"A debate in the office about which companies to cover Wednesday involved LSE:DPLM:Diploma, then up 8% on an in-line trading update. As a company we hadn't covered previously, it looked ripe for an introduction to readers.However, further digging ..."
" With organic growth hampered by economic headwinds in North America and Europe, LSE:DPLM:Diploma had to rely on M&A this year. Full-year results from the supplier of specialised products to the life sciences, seals and controls markets beat City ..."
I'm always nervous after buying shares in a Company for the first time. DPLM is looking more promising as time goes by. The fundamentals look solid. They have a speciality type niche so should not face too much competition. The PE and EBITDA/EV suggest fully priced so IMO a weak buy at these prices but a strong one if SP falls significantly without good reason.
I do not understand why SP moves around so much without any news, at least that I have seen. Fri to Tue down 4% then today up 5.2%. I'm not complaining as back in profit from recent purchase on 11 Feb.
The last few days volume has risen from less than 50K shares traded a day to 232K yesterday and today volume already above 50K at 9 AM. In Nov and Jan when volume rose it was followed by a fair sized increase in SP. IMO SP is set to to rise considerably in the next couple of weeks. A big ordinary trade of 50,000 shares went through at 8:16 this morning at 805p. I am guessing it was a buy.
I'm now in the black from modest sized 1st purchase of DPLM on 12 Feb. @ gross cost 785.165p a share. Onwards and upward I hope.
I like this as a probable growth stock. Most fundamentals for it are good. Not cheap but today's fall makes me think it might be worth buying now. Gross margin has increased and PEG of 1.27 is a slightly higher than ideal. I am wondering now, why has SP fallen about 3.5% today? No new broker news. I am going to put it down to profit taking as SP had risen above mean.
I think I will buy some today and more later if I feel it is right to. This is in case it has more to fall before getting back to trend.
Diploma stated at the time of their prelims that "...Given the strong comparatives and the uncertain macroeconomic backdrop, the Board expects growth to trend this year towards our target "GDP plus" rates..." and their update conforms to this:
Lambrini girl - I find your posts very misleading and many people are influenced by these in their by and hold decisions. Diploma is my best performing share and was my second highest holding. When I read your post you put some doubt in my mind and I sold half my holding. Since then the share price has risen 10% and I missed the dividend.
If you cannot be bothered to justify your target prices with some information to help private investors like myself, then please don't randomly place target prices saying sell. In future I will be ignoring your posts as I have found you to be wrong on many of your predictions / guesses.
A quick look at a DCF valuation, taking their latest FCF and assuming growth of 8% pa over the next 10 years and 3% in perpetuity, discounting this by their cost of equity (9.5%; DPLM is a company with a low beta) you arrive at a fair value of about 740p. That provides a margin of safety of about 15% on today's price.
They do sit at a premium to the sector on P/E, P/BV and EV/EBIT valuations, but consistent quality does come at a price.
Today's price might be considered good value for a long term hold, as the price has been brought down by forex issues, but insufficient upside for a short term hold.
Just my immediate thoughts on DPLM ( I hold them ion my growth portfolio and have done for 15 months).
Decent but unspectacular results. Reasonable increase in the interim dividend, but the company seems to be very much over priced, as far as I'm concerned.
I will be staying away for some time yet.
Totally agree. The volume of trades in Diploma are very low so any substantial sale or purchase will have the potential to move the price either way. I am guessing, but suspect someone is getting out today with a short term profit. Hence the drop in price.
My perception of Diploma's statements on future sales / profits are that they are very conservative. I have held these shares for a number of years and cannot see any reason to sell.
Growth for the FY is forecast at ~8% with forecast eps of 36p. At the moment, with momentum against it, I'd say it'd be cheapish at 450 to 480p ?
Half year results are due on the 13th May. i like the company, don't really understand why the market's turned against it and I'm keeping it on my watch list but have no burning desire to buy while it's dropping.
Pretty much as expected. Revenue growth of ~10% but with slightly reduced margins. I still think it's a tad overvalued and Diploma dropped tantalisingly close to my stop on Friday but is still hanging in there. I'll let it roll and see if it perks up
Doesnt look particularly toppy to me. PE is 21.5, but EPS growth has doubled in 5 years as it continues to grow in the mid teens consistently each year. Could fall back a bit, so it might be worth taking some profits, but I think I'll hold as it has so consistently increased profits each year.
I'm only guessing but since the vast majority of income comes from abroad and with the pound falling it could been one of two things.
Higher profits due to exchange rates or
Cheaper to buy if your a foreign company.
Only a guess.
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