Not the first time I've done well out of this much overlooked share. Barely gets a post on this board which normally flags a potentially decent share up on my radar. However I sold because the H/T results out today were poor with little prospect of improvement in the short term. It didn't stop the sp from surging today, but now I think it's well overbought.
Sold today @ 275p, having bought in Feb for 196, plus a chunky final div. But I will be back in if the sp retreats to a decent value.
Read Panmure Gordon & Co's note on MORGAN ADVANCED MATERIALS PL (MGAM), out this morning, by visiting https://www.research-tree.com/company/GB0006027295
"Although the share price has fallen 32% in the past 12 months, we are still struggling to put together a compelling case for investment. We are not hiding behind last Fridays trading update which was again littered with the word challenging; even when things were not challenging between 2012-2014, Morgan struggled to deliver. Essentially, we see nothing special about the new strategy which..."
Afternoon there! I do believe the recent rise in the share price has been almost helped much by the falling pound. If UK do however decide to leave the EU, I don't think this would bode well MGAM's share price.
Well results weren't too bad considering they've had a 'very challenging' year in all markets globally. They can't really afford to pay a div at the current rate but decided nevertheless to maintain it.. PBT £59m (£31.5m), eps !!.9p (2.7p). But debt is creeping up to £216m (207m). They were already overstretched, and really need to rein this in. If their global businesses continue to worsen they will be forced into a rifgts issue tor open offer to survive.
However the market liked these results and the sp shot up first thing by 7%, Not sure it was totally merited though.
This share has all the hallmarks of a good recovery play. It's certainly a cyclical stock and has proven quality having survived many a recession. It is now near a 6 year low after downturns in their major markets in China, US and Brazil. Perhaps a little bit early to be buying now, but I would be slowly adding below £2, having bought my first tranche at 192 a few days ago. Div at well over 5% yield (210p), forecast cover 1.9. FY results are out 23 Feb. Hopefully no big, nasty surprises that the sp fall-out hasn't already accounted for.
It's notable that on the few good stock market days we're having currently in this bear market this share tends to outperform, which suggests that the shares have been in the hands of shorters.
Analyst Jeffrey International rated this a hold (26 Jan).
"The deeper-than-expected global slowdown forced analysts at Investec to revisit their forecasts for Morgan Advanced Materials, but they reiterated their underlying upbeat view on the company's prospects.
Despite the advanced materials manufacturer's considerable diversification, both geographically and by end-market sectors, weakening confidence in North America - a major trading region - was affecting a broad range of its markets, analyst Michael Blogg said in a research note sent to clients.
Notwithstanding that de-stocking might lie behind the weakness in markets such as consumables for the rail industry or auto components, "further adjustments are needed," he said.
Blogg said he expected consensus estimates for operating earnings on an EBITA basis to be lowered by between 5-10% as a result of the firm's cost reduction measures.
The analyst placed his target 'under review' but stuck by his recommendation to 'buy'."
I think the market isn't buying into a share that's going to have surpressed demand as a result.
Having said that, I do think the share is now at a very, very good opportunity this week. I believe it goes on ex-dividend on the 6th of November? This company in a better opportunity than others to build upon any uptick on demand. Personally I'm not worried for now, holding.
"The late American investor Philip Fisher once said that regularity and dependability are the most important but least discussed aspects of dividends. He believed that consistent, progressive dividend policies were more appealing than a stock that ..."
Good morning! Well, the published trading update confirms that Morgan are on an ever growing 3% incline! :D
No but seriously, 3% revenue growth is modestly good. Won't be enough to increase dividend aggressively without eating back into it's own cash. The costs of restructuring have continued to rise (Now almost double since last update?) unfortunately, I was hoping to see a nice increase of profits after the exceptional costs were no longer factored in.
But the next 3% growth will be for sure from the completion of the two factories, with no date for completion noted. It's a very safe hold with good future prospects. The recent dip to the 260 share price was an very attractive buy in price, i should think 290 is reasonable too, but I believe it won't move any higher than 350 for a while.
Some stocks fall after GOOD NEWS! ....IS it just normal levels of profit taking? Yes, imo. BUT the underlying reason for many pi's taking early profits, is simply they are afraid they'll be left in paper losses!
