Member Info for rivaldo

Looks like another great acquisition - and a very material one too. Is it SDI's single largest to date? Mike must have been very impressed:
https://uk.advfn.com/stock-market/london/sdi-SDI/share-news/SDI-Group-PLC-Acquisition/81256262

Wholly financed from cash and loan facilities too, so not surprising that it's nicely earnings-enhancing straight away.

The price looks good value at £4.3m (with more for assets including cash) for £0.78m PBT, but more importantly:

"The Board has identified areas within Chell that have the potential for growth using the strong management team the company has recruited over the years"

SDI have proven that they grow businesses strongly once they're integrated, and this looks to have similar potential.

Good news this morning - the initiation of a new JV to develop and roll out hybrid power projects in the IC.

DKL will benefit from this in a number of ways as per the RNS. But the key phrase is surely:

"there is no requirement for Dekel, or its shareholders, to fund these projects".

So this is a win-win for DKL. It uses its local expertise and contacts to leverage progress for its European renewable energy company partner and benefits from the results - for no cost at all.....

Https://uk.advfn.com/stock-market/london/dekel-agri-vision-DKL/share-news/Dekel-Agri-Vision-PLC-Joint-Venture-agreement-with/81256341

Good to see relatively small buying pushing the price up this morning.

Great to be tipped by the one and only Gervais Williams!

Https://www.morningstar.co.uk/uk/news/197626/3-small-cap-stock-picks.aspx

"Inspired Energy is a company which helps larger companies and smaller companies actually deal with their energy workload to make the best use of their energy, to minimize their bills. It's got a fantastically long history. Over the last 10 years, it's built up from actually a sales of only about 3 million or 4 million right up to 60 million or 70 million, (which is that) – but most particularly, the last few months, the share price has peaked out. It's a market cap of just over 100 million. It's doing about 7 million in profit, but most particularly, it's actually overlooked. It's kind of P/E of 9.5 dropping to 8.5. It's got a yield of nearly 5, just under 5. And it's doing everything right. The share price has just drifted down, not a problem. We can buy some more.

Black: But energy efficiency seems like a very in vogue thing at the moment. So, could that be a good tailwind?

Williams: It will be a tailwind. What's been interesting is, they're just fantastically good at looking at their customers. For a long time, and I don't know if this is still true, but the last time I saw them, they'd never lost one of their largest customers. I mean, that just says sensational customer service in my view. And you really have to be so good at looking after your customers. There are competitors, and so they need to be very, very strong in their own market."

SCE's presentation at the Hardman forum on Tuesday can be seen here from 52 minutes in:

Https://www.lse.co.uk/media/hardman-investor-forum-primary-health-properties-open-orphan-surface-transforms-nsf.html

Tipped overnight on Master Investor as one of three companies ready to bounce:

Https://masterinvestor.co.uk/equities/aim-to-bounce-back/?utm_source=Daily+Bulletin&utm_campaign=b068ee4e8c-Daily_Bulletin_20191128&utm_medium=email&utm_term=0_25eff0bb7f-b068ee4e8c-34898813

Conclusion:

"Overall, I believe that the shares look like a good bet, with management being a particularly good asset here. What’s more, the business is strongly cash generative, with a £16.6 million inflow from operations in 2018, and the current order book represents just over a year’s worth of historic revenues.

Notable growth opportunities come from Network Rail’s current Control Period 6 (CP6) five-year financial period, which has had £48 billion allocated to its budget, with an increase of around 25% in planned spending on operations, maintenance, support and renewals activities, compared to CP5.

Renew shares have slipped a few percent since the October trading update, which seems unfair given that it was in line and there were no negative points.

In September this year, analysts at Peel Hunt initiated coverage on the shares and slapped on a 500p target price, implying upside potential of 33%. Top management seems to agree with that view, with the chief executive, chief financial officer and another director recently splashing out a combined £50,000 on buying the shares."

Tipped as a Buy in the IC - subscriber-only unfortunately:

Https://www.investorschronicle.co.uk/tips-ideas/2019/11/28/discoverie-strengthens-target-markets/

Edging up today - but still on a P/E of just 8.6 based on forecast 2p EPS for the year just about to start.

