In our previous note we derived a valuation based on a simple ROE/COE model using an assumed sustainable ROE of 24% (in line with our current FY17 estimates) and a growth rate of 5%. On the same assumptions, applied to the slightly higher H117 NAV, the implied value is 194p (previously 189p). Alternatively, the current share price would imply an ROE of c 17%, which seems cautious given the average over the last five years has been 36%.
It seems highly unlikely, having paid 4.5p at the interim stage, that the final, or second interim, will be less than last year`s 5p. 9.5p total would be a yield of 8.2% at a share price of 116p so there could be room for a further increase in the share price into the 120s or higher. A 7% yield would give a share price of 135p.
Whatever happens, the period of share price doldrums should be over.
Nice to see a positive market reaction to some CNKS results! And a nice dividend to boot.
No idea if they will be able to replicate this for the full year (I suspect not, as they mentioned H1 had been boosted by Eddie Stobart IPO), but it goes to show this company is far from dead and I will continue to hold.
I believe it might have something to do with growing belief that London will get the Logicor IPO - the biggest since Glencore - breathing some life back into London being a place for the future to raise money, which is Cenkos' oxygen obviously.
Beginning to wish I had averaged down! But never mind, I would be happy just to see this one get back on its feet.
The price seems to have picked up since the beginning of the year.
No idea what is causing it. Maybe IPO activity is increasing ?
I think we are due a trading update around 2nd week in Feb. So that may give us an insight.
I'm in exactly the same boat. This is by far my worst dog of a share.
I can appreciate the uncertainty that Brexit has brought to this company - we have no idea whether London will maintain its dominance (within Europe at least) for raising money. If it does, CNKS should recover. If it doesn't, this company will be in big trouble.
I don't feel I can do anything until the company comes out with some sort of outlook statement which I think is overdue.
It was really annoying to read the upbeat RNS from Cenkos. With dire results it would be reasonable to start from that point and try to explain how they are going to rectify it - not just say how brilliant they are.
That said, it is possible that the shares are now oversold and this worth watching to see if it could be a recovery opportunity - but definitely not buying yet.
Relieved to put the whole Quindell episode in the rear view mirror (particularly as I took a massive hit on Quindell myself), not much of hit really.
The main question is what demand there will be for AIM listings during the next few years of BREXIT uncertainty, and what alternative sources of income can Cenkos find until the market recovers?
I have resolved to hold for now, even though I am not brimming with confidence. Cenkos is only 2.83% of my portfolio, so failure wouldn't be particularly painful. Missing out on a recover would be more painful, as I think there is more upside than downside.
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