Thus, if the stock, after 'good news' is then shorted, then kiss good bye to this stock reaching new highs?
The 'shorts' therefore 'win' their bets, whereas the 'longs' lose the best part of their investment, possibly for some time to come......and just when you thought this couldn't go any lower, THEY'LL SHORT THE STOCK AGAIN !
Why is this? They both can't win...the money has to come from somewhere?
Thanks for all your support. We are now at 4,330 votes!
AND SOARING !
(that's A LOT of irate investors!)
Investors are saying something? They are voting in their thousands !
Bookmark the links if you wish to 'pass the LINK/s on'.... or read later?
BE A PART OF IT
# The big problem with shorting is that THEY (the shorters) WOULD most likely lose most of their money IF they just 'bet' on the price going down without trying to 'help' it down?
So, there is the 'catch 22' scenario. No one would know of an RNS to be released that will contain BAD NEWS, if they did and then 'shorted' the stock, then they are guilty of 'insider trading'.
The only sure way to short a stock and WIN is to spread dis-information to defame the company with help from other posters that are in concert with them. To ENSURE that they don't lose the biggest part of their 'short', ironically, then, they must deramp with (seemingly) believable posts.
When the pro's do it, they simply get the media or well known 'crooked' tipsters, analysts or brokers to do it for them. (say no more). .They're all in cahoots with each other!
The campaign against shorting is for the benefit of the 'cheated' investors that cannot control their investments due to the dirty tricks played out by co-ordinated deramping in order to tank the sp to abnormally low levels.
When the campaign is complete, the results will be reviewed by Govt legislators re- further action! The branch of the FSA ie FCA will be asked by Davide Serra to conduct an investigation into short selling practices, with the view to either:- an outright ban on short selling, or at the very least to be better and more vigorously regulated !
The HMGovt epetition is a regulated and monitored site with legal authority that will NOT under any circumstances allow any auspicious individuals to prevent 'others' from casting their free votes. Discussions of which are freely entered into with individual viewpoints.
For me, it was a very long awaited IMS. MGAM has been quiet on the news front for quite sometime and the recent RNS practically mentions very little, apart from an increase of 3% in the order books, but at least that still retains that MGAM is quite healthy, and business most importantly isn't decreasing.
Well, Half year results show an operational company, alas one on slow growth. It's got a long way until it meets pre-2012 standards, but if even then, that might take another 1-2 financial years yet. It's still a safe company to have on your mid-term portfolio with it's ever healthier dividend yield, one that takes much advantage of the SCRIP system too.
I just fear there's growing risk within the company. Debt has risen back to pre-2012 levels where profit & revenue was much healthier; much of the industries that Morgan are related to currently are going through stagnant budgets. I don't see the share price hitting 350 this year, but rather it hovering around 280-320 for another year to come - worth holding for next 3 years, but if I'm wanting to see a short-term return, I'd easily have to look else where.
Furthermore, time will time if the re-structure has had positive effects! It's almost resulted in £18m in costs and advertising over the past year (despite them stating it's delivered £10m in cost-saving)
"Jeffries: bide your time on 'unloved' Morgan Crucible
Industrial ceramics specialist Morgan Crucible (MGCR.L)'s valuation is attractive, according to Jeffries analyst Andy Douglas, but it's a bit too early for him to upgrade his 'hold' recommendation.
The company's annual results were better than Douglas had expected, but underlying pre-tax profits were still down 25% on last year at £89.7 million, and reorganisation plans revealed last week weren't as radical as he'd hoped they might be.
'The group is generally unloved, and the group's valuation differential with the UK Industrial sector is reasonably appealing,' the analyst said. 'However, we stay at Hold until there is greater comfort with our full-year forecasts.' His target price rises from 260p to 320p.
Shares in the group closed at 300.5p on Monday, down 4.5p or 1.5%."
Interesting to see some institutional level buying in the face of weak broker opinion. There have been 20,000 and 30,000 chunks of negotiated trades happening in the last few days, which I guess is the cause of the rising price......
