Like Games, I am a bit puzzled. The results next Thursday should be good, but that was priced in at 45, let alone 57. And the currency tailwind is now a headwind. So what is happening? Only four more days to find out.
I put it down to a thin market, a shortage of quality businesses for investment - there are more Carillions out there - and the possibility of a pleasant surprise from AM. And, after all, this is a very cyclical business selling into a global upturn. So I will continue to work hard at just standing there.
Too right, nettle! I started buying these in 2011, first entry was at 848, since when I have been in and out top slicing here and there, but holding on for now, and showing an overall gain of 'only' 275% plus dividends - not to be sneezed at, but how daft of me not simply to have held and held for the long haul!
It's unlikely to be a bid, as the old boys hold ~52% between them, so they would, effectively, have to sell their shares for any bid to succeed. Of the other 10 top investors, only Baillie Gifford, at 5.3%, has over 5%, and that hasn't changed since last June, nor has Blackrock's 3.1%.
If the price hits £65, entry to the FTSE 100 beckons (currently we're 111th, up over 60 places yoy).
I assume next week's figures will be spectacular, and could do with a bump in the divi (under 1% at current prices). If they aren't, then probably we'll go tumbling back down to under £50 or less (consensus broker forecast has a median target of £42.50).
I've been thinking about top-slicing since before £30. This time, if it does hit £60 next week, I really will take 10% off the table, lowering my average book cost from £20 to £14 (but fortunately with no CGT implications, as they're all safely tucked up in my ISA).
"I don't think RSW make anything that goes in an iphone."
True, RSW doesn't make anything that goes into anything per se.
They are a tools supplier and measurement company principally.
Even when they move into Additive Manufacturing it's most likely to be providing the kit and training the end customer..
It's interesting how RSW has managed to scale so much with that model -- they certainly could have the capability to outright manufacture things but that sets them against their customers and it's also a whole different financial ball game and infrastructure set up.
Games -- let's hope there isn't a downturn in manufacturing, or RSW will easily halve in price.
Well, they regularly get contracted by Apple to make things to put in iPhones, does that count?"
I don't think RSW make anything that goes in an iphone.
Further investigation reveals that an analyst had discovered that Japanese machine tool orders had increased some 28% where RSW probes are extensively used and a major market for their machine tools is China where factories machine the iphone8 casing.
An Apple promotional video showed an RSW probe being used when a casing was being machined so this analyst puts two and two together and makes twelve, concluding that due to upsides in the consumer electronic market that the Japanese are going to sell more machine tools to China with RSW probes that will machine Apple iphone8 casings!!
The analyst reckoned earnings increases of between 10 and 30% for RSW as a result.
Current year on year growth in that market is about 28% and based on the latest accounts, metrology sales to Asia would need to increase by a further 67% to achieve a 30% increase in RSW total revenue ie: about £160m and that's an awful lot of probes.
I concur with the first two reasons but am unable to see how they could benefit from "upsides in consumer electronics" considering they have absolutely no business in that market? -asks BertieB
Well, they regularly get contracted by Apple to make things to put in iPhones, does that count?
UBS say that SP's in RSW may have " benefited from improved general industrial demand, auto production growth and upside in consumer electronics"
I concur with the first two reasons but am unable to see how they could benefit from "upsides in consumer electronics" considering they have absolutely no business in that market?
UBS are one of many who have been predicting RSW doom and gloom for some time. It might be something to do with bankers inability to predict anything economic correctly since 2008 when they messed up big time.
RSW are overpriced and the prudent amongst us may be tempted to sell. Fundamentalists on the other hand who are invested for the longer term should continue to hold IMO.
Tom, this has been on a fantastic run for a few years, now could be the opportune time to pocket some of the profits we have enjoyed on this journey. Good luck to all who have a holding in this company, I'm sure there is more come.
This is by far my best performing share this year in a portfolio of about 13 or so. I like the company too and still think it is good value but am keeping a sharp eye out for any significant drop in the share price.
According to today's FT (page 22) UBS have downgraded RSW with a target price of £45.35, arguing that it is expensive at a 70% premium to its sector. We have had these downgrades from brokers before, but at the moment, I am comfortable with the shares, though I will look out for developments next week.
Interesting to look back to my post 06/10 when the share price had dipped to 4,670.
I said then: "IMHO this is a definite buying opportunity which LKH may regret if he ignores it.
The broker downgrade to which Blanketstacker refers was Deutsche Bank. In August they advised sell with a target of 3180 and now they have an increased target of 3630 and are still saying sell.
If this is really the reason for the sudden drop then I think investors should doubt the advice of a bank who consistently is unable to get its own affairs in order can be trusted to predict others.
This share is expensive at the moment as LKH says but it will seem cheap in a few years. Day traders can forget it but it is a share for the long term."
Well it looks like I was wrong about Day traders ignoring the stock but as I write it is 5,550 so a nice little profit of nearly 19% if you took my advice and saw the drop as a buying opportunity. Looks like Deutsche Bank advice remains suspect.
Looks like RSW was not involved as Smith & Nephew aquired a US competitor, Blue Belt Technologies, who manufacture robots.
It would seem that using robots for knee surgery has been around since 1985. I think Renishaw surgical robotics are more state of the art precision positioning of surgical tools as opposed to simply supporting a patients leg with a robot during knee surgery.
Received the dividend recently, which for me is the great joy of investing.
I suppose a secondary benefit of owning shares is watching the capital value go up. I see Johnny Renishaw limbering up to get out of the £40-£50 trench and push on to the next one. He has raised his head above the parapet a couple of times and the fire from the selling crowd appears to be pretty intense. It can only be a matter of time though before he goes for it and starts digging into his new position.
Clearly this is a great company. I like how it is run. What worries me is if the current management were to move on, would the money men take over from the engineers, leverage it up and run it into the ground? I suspect that given the chance they would do that in a heartbeat. I just have to hope that others who are holding this share will look to support a continued presence on the board of people who want to engineer things rather than balance sheets.
"Come on Richard. Renishaw's an out-and-out growth stock. You're a value investor. Why are you holding?I often ask myself the same question. Last time I thought about it, I broke out in a cold sweat and offloaded some of the shares. Now ..."
That gives a prospective P/E ratio of 34 or thereabouts, against a market average of something like 20, for what it is worth. Broker earnings estimates have been creeping up lately, though not as much as the price. As we all know, this has always been a thin market with much of the stock tightly held. As people have been pointing out, industrial metrology is starting to look a fashionable business to be in.
I had a quick look at RSW's healthcare division and it seems that their 'robot' is a very specific machine for neurosurgery applications.
Which also made me realise that the innovative new tiny robot being touted in the media last week is also very specific to one set of operations (at the moment) - using key hole surgery.
The other thing about it is that it's not actually a robot. It's a manipulator arm or waldo used by the surgeon via a video screen. Bit like a JCB minidigger but smaller, not so yellow and hopefully more accurate? OK only joking. sort of.
The next thing that occurred to me is that all these revolutionary 'robots' are going to need very accurate and reliable sensors and motion control encoders to control all those joints? Hopefully RSW is on the job and this is where the real interest might lie? If all the worlds surgeons end up with manipulator arms or replaced by robots using RSW motion control products? Interesting.
The value of my investment in this 'puppy' lol has remained the same as I have been top slicing in 50 share tranches. Now some 400 remaining having just sold 50 shares at 4,420.5. Of course it has not really been top slicing, I have been masochistically flaying my own skin.
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