Member Info for JohnGould

For those long who held their nerve -drrrrr!

Well done to those who held their nerve :)

. . . and the directors bought in massively with the same knowledge. Run along now.

Your posting history does nothing for your credibility.

By Theron Mohamed, 01 September 2014 The LAST IC view was: Buy, 526p, 10 July 2014

By Theron Mohamed, 01 September 2014 The LAST IC view was: Buy, 526p, 10 July 2014

Xaar embroiled in price war Shares in Xaar (XAR) slumped 6 per cent on news that fierce competition has been driving down its prices. The digital inkjet printing group saw its operating margin plunge from 33 to 26 per cent. In addition to pricing pressures, that decline reflected Xaar's return to normal production levels following last year’s rapid expansion, as well as increased capacity at its Huntingdon plant following a £60m investment. Sales fell 8 per cent at Xaar’s main industrial segment and by nearly a fifth in its graphic arts and packaging units. The pain has continued into the current quarter in the shape of lower forward order volumes and weaker demand from ceramic tile companies, particularly in China, where construction activity has slowed. Management have now lowered their full-year sales guidance to £115-125m, down from £137m last year. Xaar is betting on new products to revitalise its business. For instance, in May it announced three printheads that digitise aspects of ceramic tile manufacture, such as base glaze and structure. The Xaar 1002 GS40, which is designed to produce intense colours and special effects, launched this month. Broker N+1 Singer slashed its EPS forecasts for this year and next by 17 and 22 per cent respectively. It now expects full-year pre-tax profits of £29.6m, giving EPS of 32.1p, down from £41.1m and 43.2p last year. XAAR (XAR) ORD PRICE: 435p MARKET VALUE: £333m TOUCH: 435-436p 12-MONTH HIGH: 1,191p LOW: 387p DIVIDEND YIELD: 2.0% PE RATIO: 13 NET ASSET VALUE: 155p* NET CASH: £48.1m Half-year to 30 Jun Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p) 2013 70.2 23.4 25.5 2.5 2014 60.4 15.3 16.7 3.0 % change -14 -35 -35 +20 Ex-div: 3 Sep Payment: 3 Oct IC VIEW: Xaar’s shares have slumped by half this year and have even slipped since our recent contrarian buy call. The company's exposure to the Chinese property market is worrying. Trading at 14 times written-down forecast earnings, however, they continue to offer recovery potential, given the company's market-leading position. Buy. Last IC view: Buy, 526p, 10 July 2014.

What about the massive director buys? These provide me with confidence to see this through at least for the next 6 - 8 months.

Looks over done here, typical over reaction . .

been waiting for! Go Camkids! :p

Camkids kicked unfairly The pre-close first half trading update from Camkids (CAMK: 51p), the Chinese designer, manufacturer and distributor of outdoor apparel, was reassuring enough and certainly did not include anything to warrant the subsequent 17 per cent mark down in the share price in the past fortnight. Firstly, Camkids' board has confirmed that trading is in line with previous guidance. Matt Butlin, head of equity research at brokerage Allenby Capital, currently predicts EPS of 25.8p for the 12 months to end December 2014. On that basis the shares are now trading on a miserly two times earnings forecasts. The chronic undervaluation is even more extreme once you consider that Camkids had net cash of £30.3m, or 40p a share, at the start of this year. Furthermore, with cash flowing into the business post the year-end as inventories turned into cash and distributors settled accounts, net funds hit £37m, or 49p a share, by the end of February, or almost as much as the company’s market capitalisation now! So just like Naibu, investors are in effect attributing hardly any value to the business itself even though it is profitable and is supporting a full-year dividend of 4.3p a share. It also means that with Camkids’ shares being offered in the market at 51p, the historic yield is 8.4 per cent. Clearly, some investors are worried that Camkids is investing around £20m of its bumper cash pile between now and the end of 2016 to develop new facilities alongside its current ones. However, at current exchange rates that investment only equates to one year’s net profits, so annual cash flow generation will help protect those net funds. Moreover, this move will support its e-commerce initiatives, and logistics operations, and also enable the company to offer accommodation to staff, which in turn should help it attract and retain highly skilled staff. Given the problems Naibu has encountered, this looks a sensible move in my view. I also noted that the non-executive directors have now visited 40 of Camkids’ estate of 1,336 retail stores since the company’s IPO. It’s reassuring to have positive feedback on the quality of the estate, dispelling the scare mongering postings on certain retail bulletin boards. So, although Camkids’ shares are the worst performer in my 2014 Bargain share portfolio, with the business in the price for free, not to mention a further £32m of free assets on the balance sheet, I still believe that there is clearly value in the heavily oversold shares. Interestingly, a break above the June and July lows around 52p to 53p would also shorten the odds that the current correction is coming to an end. On a bid offer spread of 50p to 51p, I am happy to advise averaging down your holding cost on Camkids’ shares too.