"Credit Suisse has DOWNGRADED Morgan Crucible to UNDERPERFORM from neutral and target to 260p from 290p. F
our factors underpin the downgrade: poor cash conversion track record, no improvement in ROIC, organic growth and EBITA margins that lag the sector average and the fact that Morgan is overvalued versus the UK capital goods sector. Shares closed Tuesday at 287p."
"Goldman Sachs takes a look at the European capital goods sector and has UPGRADED Morgan Crucible to BUY from neutral while also lifting the price target to 340p from 285p. Notes Morgan Crucible has underperformed the sector by 26% over the past 12 months in Euro terms. Now sees an excellent entry point.
Says the group is shifting its focus towards higher value added business, specifically tailored to individual customers. Also, says MGCR can continue to deliver pricing in excess of cost inflation into 2013/2014. Shares closed at 272.9p. On the sector as a whole, sees scope for further earnings upgrades amongst those companies geared to global growth."
"Engineers serve recovery warning Falling steel production during the third quarter, particularly in Europe, will put a massive dent in profits at Cookson this year, the industrial materials company has warned. Its shares slumped and City analysts have cut forecasts again. And it doesn't look great for peers such as Morgan Crucible and Bodycote , either, given newsflow hints heavily at a further slowdown in production of trucks, cars, agricultural equipment and solar panels.
Strip out China and average monthly steel production volumes for July and August were 3 per cent lower than the average monthly run rate in the first half, according to the World Steel Association - in Europe it was 11 per cent. The seasonal pick-up in September didn't happen this year, either. In fact, steel output is still falling in the US, Europe and Brazil.
That's clearly bad news for Cookson's core engineered ceramics division. Making pipes and valves used in steel production chipped in almost two-thirds of revenue and profits in the six months to June, but management thinks the second half will be much worse. Analysts at N+1 Singer have sliced earnings estimates for 2012 by 10 per cent, implying a second-half profit for the division of £65m, down around 25 per cent on the first half.
What's more, the solar business continues to lose money, too. Cookson has already closed its plant in the Czech Republic and now one of the two factories in China is for the chop. None of this is good news for Morgan Crucible, whose kit is used in both blast furnaces and solar panels. Bodycote, meanwhile, flagged a softening at its Europe-dominated automotive and industrial operations back in July and there is unlikely to have been much improvement since.
On the plus side, Cookson's performance materials unit is still busy selling solder for the iPhone5 and tablet devices. A decision on whether to hive off this business will be made before the year-end.
Cookson's warning is a wake-up call and clear evidence that talk of a global recovery is premature. While the break-up story should support the shares, there are no obvious catalysts for a swift recovery, so we exit our buy recommendation (565p, 12 November 2010) and downgrade to hold. We're exercising caution ahead of updates from both Morgan Crucible (Buy, 247p, 24 July 2012) and Bodycote (Buy, 327p, 26 July 2012) in a few weeks' time, too, and cut both to hold. "
As usual we have an analyst recommendation that makes no sense at all. The share price is 250p, the analyst's target is 300p and the recommendation has been downgraded from a 'buy' to a 'hold.' on the basis that there might be a series of downgrades following the 1st half results. If the analyst thinks the share will fall in price, then the recommendation should be to sell, while if the target is 300p the recommendation should be to buy. I expect the price to fall to £2, then that will be time to buy.
"Jefferies has downgraded its rating for materials group Morgan Crucible from 'buy' to 'hold' and slashed its target for the stock from 365p to 300p ahead of the firm's first-half results tomorrow.
"After deliberating very hard, we take a more conservative stance on Morgan going into Tuesday's 1H12 results and lower our recommendation to 'hold'," the broker said in a research note on Monday morning.
"Morgan's valuation is not expensive, in our view, and there are reasons to be positive over the longer-term, but we expect a muted 1H12 update and risk of consensus downgrades."
I hope the results are positive for the sake of all holders.
Am surprised at the current SP weakness over the last 3 months as this company has been outperforming its rivals for the last several years. What do people think? I bought this well and it remains a long term hold.
"In spite of the market's negative reaction to Morgan Crucible's trading update this morning, Jefferies has reiterated its buy rating and 365p target for the industrial materials group.
"Today's update is 'in line' but not particularly upbeat (both as we anticipated). The regional, end markets and divisional trends were largely as expected, although the four-month performance to end April arguably a touch softer," said analyst Andy Douglas.
