Member Info for pernix

Strix has solid growth prospects, profits & sales revenues. It has a knack for spotting profit earnings acquisitions like Laica doubling profits, industrial clean water farms technology in Chinese pig farms, Hospital clean water technology in China required by Chinese Legal Regulations (still coming) and now Laica Microplastic clean water filtration for human health & the environment. Also, I would think commodity prices are at peaks & next year will moderate downwards with increase in supply coming on stream. That means Strix price increases on its product ranges will contribute to higher profits & benefits of surgical cost cutting measures. Together with sales growing around 30%, Strix will be pumping on all cylinders. Then The Chinese economy will be reflated higher & with lowering of Chinese interest rates creating more demand for Strix products as the middle classes want higher quality reliable products for home use improving their lives. So Strix shares are going to be re-rated upwards & I stick to Liberum with around 370 pence price target. Also a Strix Takeover is now a real possibility as a bidder would benefit from all the hard work of developing a world leader technology company. So they look to snap it up as Strix free higher cash flow is appealing, which is stable reliable from a monopoly market leader.

A chat board writes on another chat board:
buoycat: A lot of similar negativity around convatec a month or two ago. Fortunately I sat on my hands and the shares have risen about 30% since. Hopefully the experts will have the same impact on the Strix SP!

I’ve bought more Strix shares. Average down my share buys. They are even more great value now. Crazy people selling Strix at these low prices.

Wayzgoose: Strix shares fall perplexing? Market makers maybe taking shares down, then larger financial companies got chance to pick up cheap shares. Stakebuilding going on here as no major seller revealed thus far. Then big financials can report profits on share transactions. Investors are fools for selling out at a ridiculous low share price. Strix has strong prospects & so that’s all it could be. I’m seeing profit warnings with companies everyday on the Stock Exchanges. So better to park money with a defensive growth company paying a decent dividend. If Liberum broker has 370 pence Strix price target, then Strix at 50% Takeover premium may command around 550 pence, If that happens.

Sellers will clear out soon. That will leave buying pressure, shares going to upside then. See Strix more in the tank regards contracts, share transactions etc… China will do more pumping up their economy, more Strix sales.

Joteller: I agree. Strix has been stockpiling materials last year due to price increases & doubling of the new Chinese factory output. That has shielded customers from price increases but now hurting their profits. So time for double price rises I would guess. Otherwise why would the Strix CEO be really confident of a profits increase for this year. Not just a profits increase but sustained dividend increases for investors. Strix monopoly position makes it unique & deserves a premium shares rating.

Krusysmegma: Strix did say at the last update that prices had risen already on legacy products. These are new prices rises pencilled for May to counteract the big leaps in commodity prices stemming from the Ukraine invasion. Also Strix will have contractual legal agreements where they have to give notice to OEM’s of price increases & this can cause price increase delays. You can see from the Strix CEO interview that Strix at every stage has responded effectively to new inflation situations quite swiftly. They are also implementing Cost cutting measures with currency hedging.

Strix price rises on its products should see profit margins rise. That’s why Strix CEO has confidence of an increase in profits this year. Then Strix saying they got enough cash liquidity to invest bolstering organic sales, profits growth more. I personally see inflation taming down once more increased global energy supplies come on stream. Biden in the US is telling energy companies to pump up supplies with land sanctions if they don’t comply. It’s a patriotic duty he says & this likely followed around the world. I can see an Iran oil deal as nobody really wants another nuclear state in the Middle East. Then release of global strategic oil reserves. This should see energy, commodity prices eventually falling. So Strix will likely have a profits upgrade as Strix prices go up, commodity prices fall.

