Northgate could be a very cheap share. On the other hand the business model which has served it well in the past may have run its course. Most of its vehicles have diesel engines. Structural changes seem to be taking place in the van leasing market. Yet it has a big market share in Spain and the north of England. It is massively exposed to residual values for ex-lease vans. However it is protected to some extent by its ownership of Van Monster which is advertising heavily on Talksport radio at the moment.
The shares are at an attractive entry point and there is decent two-way business at the moment. I can understand why people are selling but on the other hand the shares might be cheap at this level. Surely one of the big vehicle manufacturers like Fiat, Renault or Citroen might be interested given NTG's big position in the market. I've bought a few at under 410p. Maybe the business model is broken. I don't know but it might just be a good buying opportunity.
"Northgate (LSE:NTG)Few things are more frustrating than evenings, sitting in the garden surrounded by mountains, watching a bunch of sailing boats pretending to race on a flat calm sea, while sipping alcohol-free cider and realising nothing ..."
" NORTHGATE PLC (LSE:NTG)Â Few things are more frustrating than evenings, sitting in the garden surrounded by mountains, watching a bunch of sailing boats pretending to race on a flat calm sea, while sipping alcohol free cider and realising ..."
Maybe the market just feels they are a bit ahead of events generally, but there is no news out there to trigger a 5% fall, and no obvious signal. There were two RNS announcements within the last month disclosing holdings moving above 5%, so someone is confident! I am up a nice 60% since buying in last Feb so I am happy to hold and might buy more if this slips back below 500p
"Northgate has released a very brief AGM trading update this morning, confirming that the Group continues to trade in line with expectations and to make progress towards its strategic objectives. Recent periods have been characterised by robust (almost straight line) recovery in Spain offsetting a lack of momentum in the UK business. The UK branch roll out of a few years ago has stalled for now, while plans have been put in place to stimulate UK utilisation and margins under a strengthened sales team. The shares are inexpensive (9x P/E, <4x EV/EBITDA, 4% yield) but the key to a re-rating, in our view, will be delivering tangible signs that these UK initiatives are beginning to bear fruit in the second half of the year."
<b>Northgate plc 45.8% Potential Upside Indicated by Citigroup
Posted by: Katherine Hargreaves 22nd April 2016</b>
Northgate plc with EPIC/TICKER LON:NTG has had its stock rating noted as Initiates/Starts with the recommendation being set at BUY this morning by analysts at Citigroup. Northgate plc are listed in the Industrials sector within UK Main Market. Citigroup have set their target price at 600 GBX on its stock. This is indicating the analyst believes there is a potential upside of 45.8% from todays opening price of 411.6 GBX. Over the last 30 and 90 trading days the company share price has increased 10.8 points and increased 63.3 points respectively.
Northgate plc LON:NTG has a 50 day moving average of 395.66 GBX and the 200 Day Moving Average price is recorded at 429.24 GBX. The 52 week high share price is 664 GBX while the 52 week low for the stock is 316.3 GBX. There are currently 133,232,517 shares in issue with the average daily volume traded being 413,661. Market capitalisation for LON:NTG is £550,783,217 GBP.
Could it be an over reaction to the fear of diesel valuations? Talk of diesels being on their way out? However, even if that were true, it is a far off goal, and the existing diesels are the only option for people to carry out their work in the meantime, so used valuations are holding up and subject to normal cyclical movements will continue to do so.
I sold plenty when the shares had had a great run and seemed to have become expensive, however, I bought a few more myself this morning!
Investors will be relieved to learn that Northgates Spanish operation, the source of much grief in recent years, is now earning the sort of returns that will not lead to the board being put under any more pressure to sell the business.
The van hire company has benefited from the unexpectedly fast revival of the Spanish economy, with something similar happening at its operation in Ireland. This has allowed it to gain a share of the market serving SMEs, while moving away from block contracts with national companies.
The last business is less profitable, while it also means more wear and tear on vehicles, which reduces their resale value. Something similar is happening, in a more limited way, in the UK.
Spain is now generating returns on investment, the best measure of performance for such businesses, of almost 13 per cent, not much behind the UK. Figures for the year to the end of April are distorted by changes to depreciation, underlying profits up by 41 per cent to £85 million.
Northgate shares, perversely, fell by 43½p to 575p. They sell on 12 times this years earnings, which does not look expensive in the longer term given its strong market position.
My advice Buy long term
Why Multiple looks attractive given strong market position
Am I missing something, result update looks but huge drop in sp (even before results came out)?
"Northgate, the UK and Spain's leading specialist in light commercial vehicle hire, has announced that for the year ended 30 April 2015 there was an increase in underlying profit before tax to £85.0m (2014 - £60.3m).
Profit before tax rose to £83.0m (2014 - £51.2m).
There was a 45% increase in dividend per share to 14.5p (2014 - 10.0p)."
"The decision to liquidate a holding in van hire firm Northgate was particularly tortuous, pitting respect for management against an intrinsically unstable industry.This morning I liquidated Share Sleuthâs holding of 511 Northgate shares. The ..."
"Van hire company Northgate has staged a turnaround and a stable business may have emerged. Itâs valuation though, seems to belie remaining uncertainties.Iâm completely conflicted by Share Sleuth portfolio member Northgate. Under Bob Contreras the ..."
"Van hire company Northgate is recovering, but is it dependable?One factor that distinguishes a stalwart from a susceptible company is financing. Companies that depend on debt to generate adequate profitability are susceptible to recession, for ..."
IT is estimated that over 90% of AIM stocks are INFECTED by short-sellers !
Many highly popular stocks are going down even on GOOD NEWS !
# IF you were a short-seller, BLUFFING, (basically manipulating a shares' price) about a company's overvalued share price, you might not want to *draw attention to yourself since you could get accused of stock manipulation. So you would hope (OR PLAN FOR) others to get involved and to present SEEMINGLY GOOD REASONS to short the stock.
You would want to put AS MUCH FEAR INTO 'LONGS' as possible and would use high volume short trading as well as buying to drive the share price down as low as you can and as long as you can. You really want the longs to fold and to get out of the game. If you are consistently seeing sellers overwhelming buyers driving a share price down as a stock seems to be going up, I can assure you it's probably shorts' selling, since longs are totally motivated to sell their shares at the highest possible selling price. #
Found this article on the iii web page - the new format means they are more difficult to spot so I thought I'd post together with the links referred to.
Also added the HL link as this shows brokers are also positive.
Northgate have now overtaken their 2011 peak and are the highest they have been since the collapse in mid-2009. The share price still needs to go up fivefold before it gets back to the early 2009 value though.
By the end of the financial year in 2009 (30/4/09) the directors of this company had gone mad and racked up debts amounting to £12.48 per share. The current management team have stated that their strategy is to streadily reduce debt and to this end they have been very successful (4/10 £4.48, 4/11 £3.92 4/12 £2.87) with debt down to £2.67 at 31/10/12. There is no reason why this company cannot become debt free within a few years and if, and when, this happens the share price will double. I would not vote to accept a bid of £4 per share as long as the debt keeps coming down.
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