Research Tree | Equity Research for Investors

03 Aug 21

Somero Enterprises - Fill your concrete boots

he stock has enjoyed a sharp bounce back since the COVID-19 lows in March 2020, reflecting successive upgrades backed up by the strength of its cash generation. Whilst 13x 21E PE remains at the upper end of its recent valuation range, the positive outlook for US non-residential construction, structural growth trends behind new products and the potential for a significant cash return over the next three years (we estimate the group can return c.20% of its market cap) means we remain positive. We

Companies: Somero Enterprises, Inc.

29 Jul 21

Strong trading continues in FY22

Volex has issued a positive AGM trading update highlighting that it expects to deliver underlying operating profits for FY22E slightly ahead of current market expectations. It notes that the levels of customer demand it experienced in H2 FY21 has continued in Q1 FY22E. Cash generation remains robust and management continue to advance acquisition opportunities, which we expect to deliver future accretion. We have upgraded our adjusted operating profit estimates by c.5% and see Volex as well place

Companies: Volex plc

29 Jul 21

Excess capital accumulation

The quarter enjoyed the ongoing recovery in revenue margins and net provision releases further boosted by a portion of the announced tax gains. The question is not at what pace profitability will recover but instead at what pace will it normalise? In the meantime, the group is accumulating excess capital that will be returned to shareholders.

Companies: Lloyds Banking Group plc

27 Jul 21

LIBERUM: Sylvania Platinum* - Hitting guidance, no disruption

Companies: Sylvania Platinum Ltd.

04 Aug 21

Cenkos: Seeing Machines Ltd -- FY21 finishes ahead of expectations

Seeing Machines, the advanced computer vision technology company that designs AI-powered operator monitoring systems to improve transport safety, has released a trading update for the year ended 30 June 2021 announcing revenues of A$47.3m which is 2% better than our forecast. Over 100,000 new vehicles have hit the roads with Seeing Machines' Driver Monitoring System (DMS) technology embedded which is above the 90,000 assumed in our model. This is just the start of production and these royalty

Companies: Seeing Machines Limited

29 Jul 21

LIBERUM: Vertu Motors - Used car momentum continues

Companies: Vertu Motors PLC

04 Aug 21

Improving rates environment in the UK drive the recovery

Legal & General’s performance in its H1 21 release came with a certain satisfaction. Most of it is attributable to an improving rates environment and strong performances, finally, from LGC and LGI.

Companies: Legal & General Group Plc

30 Jul 21

Powerhouse Energy - AGM Sets Timetable on Protos

Powerhouse’s AGM statement has set revised timing for the completion of its first project at the Protos site with a 2023 completion now expected. With the company adding key resources the new timetable is being de-risked in our view and the loan from the company to the project has already reduced supply chain risk on key equipment lead times. While we will review our forecasts for the new timing, we think the company is making real progress towards establishing its technology and we see the addi

Companies: Powerhouse Energy Group PLC

29 Jul 21

Underlying business recovers, full-year earnings outlook reiterated

In its first Litmus test after an ‘ambitious’ CMD in June 2021, the British giant has put up a decent show. The group witnessed recovery in the base business, particularly in vaccines which benefited from the sales of COVID-19 vaccine adjuvant. While the near term continues be tricky due to resurfacing COVID-19 concerns, encouraging trends on the COVID-19 vaccine / treatment front and growing HIV and oncology prowess should calm the nerves.

Companies: GlaxoSmithKline plc

02 Aug 21

Cenkos: Duke Royalty Ltd -- New royalty partner: Creō-tech

Duke has announced its third new royalty partner since April's placing, with a C$8.3m (£4.8m) agreement with Creō-tech Industrial Group Inc (“Creō-tech”). This scheduled new partner is another buy & build platform, with follow-on deployments expected. It represents Duke's 12th current royalty partner and its first in North America, adding diversity in number and geography. This should further add to the anticipated step-up in quarterly cash revenues from Q2/22, after Q1/22's £2.9m record.