For instance, shares in Aim-traded clothing companies Camkids (CAMK: 56p) and Naibu (NBU: 63p), both of which I updated in extensive online articles a month ago ('Tasty Chinese takeaways'), 6 June 2014), have proved incredibly volatile. In particular, Camkids is proving a drag on the performance of the portfolio. Sentiment may be poor right now, but on fundamentals the shares remain undervalued and can only rate a buy on a cash-adjusted PE ratio of one and yielding 7.7 per cent. I am not changing my positive stance on either.

Importantly, bond investors clearly believe in these revenue and profit forecasts, otherwise they would not have been prepared to refinance the company on the terms agreed. In time I expect equity investors to fall in line too as there is no way the shares should be trading on only 12.5 times earnings estimates. In fact, a growth company like Greenko should be able to achieve a multiple of at least 7 times cash profits to enterprice value (market value plus debt). So on the basis that Investec expect Greenko to generate cash profits of €143m in the financial year to March 2016, and after factoring in net debt of €551m, I arrive at my own target price range of between 225p to 230p. Needless to say, having first advised buying the shares when the price was 134p (‘Buy signal flashing green’, 18 March 2013), I firmly believe that Greenko’s shares are well worth buying on a bid-offer spread of 178p to 180p.

The fundamental case to invest is highly supportive too. Greenko’s capacity has more than doubled to 661MW since April last year, of which wind power accounts for over half. The pipeline is equally robust: around 423 MW of projects are under construction and 1,240 MW are in active development as Greenko creates a diversified hydropower and wind portfolio for India's high demand power market, supported by a reliable roll-out of high yield assets. The target is to achieve 1,000MW of operating capacity by next year, and to double capacity to 2,000MW by 2018. The political back drop is equally encouraging. In fact, clean energy is becoming an increasingly important part of the Indian energy market and will provide a significant portion of the Indian Government's 12th Plan target for new capacity. The emphasis in the Indian energy market is changing too and is more focused on price discovery using reliable supply contracts, instead of unsustainable subsidised power. Furthermore, following the newly elected Prime Minister's statement to strive to deliver “24/7 power availability in the country”, renewable energy is being seen as a key political priority. So, with capacity being ramped up, and demand strong, it’s hardly a surprise that Greenko’s profits are surging. Attractive growth rates In the financial year to end March 2014, Greenko still managed to grow revenues by 38 per cent to €53m (£42m) and increase operating profit by almost 40 per cent to €27.5m. After finance costs, pre-tax profits shot up two thirds to €13.5m to lift adjusted EPS up by over a half to 4.5 cents. Analyst Adam Forsyth at broking house Arden Partners is forecasting a further ramp up in revenues and profits for the financial year to March 2015, reflecting another sharp increase in capacity. He predicts turnover will surge from €53m to €96m which in turn will more than double Greenko’s operating profit to €63m. On this basis, expect pre-tax profit of €35.2m and EPS of 13 cents, or 10.4p a share. This means that Greenko’s shares are trading on around 17 times forward earnings. But that multiple is set to drop sharply as revenues start to flow through from Greenko’s pipeline of new capacity across a number of wind and hydro projects in India. For the financial year to end March 2016, analysts are predicting turnover of between €146m to €178m and operating profits well above €100m. On this basis, expect pre-tax profits of between €50m to €55m and EPS as high as 18.5¢, or 14.5p. This implies the shares are priced on 12.5 times earnings estimates for fiscal 2016, a modest rating for a company set to quadruple EPS over the next two financial years. Importantly, bond investors clearly believe in these revenue and profit forecasts, otherwise they would not have been prepared to refinance the company on the terms agreed. In time I ex

