valuemanbuyer
03 Aug 2016
Re: Question I don't know why you're concerned . Tracsis will grow to £10-15m profits in the next 3-5 years due to its high levels of freecashflow being reinvested in niche software solutions . As this happens the shares will rise again . I can see £10 in a few years .Why would one want to miss out on this great potential .
Muzzletoff
03 Aug 2016
Re: Question HardboyNo. I am afraid you are over estimating me 
. Just hanging on like grim death. No plans to increase or decrease at this stage, and can't think of anyway to hedge the downside. I don't however have a big holding or exposure. I have changed my criteria for investing in stocks, and truth be told probably wouldn't invest in something like Tracsis now. It's too illiquid, the price spread is too wide, the multiple is toppish (unless it keeps performing), and the dividend yield isn't wonderful.I wanted to invest in it earlier, influenced by some commentary on The Motley Fool board but wasn't set up to do so, and the talk then was of the USA possibilities.It could be a wonder stock, and there are definitely positive things to say about the management, but most of the future growth is likely to be from acquisitions, and some organic growth, unless the USA market wakes up. I do wonder if the USA prospects are gradually being buried in the Tracsis news commentary. We will see in due course?On current earnings multiples the company can't afford to disappoint, otherwise there will be a significant de-rating. But if does perform, the market is likely to reward. Some acquisitive management do build up over time a brilliant reputation for delivering.
Hardboy
03 Aug 2016
Re: Question Muzletoff, You've obviously done your sums very thoroughly and are prepared for the results - presumably with a course of action for whatever outcome we get. let's just hope they publish the results in the format you've done your analysis for. (I'm not suggesting Tracsis will do this) but it really annoys me when companies change the way they report results and the different headline numbers they lead with, so you know what you're looking for but can not find it.I suppose the key things are to decide what are the scenarios when you sell some or all or buy more.
Muzzletoff
03 Aug 2016
Question As you can see I am obsessing a bit on this issue!Most share price operate on a multiple of prospective NP profits. Stockopedia have NP of £7m for 16/17. If they achieve £6m NP for this year, it is likely the market would look to price in next years prospective NP figures. This may not happen until they get a new Investec brokers note?So a 20x multiple, assuming no changes in shares in issue, on a £7m NP would equate to about £5.9. If at 25x would equate to £7.47.So plenty to play for. Obviously if they disappoint the market, the multiple is likely to deteriorate quickly in line with sentiment.Dividend is not a big issue yet with this share
Muzzletoff
03 Aug 2016
Re: Question Thanks ValuemanA 21.4p eps does seem to indicate a £6m NP outcome. That make the current share price pan out at around at around 20.4x per share.If Tracsis does exceed that NP figure, there may be an upward push on the multiple. I think before the referendum they had as much as an 30x multiple?I doubt we are going to see that again, but this share is pretty illiquid, so may rush before the usual profit taking.A 25 multiple could take us back to £5+, which would be nice.
valuemanbuyer
03 Aug 2016
Re: Question I below were looking for 21.4p up from 18.4p a healthy increase and 35.2p next year. I guess the Investec research is the one to follow as that's their broker (and they're v well regarded ).
Muzzletoff
02 Aug 2016
Re: Question Yes. I suspect 'expectations' usually means the guidance given by their own brokers analyst's note.But nobody sees this apart from the clients of the broker, or other brokers. So for most of us, we are fishing in the dark -which is ridiculous, when the company are making public statements about it. Problem is, as I understand it, that brokers due to compliance can't release these notes to private investors, because they may constitute investment advice, for which they could be liable.Management and the broker's analyst usually sit down together to go through the business plan for the forthcoming year, and to reflect on the results just in. So basically they get a pretty good steer. A very strange process which favours a few basically!
Hardboy
02 Aug 2016
Re: Question That's reassured me a bit. They have to be in the regions of their previous guidance or they would have to have informed the market. It seems a long time since the interims back in March; and I believe that was the last material update we got,Like you I always think Comparing forthcoming performance with expectations is a cop out unless they define what expectations are. I assume it is broker's forecasts, but which brokers I don't know. And what is Net Profit? So many different profit figures. I like to stick with Operating Profit as that is usually defined in the audited accounts. But whichever profit figure it relates to £6m looks like it would be a healthy increase.
Muzzletoff
02 Aug 2016
Question When Tracsis talk about market expectations, does anyone know what they mean in terms of numbers?I use Stockopedia, and they a have a prospective PE ratio of 20x, and it appears to be based on an expectation of a net profit for 15/16 of £6m. I understand this is some kind of average of brokers notes, but I am not really sure this is what the management mean by market expectations.£6m NP is quite a leap on their historic 2015 of £3.73m, though with the acquisitions, and hopefully organic growth not impossible.They made two acquisitions and a strategic investment in 2015. That will probably add about estimated £7m turnover, and approx. £1.4m NP from the acquisitions, assuming no organic growth, which would take it to about £5.2m NP profit.I am not sure what they expect to get from their strategic investment in terms of turnover/NP?