Companies: Duke Royalty Limited

04 Aug 21

LIBERUM: Thungela* - Initiation - Pure, undervalued coal exposure

Companies: Thungela Resources Limited

02 Aug 21

Powerhouse Energy - Adjusting for New Timings

Following last week’s AGM comments on project timing we have amended our forecasts, shifting early numbers to the right in the timeline. While this impacts FY 21 and FY 22 forecasts the hit further out is minimal. As a result, the impact on valuation is not onerous with our base case valuation dropping 9% to 4.9p from 5.4p. Factoring in early European opportunities would give us a valuation of 7.0p and adding APAC opportunities and fuller European potential would get us to 11.7p.

Companies: Powerhouse Energy Group PLC

28 Jul 21

A year of material profit growth and cash generation

Hargreaves’ FY21 results confirm a period of material profit growth and cash generation. It has been a transformational period, in which all direct coal related activities ceased, HRMS profits surged and net debt was eliminated. As expected, the first 12p additional dividend has been proposed (total FY21 DPS 19.2p) and we expect this to recur for a further three years, at least. As we wrote in our recent detailed note, Hargreaves has been wholly repositioned and now has genuine momentum. The sha

Companies: Hargreaves Services plc

29 Jul 21

Major contract win and Olympic success

Directa announced a significant contract win yesterday, its second major contract with OMV Petrom for waste treatment services using Grafysorber. The four year contract has a total value of €3.2m (c.€0.8m per annum from August 2021). This provides underpinning for current forecasts and builds on recent contract momentum. Meanwhile, there has been further success at the Olympics for cyclists wearing jerseys printed with Directa’s graphene (the Planar Thermal Circuit). The medal haul so far is fiv

Companies: Directa Plus Plc

04 Aug 21

Diagnostics: a COVID booster…

COVID-19 cases have recently increased in Europe, with the delta variant rapidly spreading across the region even in the context of good vaccination levels. Given the increase in cases, we think testing will continue to be important as the vaccines aren’t 100% effective and there is always the risk of vaccine escape variants. Following the rapid development of a COVID-19 diagnostic tests (a validation of the Bio-Medical investment strategy, in our view) BATM has continued to innovate and has dev

Companies: BATM Advanced Communications Ltd.

04 Aug 21

Admirable If, the rest is enhanced by strong investment income

Sampo released, again, a strong set of results and part of it is due to the studious If. The rest is highly attributable to better investment performance yoy. Some doubts remain after the Nordea exit but, until then, investors should be rewarded with lucrative distributions.

Companies: Sampo Oyj Class A

04 Aug 21

H1 21: how to use cash?

Bekaert posted record H1 21 on every line. With a positive alignment of the volume rebound, skyrocketing raw material prices, and improving price/mix, the underlying EBIT margin landed at 12.4%. Management has started to weigh up M&A options to use the rapidly growing cash pile. Mid-term outlook was upgraded only two months after Bekaert’s CMD.

Companies: NV Bekaert (BEKB:EBR)Bekaert SA (BEKB:BRU)

04 Aug 21

Improving rates environment in the UK drive the recovery

Legal & General’s performance in its H1 21 release came with a certain satisfaction. Most of it is attributable to an improving rates environment and strong performances, finally, from LGC and LGI.

Companies: Legal & General Group Plc

04 Aug 21

A nice start into FY21/22

The results came in quite substantially above the company-compiled consensus at result level Growth was particularly strong in the Steel division and Metal Forming on both higher prices and volumes The aerospace segment’s performance is still subdued The outlook for the current year makes our forecasts conservative We will revise our numbers upwards

Companies: voestalpine (VOE:VIE)voestalpine AG (VOE:WBO)

04 Aug 21

Hopes to enjoy more summer sunshine

NHH delivered surprising H1 results that beat the market and improved further its liquidity and debt positions. The encouraging trading trend seen in recent weeks released positive signals for a constructive summer performance.

Companies: NH Hotel Group (NHH:BME)NH Hotel Group SA (NHH:MCE)

04 Aug 21

H1 21: positive net income possible for FY21

Fraport’s H1 21 performance was largely driven by one-offs, but the group’s structural improvement was visible through positive EBITDA contribution from all its airports. The group currently sees a positive trend in the traffic, especially in Russia and China where the Q2 traffic was almost at the level of 2019. However, the group’s operational improvement is overshadowed by low FCF due to severance payments and high capex.

