Read Stockdale Securities's note on NORTHBRIDGE INDUSTRIAL, out this morning, by visiting https://www.research-tree.com/companies/uk/industrials_-_specialty_%26_parts/northbridge_industrial_servi
"Northbridges performance for 2015 was in line with our expectations as continued revenue declines, particularly in higher margin rental business, were countered by deep cost cutting. We expect this trend to continue in 2016 - 17 and have cut our sales and profit estimates. However, we believe Northbridge has strong market positions and the cost cutting should mean that, when demand does revive, earnings will rebound significantly. We have cut our "
I know a strong buy flag on a stock in this position Is highly likely to end up with the poster looking like an utter t I t as the stock price dives off into oblivion...... but here goes.
I honestly think the fears are over done. I know this contradicts my last post and I can not be bothered to post long reasons why I changed my mind but, looking at the balance sheet, the debt seems manageable in the context of this companies assets and cash generation.
Moreover, on the whole banks genuinely are being supportive so, given that trading actually is not as horrific as the results make it seem, I would expect the covenant test not to be a big issue.
The successful outcome of which might generate some interest.
Like CT, I took up a small holding this morning. Let's see how it pans out.
Well, I agree if they make £2m to £3m a year £14m is probably too low.
But right now they are heavily loss making, have been quite slow in recognising the changing business environment and seem heavily exposed to precisely the sort of major oil companies that are cutting back...... when actually a lot of producers worldwide are ramping up to maintain market share.
Capex slashed. Can the business even operate without it? We do not have any good data to guide us there.
So, it could be just the oil price causing temporary problems but it could also be management competence and a defunct business model. Maybe it will all become clearer at the next results?
Oh I see what you mean Biscuit. Yes I agree, although I think it is also true thing can change very quickly - just because the directors see no change in operational performance does not mean the market is not pricing in something they have not even thought of.
The philosophy behind these announcements is bogus anyway because it assumes markets are efficient (and the financial crash taught us they are anything but) and that last week's share price was a rational conclusion based on unemotionally looking at all available evidence.
I do not believe that is true for a second, so there is no reason why 80p - or 20p for that matter - does not more rationally express the true state of this business.
Sure they can - but the point is not about how they manage the business but how they guide the market - and in that sense they cannot be trusted - so why should we believe there is no reason for the fall just because they say so.
Also not clear the management are to be trusted. When oil prices fell and the share price dropped they announced business was on track (which it was for that financial year) and the business was robust. They announced the full year results on track and then slashed their projections.
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