oilovlam
02 Feb 2017
Good value?? I don't know much about this company but they appear to be good value at the moment.The SP hasn't been this low since 2009(?). When they have had weakness before the SP recovered over a period of about 18 months to exceed £5.The company by all accounts have good management that run a tight ship (is that a pun?). The Baltic Dry Index ( I don't know what the index means...salted cod??) is high at the moment and that should(??) mean that Braemar's core business is doing good business (guessing here a little). There is some link between BDI and Braemar but I don't really know what it is.Finally, they have identified the weakness in the business and have taken action to fix it....with £6m annual cost savings.Plus they pay a reasonable dividend...when before it was amazing...and unsustainable...perhaps.
old_punter
01 Feb 2017
Re: Trading Update My previous post said wrongly the second broker was now saying hold, sorry I was looking at the wrong column, in fact they upgraded from hold to buy with a price target of 330p so the two brokers who have come out with their view on this stock post the trading update are saying buy, and the price is now 260p.
Bill1703
29 Jan 2017
Re: Trading Update Oilovlam - yes, clear as mud really, so an educated guess is the best we can muster. But any dividend is always a choice, not an economic nor accounting inevitability... They will have chosen this optically random 5p final for a reason. Whether it's a good reason is harder to say...FWIW - my take is, 14p for this FY and they expect us to view it as a minimum for the subsequent FY... Might even be able to grow it a bit, all being well and with a little help from the external market conditions. And much the same going forward... Steady, probably smallish annual increases, all being well etc... I doubt we will see 26p again for a long time - if ever? Please see my previous posts on here - they've probably needed a dividend reset for a while, though the balance sheet and (historic) FCF generation have kept it going on a just-about-justified basis.It's a good business, well managed and financed, a long term leader in its field - but always at the mercy of volatile and cyclical external market forces. Earnings may well bounce back sharply on a 2-3yr view - my guess is they will - but also quite likely they'll be back in the soup again at some point over the next 5-10yrs...
old_punter
29 Jan 2017
Re: Trading Update Agree with posts this week end, this is a decent but cyclical business and will recover, and the dividend should not be less than 14p so some support with a 5%plus yield, and will rise when profits do. Just to add that the second broker who had BMS under review following the trading update has come out with an "upgrade" to a Hold rating with a price target of 330p, so we have one saying Buy and the other looks to be saying a strong Hold.Having missed the bottom, I bought half a unit at 240p and am inclined to add if they come a bit cheaper, but they may not of course.
oilovlam
29 Jan 2017
Re: Trading Update Bill, I think you are correct, such statements are confusing. It depends what they mean by 'year'....I suspect they mean financial year. The guidance I think is for next payment to drop from 17p to 5p, combined with the last payment of 9p that gives the 14p for 'the year'. What happens after that depends on how the business performs. If profits return - helped by the £6m cost savings - then the dividend could well head towards 26p for next year. But I think they are sensible to pay the dividend in line with profit levels....no matter how painful for shareholders....they can then concentrate on improving the business without having to go cap in hand to the bank.I guess the gamble is whether they can turn the business around. It sounds like the technical division has been a drain on resources, so the 'cost savings' may have fallen heavily there. So it is probably back to basics for them.PS I don't know enough about the company but people here have said that it is well run and that is usually half the battle.
Bill1703
29 Jan 2017
Re: Trading Update Oilovlam - my reading of the statement is that the 14p is where they are guiding - at least broadly. They will know that people will be looking for such guidance - at least, they should have been advised of such. But they have stopped short of committing to it - probably wisely, given the low visibility, both near term and further out. Of course - I could be wrong on this! If so, they need better advisers - some evidence of this anyway - and they risk alienating current and potential shareholders, for whom such poor communication is often a crime never to be forgiven, at a time when they need them most.14p this year, and I guess they are hoping that recovering earnings might afford a tad more the year after. First rule of Dividend Cut Club - never cut to a level you can't be pretty sure of growing from in short order!But I am with you on the cost saves... Currently unclear how much it'll translate to higher profits all-else-equal going forward!
oilovlam
28 Jan 2017
Re: Trading Update Bill, I think the 14p dividend was for this financial year....I don't think it was guidance going forward.The final dividend fell from 17p to 5p which is quite a drop....to be expected I suppose. It seems they set the dividend level dependent on their earnings....which sounds sensible. If things improve then this presumably would be reflected in the dividend.There was a mention of annualised cost savings in excess of £6m next financial year....but I don't know if that equates to profit. Could just as likely be moth balling parts of the business with an associated drop in revenue.I guess they are going back to basics and concentrating on what they are good at....always a sensible thing to do.