Companies: Fraport AG

04 Aug 21

Q2 21: solid results, well set up for C-Band deployment

SES published strong results, broadly in line with consensus. It is expecting growth in its second half of the year and has readjusted its profit floor guidance upwards for the full year. The C-Band deployment is on track. SES confirmed it is taking care of its shareholders through impressive shareholder returns.

Companies: SES (SESG:EPA)SES SA FDR (Class A) (SESG:PAR)

04 Aug 21

H1 21: growth propelled by Italy

Buzzi released its H1 results with net sales up by 5.8% (+4.5% lfl), the growth driven mainly by Italy, which benefited from the strengthening in domestic demand and an easy comparison base. FX had an unfavourable impact of €81m and €22m on sales and EBITDA, respectively. For the full year, EBITDA is still expected to be below FY20’s level.

Companies: Buzzi Unicem (BZU:BIT)Buzzi Unicem S.p.A. (BZU:MIL)

04 Aug 21

CyanConnode* - New Africa Contract

CyanConnode has announced that it has received a new contract from for a smart metering deployment in Africa. Following the recent equity raise and increasingly positive momentum in news flow, we view this contract as a good example of CyanConnode continuing to expand and diversify away from India and gaining support from new customers. Buy.

Companies: CyanConnode Holdings plc

04 Aug 21

Lower-than-expected cost of risk

The quarter enjoyed a lower-than-expected cost of risk whereas the pre-provision performance came in line with former trends and expectations. In this context, the group’s full-year net profit guidance will be easily met.

Companies: Intesa Sanpaolo (ISP:BIT)Intesa Sanpaolo S.p.A. (ISP:MIL)

04 Aug 21

Melia is waking up

Melia delivered H1 results that beat the market and managed to turn its operating cash flow positive in June as well as strengthen its solvency. The encouraging trading trend seen in recent weeks released positive signals for a constructive summer performance.

Companies: Melia Hotels International (MEL:BME)Melia Hotels International, S.A. (MEL:MCE)

04 Aug 21

Thermo Fisher Scientific Inc. - Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation

Thermo Fisher reached the target price from our last report as the company had a solid quarter with revenues shooting up 34% and an organic growth of 28% as compared to the prior year's quarterly results. The company’s core business of diagnostics and healthcare were major contributors to this growth and are well to reach pre-pandemic levels. Its immunodiagnostics and transplant diagnostics businesses showed a particularly robust performance. However, Thermo Fisher witnessed a visible slowdown i

Companies: Thermo Fisher Scientific (TMO:NYSE)Thermo Fisher Scientific Inc. (TMO:NYS)

04 Aug 21

Church & Dwight Co., Inc. - Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation

Church & Dwight had a decent quarter and the company managed to deliver a 4.5% organic growth after increasing consumption in 13 of the 16 categories in which it operates. The top-line performance has been decent given the fact that the company was a heavy beneficiary of the pandemic-infused demand in 2020 and is facing tough comparables this year. The management saw a double-digit consumption growth in 9 of its 13 brands in various categories including gummy vitamins, stain fighters, cat litter

Companies: Church & Dwight Co (CHD:NYSE)Church & Dwight Co., Inc. (CHD:NYS)

04 Aug 21

Mondelez International Inc. - Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation

Mondelez delivered yet another all-around beat as it benefitted heavily from the persistent snacking trend across the globe despite the resumption of foodservice. The management continued its acquisition-led growth strategy and went on the acquire European cake and roll manufacturer Chipita for a consideration of $2 billion. With this acquisition, Mondelez added another $580 million to its top-line growing at a high-single-digit rate and of course, 13 production facilities. The positive snacking

Companies: MONDELEZ INTERNATIONAL INC-A (MDLZ:NYSE)Mondelez International, Inc. Class A (MDLZ:NAS)

04 Aug 21

Another good set of results

Wolters Kluwer raised its FY21e guidance on the back of very solid H1 21 results, with robust FCF generation and improved operating trends across all divisions and geographies.

Companies: Wolters Kluwer NV