And that's without any earnings-enhancing acquisitions which are likely to come along soon judging by the recent presentation.

nice :o))

More detail on the Peel Hunt upgrade to 650p:

"DiscoverIE Group's results for the first half of fiscal 2020 show the extent to which the company's strategy has matured, Peel Hunt says. The U.K. supplier of customized electronics continues to deliver steady organic growth against a tough backdrop, Peel Hunt says. This places DiscoverIE alongside industrial companies such as Spirax-Sarco Engineering, Halma, Oxford Instruments and Diploma as players in the sector that have shown high levels of resilience in these markets, the brokerage says. Peel Hunt raises its target price to 650 pence from 530 pence."

Sellers cleared out perhaps....but still only on a P/E of 4.9 at 19p.

"Looking at the variables....
India - economy growth expected to increase to 7% next year. this should support future electricity prices.
PLF - this year 75%-80%, next year with plant upgrade 70% (included in forecasts), medium term 80%+
Coal Price - most market forecasts are for lower longer term coal prices. For FY202
OPG have hedged 60% which means they can be certain of CASH flow to reduce debt levels.
Coal Price - they are talking to miners about long term supply arrangements. This will be announced later in the year. This reduces the risk of market pricing and additionally gives even more certainty about debt reduction.
Environment - Coal is here to stay in India b/c it needs so much energy. India is no longer building thermal plants but it just cannot afford to shut down the current ones. OPG has one of the lowest emission levels of thermal producers.
Customers - they had extra capacity this year as some customers had reduced demand but did not sell it to new customers as they want to stick with their current client list and demand is expected to recover to normal levels in H2
Bad debt - this was a one off, long term dispute. It is notable that the PES of 2.0p for H1 is AFTER this bad debt charge.
Interest rates - these are falling in India which will be a big benefit for OPG
Tax Rates - India has reduced Corporation Tax Rate and indicated it will do so further

Solar - they are talking to several interested parties. Size is 63MW and normal prices are c.800kUSD per MW = 50mUSD so for OPG 30% stake = c.12m GBP (my assumptions are OPG to only receive 6m)

So I do expect bumps and volatility but the variables generally seem to be in OPG favour. The big negative that it talked about much here is Gupta and his 52% shareholding. Yes this exists but the other side of the coin is that he and the other directors (via LTIP) are very heavily incentivised to obtain a higher share price. In fact , I think it is reasonably obvious that at any time OPG could be bought by a multinational. The asset to that multinational would easily be worth 10 times EBITDA ie.. 360m less say 60m of debt = 300m (75p a share). As a PLC with one major asset, and a 52% CEO the listed price will always be much much less than this but as the debt is repaid the chance of a bid increases as the listed valuation is so much lower. This also puts a floor under the share price.

All IMHO, DYOR + BoL
OPG is in my top5 hldgs"

elsewhere by thirty fifty twenty is worth a read (hope he doesn't mind me copying it here):

"I think OPG is a very interesting risk /reward situation at 18p.

There are of course many risks which (I will outline at the end) but my strategy is looking for opportunities where the market is placing too much emphasis on the risks and thus the price is too low and has a chance to rise.

I think that OPG have been increasingly clear about their debt reduction plans, and it is simple maths that as time goes by, they make profits, they generate CASH, they pay down debt and this increases the value of the shares. There are bumps (operational, plant upgrading, coal prices, customer contracts etc..) but the strategy is quite simple and supported by the fact that India is a growing economy.

OPG very helpfully lays out the actual impact of this in the presentation. Taking their figures this is c.5p of value added to the shares this year and next year. That is equivalent to c.30% annual return! So even with a margin of safety there is a good chance of a 15% return per year (my strategy).

What I think is interesting with these forecasts though is the following year. Next year it is assumed that PLF will be down to c.70% whilst upgrades are taking place but the following year it will be back to 75%+, turnover will be up and the EPS fcts for 4p for FY 2020 to c.5.5p for FY 2021. I note also that the Cenkos fcst makes no allowance for lower interest rates in FY 2020 so I think their 3.9p fcst for 2020 leaves something in the tank. CASH flow in FY2021 would thus add closer to 6p to shareholder value in FY 2021.

