SNL - Supply Network Ltd

[drillfix]

Started this thread at 42cps and with yield of 7.15%

Think this result will get it pretty close to that 90cps I was calling for it 6 months ago.

Well done there Liz,

Not really a very liquid share but I think if anybody who bought in below 50c then who cares right~!

Good call and what a very different stock this is to the rest. You have an eye for these sort of stocks Liz, good stuff

[drworm]

Thanks for the heads up Liz. I went through the numbers after the upgrade and liked what I saw. Got in yesterday at around 85c.

[Lizard]

Hit the 90cps. I'm holding out for $1.20+ at some stage, but may have trouble getting there. Should be safe enough for the next 6 months and pick up the divs anyway. After that, should get some more indications on future growth strategy.

Well bid and hitting new highs - last sale $1.03, bid at $1.10. Good sign going into FY - maybe market expecting another strong result and div. SNL has tended to issue forecasts around the turn of the month going into results, so possibly market is also getting set for that.

[Lizard]

Sure enough, forecast came out today and is strong (above my expectations). Revenue was on track at +20% on pcp (similar to at HY). However, EBIT comes in at $6m for the year - so at $1.10, it is still on a reasonable EV/EBIT ratio of 5.6, assuming no change in cash/debt position from HY. FY dividend increases by 1cps to 4.0cps, taking total annual div to 7.0cps or 6.4% yield plus franking. NPAT of $4.0m puts it on a PE of 8.2. My target price becomes $1.35 - $1.40 over next 4 months, so still something in it.

[steve fleming]

Sure enough, forecast came out today and is strong (above my expectations). Revenue was on track at +20% on pcp (similar to at HY). However, EBIT comes in at $6m for the year - so at $1.10, it is still on a reasonable EV/EBIT ratio of 5.6, assuming no change in cash/debt position from HY. FY dividend increases by 1cps to 4.0cps, taking total annual div to 7.0cps or 6.4% yield plus franking. NPAT of $4.0m puts it on a PE of 8.2. My target price becomes $1.35 - $1.40 over next 4 months, so still something in it.

Nice work Liz, i have to admit I was dubious as to where its top-line growth was going to come from - but looks like I was wrong with those concerns.

You are in good company with your analysis / targets - see the latest Boat Fund post on FB:

"

EPS since 2007 have gone from 1.5c and this year are forecast to come in at almost 12c (up 40% from 2011) with a 7c ff dividend. Revenue is up 20% with ROE of 30% and negligible debt. SNL is probably worth around $1.35, so there's probably a bit more left in this one."

[drworm]

Again thanks for bringing this one to my attention - enjoying the ride.

Exceptional result. Not only is NPAT up 60% yoy, but the second half increased 25% over the first half. Definitely still on the up.

[Lizard]

Nice work Liz, i have to admit I was dubious as to where its top-line growth was going to come from - but looks like I was wrong with those concerns.

You are in good company with your analysis / targets - see the latest Boat Fund post on FB:

"

EPS since 2007 have gone from 1.5c and this year are forecast to come in at almost 12c (up 40% from 2011) with a 7c ff dividend. Revenue is up 20% with ROE of 30% and negligible debt. SNL is probably worth around $1.35, so there's probably a bit more left in this one."

Oh dear, that Boat Fund is everywhere... if all the quiet corners get invaded, will we have too much efficiency in the small caps and lose our edge?

[Lizard]

Result now out and a bit more insight into outlook.

Forecasting flat EBIT for 2013 as they invest in a new "3 year plan". Now targeting 10%pa revenue growth and EBIT margin of 10% by year 3. On that basis, they would make about $5.6m NPAT in 3 years time and probably trade at around $1.70 - $1.80.

However, could be a slow wait over 3 years, even with the nice 5.5% div - around a 16%pa return all up from current $1.26... may be time to reduce and put money to other uses for a while.

[Huang Chung]

Slowly moving up.

Now that the bottleneck at $1.32 appears to have cleared, there could be more upside to come.

I really like this low profile, boring, company. :-)

[Huang Chung]

Moved swiftly from the one-thirties to the one-sixties, but has recently been consolidating in a sideways move.

Now looks set to break out after that period of consolidation. Very reminiscent of the breakout from the one-thirties.

Still holding, and recently been accumulating more in preparation for an upward break.