Bill1703
28 Jan 2017
Re: Trading Update Disappointing to get another warning and leg-down, but not hugely surprising ... Even less surprising to see the dividend go, as per my previous posts on here. Has always been a volatile and cyclical business, and no reason to suppose it won't swing back strongly in time. They retain strong market positions, a good balance sheet and good underlying cash generation. FWIW I think they are guiding to a FY divi of 14p going forward - but not entirely clear!I am happy holding down here, though not rushing to buy more for now. Hard to argue it's too cheap in very near term - but you could well see very good returns from this level on a 12-36month horizon.
old_punter
24 Jan 2017
Re: Trading Update oilovlam/GreyInvestor,If BMS can return to say £10m ptp, and I was adding the £6M cost savings to the £3.5m ptp this year which seems reasonable to me, then the dividend could be 14p going forward. But this is very back of the envelope stuff. Hargreaves Lansdown have two broker views on this not very well covered stock on their website, one has placed its Hold rating under review following the trading update, the other says Buy. Maybe I am influenced by remembering I did nicely out of buying at around this level back in 2007 I think it was, but at 250p I have not bought back in and am sitting on the sidelines.
oilovlam
23 Jan 2017
Re: Trading Update "......There is also a decent yield on this even on a reduced dividend while one waits for the upturn....."Old_P, what is the forecast dividend now? The final (?) dividend has been cut from 17p to 4p. If the interim of 9p is cut by the same amount then the yield wouldn't be that good.Total dividend for the year of about 6 or 7 pence, giving a yield of 2.8% (assuming SP of 250p).2.8% isn't too bad I suppose....but hopefully they won't have to cut the interim dividend at all...then the yield would be circa 5.2% (assuming SP of 250p again).
Greyinvestor
23 Jan 2017
Sold out I've sold out today, for a hefty loss.I'm pretty angry with the management, who's forecasting has been woeful. I would not regard costs saved as being in any way commensurate with future profits made. The way I look at this is that it's a serious example of diworsification. The core business is fine, the rest is a millstone.Hopefully a smaller and better company will emerge.In three months the picture has deteriorated hugely, despite the Baltci Dry Index shooting up. It's not good at all.
TX2
23 Jan 2017
Re: Trading Update I wish you well & (in my interest!) hope you are correct....
old_punter
23 Jan 2017
Re: Trading Update TX2Fair enough, I think we both agree its not a sell at 250p. As you say, its businesses face headwinds but equally they can be tailwinds at other times. Difficult to read but as a contrarian I think one should be buying a stock like this when trading is tough, like now, and sell when the going is looking good. There is also a decent yield on this even on a reduced dividend while one waits for the upturn. I intend to buy if they slip back say 10%.
TX2
23 Jan 2017
Re: Trading Update I would not buy,add,or average down,the latter I find an odd concept, until there is greater clarity of how things will progress in the future.At the moment I am afraid it is fully valued and still has considerable "hope" built into its price.Hopefully it is justified based on previous performance but Braemars businesses for the most part are facing considerable headwinds.I retain a modest holding,not made a good choice here.I would sell if it was held outside an ISA but cannot use tax losses.Thankfully most of my other holdings are doing much better.We all make mistakes alas...... With hindsight I think I was too influenced by the divi and failed to take into account the difficult & changeable market the company operates in.
old_punter
23 Jan 2017
Trading Update Looks to me like a hold at 245p, perhaps even a buy IMO not a sell, and a definite buy if they drift back to 220-230p, cross I missed that a bit earlier this morning, still eating my toast. Guessing but maybe they could make c£10m pre tax in 2017 if one adds the £6m operating savings to the £3-3.5m profit this year and at least maintain the 13p dividend. So a fully taxed p/e of say 10 and yield of 5.3%. Balance sheet is strong though there might be a write down of intangibles reducing NAV, not been this sort of price since 2007 I think.So maybe those who bought in the last six months should be thinking about averaging, if I had I would, what do they think?