Strix results were good given rising inflation costs.
It maybe that organic growth may not be enough to hit 2025 sales targets. Then an option is to bulk up with another company for more financial, research & operational resources etc … That’s why a Strix Takeover or Merger with another larger company would be on the cards. That way investors can realise Strix true value especially as Strix shareholders are largely the big fund managers & institutions who likely to support this. It does make a little more sense as Company Directors are reducing their Strix stakes for personal reasons. A sell out of Strix would be attractive to most concerned with a better footing to grow more. I wonder if this will happen sooner as you can’t have a swinging downward share price for a monopoly leader & The Strix Board surely know this.

Simon Thompson in Investor Chronicle today "Analysts at Shore Capital estimate that LAICA accounted for between £4.5mn to £5mn of the group’s £33.7mn operating profit, a healthy return in relation to the consideration of €21mn (£17.6mn) in cash and shares paid to date and an estimated contingent earn-out of €6.9mn." Seems Laica business was a great buy for Strix. It seems Strix is firing across all cylinders with newer controller complex products to launch in 2023 as well. So a big overreaction (share price falls) to results yesterday I would defo say.

With Strix having done major investments, cost cutting & pushing up price increases with growth defensive qualities, I think bigger funds looking for positive returns in a possible global recession if it comes. So they need to invest somewhere stable with access to growing China markets & global diversity. So it’s just not bag a dividend & run away. So give it time and Strix share price should bounce back.

Sometimes it those shorters working for major clients to drive down the share price. They pick up the shares on the cheap. Fools for those selling at these low prices! Then perhaps the market makers testing how far low sellers are prepared to sell out. Again here they pick up the shares on the cheap, fools for those selling out at the lows. I agree Strix is oversold completely, even moreso great value. I’m looking to add more shares too. Strix has solid growth prospects.

On profit, Bartlett said he "absolutely" expects profit to rise in 2022, despite the prevailing headwinds. He also expressed commitment to implementing progressive increases to the company's payouts to shareholders, which he said will not be hindered by the current cost challenges.

Bartlett said that Strix will increase the price of its products in May, which is "intended to cover any known increases in the costs of commodities through the remainder of the year". He stressed the bit about 'known' cost increases, Russia's invasion of Ukraine having turned commodity price forecasts on their head.

"So I think we have done everything we can to mitigate those costs. Certainly for the headwinds that we can see as of today and looking at the spot prices today," the Strix CEO said.

Other costs mitigation efforts include making production more efficient, particularly in the company's factory in China. This includes the automation of production lines, which reduces the labour required, making a big impact on costs, according to Bartlett.

Adjusted earnings before interest, tax, depreciation and amortisation was up 6.3% to GBP40.5 million in 2021 from GBP38.1 million in 2020.

Liberum said that, with growth on track and with environmental, social and governance credentials to the fore, it continues to see Strix as a top-tier industrial stock and has reiterated its Buy rating, though it shaved Strix's target price to 370p from 460p.

Liberum analyst Christian Hinderake noted this was around two percentage points off the expected year-on-year growth for Strix due to the timing of rising costs versus the expected increase in the company's product prices. So they say Buy with 370 pence target. This down from 460p due to price increases around May not sooner.

I see no sanctions from China Russia trade at the moment. I agree that doubt much compliance from OEM’s anyway from western sanctions. So Equity Development are overly cautious about loss of Russia trade via OEM. So I would be inclined to go with Liberum broker Strix target price around 370p. So once sellers finished denting the share price Strix shares going to bounce off from their lows.

Strix shares are good value. Equity Development are speculating that lost OEM business from Russia will not be covered across other markets. Maybe over cautious. Strix is gaining market share & reasonable to assume they looking at making up any business shortfalls. Who knows when they will reach 370 pence as Liberum broker suggests? All we can do is follow the trends & be rewarded with decent dividends.

I would agree tree shake. Strix negatives were all flagged up before results today. So no major surprises. I think investors are comparing before inflation was a problem with every industry. That’s not the case & realisation should reflect the world economics now. I see Germany now cutting economic growth forecasts. That favours defensive growth shares like Strix.

Yes, 370 pence Liberum target now. All industries are facing commodity price inflation & that lowers their target price from previous I would think.