Nevertheless, the broker still says the shares are cheap relative to the sector ("more so after being down c7% on Friday"). "Any share price weakness today should be considered a medium term buying opportunity," Douglas said."
"The column (Times Tempus) also touches on the high tech carbon and ceramics manufacturer Morgan Crucible, highlighting a very strong trading update yesterday, with a dividend increase of 20% but Tempus does not provide a recommendation.
In the Telegraph, Questor is not so shy. The column takes a look through Morgan Crucible's results: a pre-tax profit rise of 64.5% for 2011 with sales growing at 8.2%, and again, that rather tasty dividend increase.
The strategy of developing "differentiated" products to then sell at high margins, combined with a focus on emerging markets is clearly paying off for the firm. It is also a genuine British manufacturing success story to bring a tear to the eye of people who still believe there is a future in making things in this country. The stock rocketed yesterday but at 11 times earnings, Questor still says buy."
"Evolution Securities reiterated its "buy" recommendation for Morgan Crucible (MGCR) with a target price of 370p. The broker believes that the market has not fairly valued the potential of the carbon and ceramic products manufacturer's Superwool product. Superwool is progressively replacing refractroy ceramic fibre, and Evolution notes that it is already more commonly used in Europe that RCF. While Morgan has a 30% share in the RCF market, it has a 60% marketshare of Superwool and as the product becomes more popular globally, the broker expects the firm to benefit from higher profit margins. The shares tumbled 9.6p to 233.4p."
"Evolution Securities issued a "buy" rating for Morgan Crucible (MGCR), the industrial components manufacture and supplier, with a 375p target price. The broker believes the group's ambitious target of doubling 2010 pre-tax profit by 2013 is achievable, and, as the rationale and scope become better understood, the stock should start to fully reflect the potential upside. With that said, Evolution thinks the series of presentations that are currently being presented by the firm could act as a "significant" catalyst to drive the stock towards its current price target. Shares in Morgan pushed ahead 4.9p to 296.7p."
"Credit Suisse keeps an underperform rating on engineering group Morgan Crucible, as the share price is close to a 40-month high.
The release of group targets by management on 16 February, that included a doubling of underlying 2010 pre-tax profit of £75.7m by 2013, has provided a road map to both the expected future group progression over the short to medium term as well as a bench mark against which to measure performance, the broker says.
While management has given increased guidance on profitability, Credit Suisse believes the targets are financially stretching versus historic performance and as yet the finer details of the transition are yet to be released. The broker remains cautious until further clarity.
However, the price target is raised from 230p to 267p to reflect a 2% and 5% upgrade to pre-tax profit forecasts for 2011 and 2012, respectively. "
"Arbuthnot maintained its "buy" recommendation for Morgan Crucible (MGCR), the industrial components manufacturer, with an increased target price of 330p, up from 309p. The broker thinks the group's technical prowess its knowledge base and ability to deliver bespoke components and assemblies in specialised non-metallic materials for demanding applications is the bedrock of the company's growth and margin potential. Coupled with management's commercial focus and record of execution, Arbuthnot added, the new financial targets look eminently achievable. Morgan Crucible shares pushed ahead 13.5p to 301.5p"
Important message from the Financial Conduct Authority:
Posting inside information that is not public knowledge, or information that is false or misleading, may constitute market abuse.
This could lead to an unlimited fine and up to seven years in prison.
If you have any information, concerns or queries about market abuse, click here.
The content of the messages posted represents the opinions of the author, and does not represent the opinions of Interactive Investor Trading Limited or its affiliates and has not been approved or issued by Interactive Investor Trading Limited.
You should be aware that the other participants of the above discussion group are strangers to you and may make statements which may be misleading, deceptive or wrong.
Please remember that the value of investments or income from them may go down as well as up and that the past performance of an investment is not a guide to its performance in the future.
The discussion boards on this site are intended to be an information sharing forum and is not intended to address your particular requirements.
Whilst information provided on them can help with your investment research you need to consider carefully whether you should make (or refraining from making) investment or other decisions based on what you see without doing further research on investments you are interested in.
Participating in this forum cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you.