"LSE:JDG:Judges' head office is round the back of a narrow side street off Borough High Street in London. The door system has broken so a real person lets me in and we tromp up the stairs to a smart, airy, modern office suite acquired at a low ..."
"I'm wondering about Solid State. You're running a bit late with this one aren't you Richard?Yep. LSE:SOLI:Solid State reported its full-year results in July for the year ending in March. I'm not sure when it published its Annual Report, but I've ..."
pharma - I have similar reservations and have been looking at this again over the weekend. Richard's rationale is that the accounting is too conservative in amortising the intangible assets.
I'm struggling to get to grips with the relevance of that or not.
Like you I look at all the headline figures on the FT and other financial reporting sites and see low ROCE and low margins and a growing set of borrowing.
Richard's arguments also relate to the exceptionals and if you exclude these and look at the operating activity this is healthy, however, in the notes on the latest Annual Report it states that they don't take into account any outstanding debts the individual companies carry with third parties --- Eh whatt the F - that seems to make no sense to me.
The background of the dealmakers worries me less than the sheer logistics of grouping these companies together and allowing them to remain independent.
They say that they buy on a 3-6X valuation basis and that as a group the market then values them at 8X so it's a rerating exercise.
One worry I would have is that these small companies might have struggling businesses, that is certainly the case in 2-3 of them and the owners might want to take the opportunity to cash out and put their feet up.
Given that they are a group of companies operating independently, they may get a better financial overview and guidance from Judges corporate, but it doesn't appear that they group the sales efforts, so I find it hard to see where the economy of scale is coming from.
Interesting article from Richard Beddard. I no longer hold Judges because the return on capital employed (average of 4.8% over the past five years according to Stockopedia) is unsatisfactory but there are different ways of assessing this and Richard has calculated that the return on invested capital is satisfactory so perhaps the figures on Stockopedia are misleading. However, I think it is indisputable that the net debt has roughly quadrupled over the past 5 years to almost £8.7M so you could argue that any growth being achieved is being bought. I would also question whether the backgrounds of the dealmakers at Judges include enough technical and engineering experience to enable them to judge the value of the highly specialised companies they are buying. However, the concept if buying tiny niche companies producing high margin precision engineered components no-one has ever heard of is appealing so perhaps I am being too harsh in my judgement.
"Today, I'm talking myself into investing in LSE:JDG:Judges Scientific. It would mean investing in another investor, a prospect I don't usually relish.What does it do?It doesn't matter.What do you mean it doesn't matter? You never say that. It ..."
Citywire AA-rated value experts Anthony Cross and Julian Fosh have doubled their stake in lab-grade measuring systems maker Judges Scientific (JDG) after its shares dropped 25% on a profit warning.
The managers increased their holding to more than 10% of the business worth £8.3 million at a share price of £13.40, down from £18.10 over the last two months.
The shares are held in their £451 million Liontrust UK Smaller Companies fund, with a smaller stake in Cross £424 million UK Micro-Cap fund.
Judges Scientific plunged in May after it warned weaker orders would negatively impact profit. The sell-off took the shares to the lower end of an 18-month trading range. The group recently said that it was more confident about the remainder of the year but reiterated earnings would disappoint.
WH Ireland rates the company a strong buy on a price target of £16.
In addition to the recently disappointing trading, investor sentiment for smaller companies is weaker which is also having an effect on the share price. However I would agree with the recent Motley Fool brief which suggests that this offers a buying opportunity. The financial strength of Judges Scientific should see it through the current bad patch even if it lasts for an extended period. Taken as a whole, management still has a good record which I judge is likely to be maintained over the long term.
It's been a hugely disappointing year for investors in Judges Scientific (LSE:JDG), with shares in the scientific instrument designer and manufacturer falling by 35% since the turn of the year. Indeed, shares in the company are down 14% ..."
I have watched this share for some time. The rise has been steady and consistent however in the last month it has nose dived. I have not been able to find a reason, the half year figures are due next month. Are they expected to be dire?
Have the share been heavily shorted?
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