Bond investors warm to Greenko As bond issues go, this takes some beating. Greenko (GKO: 180p), the Indian developer, owner and operator of clean energy projects, has just pulled off a massive fundraise on the international bond market and one that can only highlight investor appetite for its paper, not to mention the quality of the assets held. The company’s $550m (£320m) bond issue on the Singapore Stock Exchange is by far one of the largest issues of its kind by an Aim-traded company. The fixed income issue was priced on an 8 per cent coupon with maturity extending out to 2019 in order to enable the company to refinance its existing debt at an attractive rate. Chief executive and managing director Anil Chalamalasetty rightly points out that “the quality of our operational assets has enabled the company to access the larger debt markets at better costs, allowing us further scope as well to project finance our clean energy assets.” It augurs well for the future because “as Greenko builds on its predictable and phased roll outs, we are able to enhance our business and financial efficiencies across all forms.” It’s worth flagging up too that equity investors have noted the significance of the mega bond issue. In fact, having oscillated in a tight trading range between 161p to 175p for the past seven weeks, Greenko’s share price burst out through the top of the range on news of the successful fundraise yesterday. From my lens at least, and having seen the share price pull back from a multi-year high of 193p in mid-February to test its 200-day moving average in May, this looks very much like a successful test. As I have pointed out many times in the past, in bull markets the best time to buy is on a pull back to the long-term trend line. That’s one reason why I remained positive on the shares when I last updated the investment case when the price was 162p (‘Powering up’, 16 June 2014). From a technical perspective, there is nothing to stop Greenko’s share price from running up to that February high, and beyond towards my own target price range of between 225p and 230p. If that target is achieved the company’s equity would be priced on the equivalent of seven times cash profit estimates to Greenko’s enterprise value for the financial year to March 2016. And I am not being too aggressive with my target price either; analysts at broking house Investec have a 275p target price and Arden Partner’s have a fair value of 245p a share, or 36 per cent above the current share price. Strong macroeconomic and industry drivers The fundamental case to invest is highly supportive too. Greenko’s capacity has more than doubled to 661MW since April last year, of which wind power accounts for over half. The pipeline is equally robust: aroun

nice to see, long may it continue

Hyderabad, July 28: Renewable energy company Greenko Group plc has raised $550 million by sale of bonds overseas. The bond offer of five-year tenure, carrying 8 per cent interest, was made by the company subsidiary Greenko Dutch BV, with the parent as the guarantor. The company, which is listed in the AIM of the London Stock Exchange and operates with its headquarters in Hyderabad, will list them on the Singapore Stock Exchange. Reacting to the successful offer of bonds, Anil Chalmalasetty, Chief Executive Officer of Greenko Group, told Business Line, “The company plans to ease up some of the debt burden of completed projects and deploy funds in ongoing projects through the funds raised from the bond offer. We are pleased with the development.” About 620 MW of completed projects are part of the transaction. The proceeds of the bond offer will be used primarily towards repaying the group’s existing debt, according to a statement made with the regulators. “We now have an installed capacity of over 700 MW of wind and hydel power generation assets now under operation and expect to cross one gigawatt (1000 MW) of capacity within the next few months. Several wind energy assets are at various stages of commissioning in India,” he said. (This article was published on July 28, 2014)

http://www.camkids-ir.com If you haven't already seen the investor relations video I highly recommend it. Camkids looks like a very impressive company moving very much with the times.

The auditors happen to be the very reputable firm Grant Thornton unlike some of the other Chinese firms listed on the AIM market. I think this speaks volumes and surely will play into the share price as the months progress.

TSB won't start life as an especially robust profit-maker, however, and BTIG expects fairly flat earnings until 2016. To begin with, the cost base appears chunky and analyst Shailesh Raikundlia of Espirito Santo Investment Bank estimates the bank's current cost-to-income ratio at over 72 per cent, which looks high for the sector. The focus on mortgages means fairly modest margins, too. Indeed, about two-thirds of the mortgage book comprises variable rate products that are capped at 2 per cent above the base rate. That's considerably lower than the average for non-rate guaranteed products in the market. As interest rates begin rising, however, many such loans could be refinanced to more profitable fixed-rate products. Neither should investors neglect the earnings help that Lloyds is being required to offer TSB in the first years of its life. Specifically, the former Office of Fair Trading (now part of the Competition & Markets Authority) recommended that TSB should receive the economic benefit of £3.3bn-worth of Lloyds' mortgages until end-2017. In aggregate, that will enhance TSB's profitability by £220m. SHARE TIP SUMMARY TSB faces none of the legacy issues of its high street peers, looks well-placed to chase longer-term growth and will benefit from ongoing earnings support from Lloyds for years to come. Yet its shares trade below BTIG's full-year estimate of tangible book value (316p a share) at a time when those of other big banks trade at premiums - indeed, Lloyds' shares trade on about 1.4 times forecast tangible book value. Such a discount isn't sustainable. Buy.