand and transformational products that it turns out (a) no one wants to buy now that they are here and (b) margins compressing after 1 small deal. No faith in CAR or management (who seems to have done a lot of selling when the stock was in the mid £4's). Subsequent weak and ambiguous statements about the market and opportunity today from CAR show clearly they have nothing going on behind the scenes ... not sure what they can do at this point - if no one is buying and the competition is increasing and killing pricing power, CAR are going to go back to what they were 5+ years ago.
London ... yes good points as always re:ATML OEM agreement. However, CAR *can say if there has been any new CIT sales activity outside of Xsense, that would be interesting to hear about. Also, 2 follow on points, if I may :) ... Firstly, ATML themselves *can speak about closed Xsense sales volumes in recent timeframes and revenue recognition dates, so let's hope they say something about activity since Dec-2013. Secondly, ATML's share price has been going in the exact opposite direction as CAR's (namely up) so there is a disconnect in the market with these 2 stocks (hopefully they've got it right in ATML's case and wrong in CAR's). I know ATML has much more to their sales story than XSense, but their stock price might be sending positive signals about Xsense sales as well. We won't know till we know (and by then the stocks will all have moved accordingly) but IMO the market has it wrong in terms of stock price direction - either ATML or CAR. BUt back to your original point and it's a good one that CAR is probably saying all they can at the moment, at least as far as Xsense is concerned specifically.
Have seen this before with other tech companies where long holders on promising tech co's are talking about the future potential for years and coming up with explanations along the way as to why there are no revenues or growth. The explanations are endless and very creative! And yes, companies do spend loads up front for sales/returns that never materialise. For example, check out Level3 who spent $14B USD building a future-based network and look at this stock chart: << http://finance.yahoo.com/echarts?s=LVLT+Interactive#symbol=lvlt;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined; >>. There are actually things CAR can say in their results that can let shareholders know what's going without giving away any confidential info. For example ... they should answer the question, are there any new CIT signed sales orders since Dec? are these orders large enough to use up production capacity, and if so, generally by how much? when does CAR expect to see signed sales order revenue appear on the books? what % growth of current revenue will this be? If they have these deals in hand, they can answer these questions. If they can't/won't answer these, then they are full of it IMO and there is nothing happening.
That said .. what on earth is going on with the destruction of the share price? ATML heading to new highs should at the very least help CAR along but they seem to be going in opposite directions. Clearly the small market in CAR doesn't think things are going to happen anytime soon; sometimes there no news and secrecy for a very good reason but sometimes it's simply because there isn't much happening ... would like to think it's the former in this case, but hard not to wonder if it's the latter!
Carclo’s “Buy” Rating Reaffirmed at Liberum Capital (CAR) Posted by Shane Hupp on Jan 13th, 2014 // No Comments Liberum Capital reaffirmed their buy rating on shares of Carclo (LON:CAR) in a report released on Friday, AmericanBankingNews.com reports. Liberum Capital currently has a GBX 500 ($8.24) price objective on the stock. http://tickerreport.com/banking-finance/105051/carclos-buy-rating-reaffirmed-at-liberum-capital-car/
hi Lindon ... thanks, points taken on 'flexible' and I see what you mean about achieving that int he future as well as the key market being larger screens. One question - it seems you are saying that Xsense isn't as compelling specifically in mobile phones, but as I understand it, Xsense could add value here in terms of allowing a more durable mobile screen with more screen space (ie. to the edges) ... and help reduce power consumption, as well. Maybe I have that wrong?
Hawker/Lindon - thanks for clearing up the positioning around Corning ... very interesting, especially the 2013 CES release about them working together and the added comments about this. In that case it really is just a case of time needed to allow the devices to be ready to come to market (LG's phone and Samsung TV seem like the very first, early steps). In the meantime I imagine Xsense can be used even in flat products and still provide benefits via durability, thinness and less power consumption - at least that's how I understand it. GLA.
Thanks Hawker - interesting find; I guess one can't put too much in these blog//industry articles and obviously Xsense is shipping today, so that's good. Also, ATML stock has been on a great run, though imagine that's not just Xsense related. Nonetheless, waiting for that to spill over to CAR in a bullish way. IMO, CAR is way undersold but there is also a lot of ambiguity surrounding the commercial potential for this type of project (IMO, it is huge, but the market seems to disagree at the moment) and the other risk is a large established company such as Corning suddenly arriving to market. Just voicing concerns here really, am long CAR and looking for improvement in the share price soon, but am surprised at how stuck it is at the moment.
Someone posted this earlier at the Interactive Investor board: << http://www.fastcodesign.com/3024405/why-curved-glass-will-change-gadget-design-forever?partner=newsletter >> The worry here is that if the leader, Corning, who makes the iPhone screens is soon to have a competitive product, what happens to CAR / Xsense?
quite a persistent and severe drop in the share price going on, especially against a positive economic and UK manufacturing background ... this appears quite concerning IMO, is there something more sinister going on behind the scenes? Is the CAR / ATML story turning out to be mostly without substance or ... ? Thoughts welcome ...
hi Bezzy- agree with Lindon here (btw he called this action last week!). Agree, the story hasn't changed for the worse, the results were strong in other CAR business lines and Xsense is in production meaning new deals could emerge anytime now ... IMO the disappointment is the timing of everything - perhaps everyone expected large deals to have been announced by now and since expectations haven't been met in that regard, the shares are taking a huge hit. One big question is whether there is a new secret competitor who has moved ahead of CAR somehow (doubtful but you never know) .... while tablets and phones are the most exciting/obvious use of this technology, there is growth in all areas of automotive and consumer electronics as well as industrial use, so should get interesting once production ramps and we get some news of actual further deals ....
hi Lindon - thanks, I see what you mean ... agree, based on the volumes and share movement some biggies are moving positions around in the background and it isn't doing much for the share price ... so that does indeed count as someone big 'getting out'. They may get 'back in' in the future but as we all know, some actual revenue wins are what is needed and those may still be a few quarters away and also, am slightly unsure of the competitive landscape at this point, despite CAR's leading position at the moment in the industry.
hi Lindon - you called that one nicely; Curious - why are you bearish on the share price? To me it appears all the disappointment is baked into the share price at this point. The PE is high, but would adjust quickly with any bump from Xsense revenue. Or is it just a TA issue? Also, does CAR have an exclusive with ATML or could they conceivably add to their 3rd party partner list? If they are able to do so, why have they not done so? Imagine if there was an additional deal with an AAPL or MSFT supplier, for example. Thx!
Btw, ATML shares recovering strongly from the sell-off on the day CAR released results, so the market isn't worried about ATML in the same way that it is here with CAR. Hmmm ... not sure what to make of it all, but seems sell-off here is overdone ... JMHO
New poster here, late in the Carclo game ... Don't understand the drop as there was an Oct 31 statement from CAR and ATML explaining the delays in Xsense revenues .... Meanwhile per the Nov 18 results, the rest of CAR performed well with a positive 2nd H outlook as well .... So why the sudden reaction? If it was due to Xsense delays, this should have happened when the news came out on Oct 31. AAPL discussing 'curved/expanded screen space' for next iPhone and recent Windows certification mean there is activity in this space ... surely it is fair to assume CAR may see some of it? 1 deal from AAPL or a major Windows manufacturer and this goes back to £4 +. Of course there is a risk that the market knows something far more sinister about the situation ... the volume on the selloff has been massive compared to usual daily volume, so someone got out big. But if any deals come out, they will jump back in, so it goes both ways ... going to wait it out here -- think we need another year before a big fish is announced!