Muzzletoff
02 Aug 2016
Re: Shares Magazine I like you am concerned. Rarely is there in life a straight upward line in business life, especially if you make acquisitions. I have seen quite a few acquirers pull up short.Markets are fairly brutal when bad news is delivered, and I am afraid this makes Directors postpone it until they have to.Lets not forget the CEO sold some shares. The positive aspect should be the development business that they bought this year, which was making nice profits privately, and was bought with an earn-out kicker, so it is in their interests to deliver. If they maintain that performance there should be a good add-on of profits in this year. Here's what Tracsis said in Dec 2015:'In the year ended 31 January 2015, Ontrac generated revenue of £7.1m, and adjusted* Profit Before Tax of £2.4m. The business is debt free, and has a history of strong organic growth coupled with excellent cash generation. Ontrac employs around 30 permanent staff, all of whom will remain with the business post transaction....As a result of this acquisition, it is expected that the Group will exceed current market forecasts for the year ending 31 July 2016.'Fingers crossed!
Hardboy
01 Aug 2016
Re: Shares Magazine Muzzletoff: "To get back on track of a Tracsis discussion, I hope they will improve so much I will positively look forward to paying the CGT on my massive profits!"Yes I apologise for taking us on a detour. Last year they released a pre close trading statement ahead of the finals on the glorious 12th of August. I imagine they will issue another one round about the same time. I confess the being a little concerned. Tracsis have usually been good at announcing major project awards and developments; and they have been very quiet of late. We've heard nothing more about the Pilot in North America. And without news the share price has slowly slid down from a high of 555 - over 20%.Aren't all investors, by definition, optimists? I too look forward to paying income tax on the huge dividend payments I will be getting from Tracsis - even after I've reduced my holdings whereon I will be paying capital gains tax.
Muzzletoff
01 Aug 2016
Re: Shares Magazine Hi HardboyFor a multinational company, or someone with significant assets tax avoidance is relatively easy, and yes I agree the temptation to move it around to low tax regimes is pretty irresistible.Personally I feel that tax is leeching from every orifice, and tax free incentives are melting away. As employers we are asked to fund automatic pension enrollment, apprenticeship levies, and an employers NI top rate of circa 13% plus Corp Tax on any profits we do make.Meanwhile, our top rate income tax rates are at 45% (plus NI) and the incentive to save for a pension are massively eroded as a result of recent Osborne initiatives. Should we pay ourselves dividends these are also being taxed more.So one feels that gradually the UK because of the general narrative on tax is gradually eroding inch by inch an entrepreneurial culture. When Owen Smith stops talking about a wealth tax, you can't help feeling there is only one direction of travel.To get back on track of a Tracsis discussion, I hope they will improve so much I will positively look forward to paying the CGT on my massive profits!
Hardboy
29 Jul 2016
Re: Shares Magazine There is a fine line between tax evasion & avoidance; but of course one is legal & one not (& I can never remember which is which) but I don't blame any one for trying to minimise their tax liabilities legally. If there are loopholes which allow them to do it in shady ways, it is not their fault for finding the route, it's the tax authorities' fault for allowing the route. Once you get into international tax it gets very difficult as each country has its own rules; and it does annoy me when the media go after individuals or companies for not paying the correct tax, when they doubtless do not understand the complex issues in play. As a shareholder of any multi-national I expect the company to do all they can to minimise tax liabilities by putting costs in the most tax efficient region. I remember someone giving me an oversimplified example of the problems with international tax - suppose Usuain Bolt runs in 10 meetings in a year, and gets paid £1m for each meeting. Say he is taxed 50% in the UK and one of those meetings is in the UK. The UK tax authorities are not content with taking 500k off him (50% of his appearance fee.) They also want a share of his endorsement money. let's say he earns £100m in endorsements a year. The UK tax authorities say - he earned his money in 10 countries, therefor we want 1/10 of his advertising income too. So for Usain Bolt coming to run in the UK & getting paid £1m, The tax authorities want £5.5m in tax off him. On one level that does not seem fair; and certainly given that example you can understand people and companies trying to get round tax. Having said all that, this does not mean I have great sympathy with Mr Trump, or that I'd be happy with him as the most powerful man in the world. Which raises an interesting question. If Hillary Clinton becomes president who will be the most powerful man in the world?
Muzzletoff
29 Jul 2016
Re: Shares Magazine Great article Hardboy!I have heard a reference to the fact if Trump had merely invested the money and assets he received from his wealthy real estate owner father, he would be richer than he claims to be.All this manouvering, and tax dodging is a function of character, rather than business dealing. He wants to rook people! God help us if he becomes president, assuming he is not impeached five minutes later.Richard Branson is another one for dodging taxes through elaborate structures. But he seems to get a free pass.
Hardboy
29 Jul 2016
Re: Shares Magazine And on the subject of magazine articles and Donald Trump's financial Affairs there's a wonderful article in this month's Vanity Fair about just that (& US Tax) and I do have a link for this: -[link] may not be regularly referred to on these discussion boards, but when they do financial articles they are well worth reading; as the articles tend to be very in depth and cover all sides of the story; unlike most financial magazine articles which have a tendency to be a bit brief, high level and tend to just give one side of the story. After reading that you wonder if he becomes president will foreign policy and trade deals be made for the good of the US or the good of DT.