On top of this there will be the CASH from the sale of the Solar assets (NBV = 15m, making 800k profit on 20% capacity. I have assumed future profits of c.3m and a sales price of > 20m (of which OPG have 30% and an option to buy a further 30%) i.e. I expect c.6m to OPG from the sale. This is another dent into debt, which because of the high interest rates in India would have a disproportionate impact on EPS.

So for all things being equal then at 18p I can see possible returns of 5p, 5p and 6p over the next 3 years which is very attractive. The downside (for me) is the 15p support the price has seen over the last 4 months."

Nice - Peel Hunt has hugely increased its target price to 650p (from 530p) and says Buy:

Https://www.investegate.co.uk/News/broker-forecast---peel-hunt-issues-a-broker-note-on-discoverie-group-plc/868012/

A good, solid update which will increase market confidence in the company.

Cenkos say Buy today, and have slightly increased this year's forecast to 3.9p EPS. That's a P/E of 4.7.

The £9.6m repayment of term loan debt in H1 is deemed to equate to a c2.5p increase in equity value per share.

Excellent interims as flagged - everything is nicely on course, high margin D&M work continues to rise, core markets are non-cyclical and growing, and the outlook is extremely confident:

"Since the period end, orders have continued ahead of sales, and with a record order book, a continuing high level of design wins and a pipeline of acquisition opportunities, the Group is on track to deliver full year earnings in line with our expectations."

Great to see Simon Thompson's 200p target for KAPE per the prior post.

Good coverage here, with an encouraging closing paragraph:

Https://www.technadu.com/kape-technologies-acquire-private-internet-access-vpn-early-2020/85391/

"If we take a look at the previous year of development of Zenmate VPN and CyberGhost VPN, one thing is sure. Both of these VPNs are going through a transformation, rapidly expanding their server networks and adding new features. Upon being acquired by Kape Technologies, both Zenmate and CyberGhost have managed to retain the trust of its subscribers. To learn more about these, make sure to read our Zenmate VPN review and our CyberGhost VPN review. And also, don’t forget to check our Private Internet Access review, as we were highly impressed with this VPN as well."

Good interview with the CEO - it all sounds very bullish:

Https://www.youtube.com/watch?v=0p6oje6aYaE

Big new Buy tip in the Investors Chronicle yesterday afternoon:

Https://www.investorschronicle.co.uk/tips-ideas/2019/11/26/rail-still-leading-the-way-for-renew/

Renew (RNWH) focuses on securing work on the non-discretionary spending programmes that maintain the UK’s critical infrastructure. Spanning the rail, telecoms, energy and environmental markets, the overwhelming bulk of the business is based in ‘engineering services’ – this now accounts for more than 90 per cent of group revenue and over 95 per cent of adjusted operating profit. Sales from the division rose by over a fifth to £565m in 2019, with accelerated activity at the end of the previous rail control period, CP5, driving 8 per cent organic growth. Adjusted operating profit also surged by 21 per cent to £39.4m, benefiting from a full year’s contribution from specialist rail contractor QTS, which was acquired last year.

Sustaining growth relies on being able to secure contracts on long-term framework agreements. The group won all the renewals frameworks it tendered for in CP6 as well as being awarded new positions – significant given that almost two-thirds of engineering services turnover is derived from rail activities. Expanding further into the wireless telecoms market, it also secured a new framework for MBNL to deliver EE’s 5G roll-out.

Peel Hunt anticipates adjusted pre-tax profit of £39m and EPS of 41.7p for the March 2020 year-end, rising to £41m and 43.8p in FY2021.

IC View
Net debt has more than halved to £10.2m and house broker Numis forecasts a small net cash position next year. Capitalising on long-term regulated budgets, Renew has avoided the uncertainty afflicting much of the construction sector, enjoying a high degree of revenue visibility. Activity levels in the first year of CP6 are said to be on track and further momentum could come as the group looks to enter markets such as highways and power infrastructure. Buy."

Had a change of heart and sold.

Finncap have reduced their estimates for this and next year to 18p and 19.2p EPS.

It's trading on quite an expensive P/E, and there doesn't appear to be a catalyst for a re-rating for a while yet.

There may be another acquisition, but you can't hold shares on that rather speculative basis.

On the other hand, without a catalyst the share price may drift down to 300p-320p, which would offer better value.

This was only an exploratory holding anyway, so I'll sit and wait for a while.