FGE - Forge Group
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haha yeah, well lets hope so anyway!
Just updated my figures in my model and I still see fge as undervalued even despite this...however, as you suggested, the important thing to consider is whether the growth is set to continue, or if its over?
$25-27m BEFORE tax = $17.5 to $19m AFTER tax. H1 NPAT $21m AFTER tax. A pretty significant half-on-half fall!
Revenue was $204m in the first half, and only $200m in the update. Corresponding figures from last year was $112m and $135m. So half-on-half top line growth was 20%, 51%, -2%...
This may be an one-off but if that's the end of their growth then the current PE of 16 (EPS = 40c) is starting to look stretched.
I am actually surprised that the share price didn't fall after the announcement
Revenue and profits may be a little lumpy due to project timing and weather, I would however like to see some new project wins in the near future.
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Interesting price action with FGE since the market update. Its hard to tell whether the price drop is inline with the current market situation or if its specific to the company. For the most part Id say its the general market sentiment...I guess those ultra conservative analyst estimates for full year earnings don't look so ultra conservative anymore.
Still, the company has a target of achieving $500m FY revenue ASAP so they are still striving for growth - as Robusta points out, this may just be a bump in the road. I guess the key will be to keep an eye on the order book.
Also we have to keep in mind that forge has a massive amount of cash sitting idle that will be put to work sooner or later, which will result in a material increase in earnings. For example...assume they are currently getting 5% interest on the money...if they can use the funds to get a return of 15%...thats an extra 10%. Considering that they have around $70m in cash (for memory from the last report) which may be larger by the next report...this would give FGE an extra $7m PBT....
FWIW contacting forge by email is extremely difficult - the email address they provide doesn't work (I get a returned to sender, failed communication attempt, every time!)..kind of annoying but I guess I wouldn't gain much extra information by contacting them anyway.
Still, the company has a target of achieving $500m FY revenue ASAP so they are still striving for growth - as Robusta points out, this may just be a bump in the road. I guess the key will be to keep an eye on the order book.
Also we have to keep in mind that forge has a massive amount of cash sitting idle that will be put to work sooner or later, which will result in a material increase in earnings. For example...assume they are currently getting 5% interest on the money...if they can use the funds to get a return of 15%...thats an extra 10%. Considering that they have around $70m in cash (for memory from the last report) which may be larger by the next report...this would give FGE an extra $7m PBT....
FWIW contacting forge by email is extremely difficult - the email address they provide doesn't work (I get a returned to sender, failed communication attempt, every time!)..kind of annoying but I guess I wouldn't gain much extra information by contacting them anyway.
skc
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Not sure all that cash is idle. Payables $57m. Tax liability $10m. Debt ~$6m. So total ~$73m. Less say 3/4 of account receivables $24m. Meaning probably only $20m or so is truely idle (conservatively).
Ive been confused by this thread and as im new to investing you will have to excuse my ignorance.
Anyway I was reading announcements and news articles last night on FGE and they revised not so long ago a higher profit than anticipated.
I dont get why the share price is so low if thats the case.
Also, does anyone have any estimates on Intrinsic Values for upcoming years?
Anyway I was reading announcements and news articles last night on FGE and they revised not so long ago a higher profit than anticipated.
I dont get why the share price is so low if thats the case.
Also, does anyone have any estimates on Intrinsic Values for upcoming years?
Sorry I dont have the link, it was just browsing. I didnt place much significance of it as it was something similar to mentioned on here.
im just trying to work out the movements.
With Matrix for example im happy with their business model and future projections that although I bought them at just under $9, when the SP went under $8 I bought more.
FGE im not too sure about.
With a 12% RR I have FGE at $7.30 although I bought the shares with my 10%RR estimations. Im not sure if its a bad habit and I should use 12 instead of 10 from now on.
I always use a 25% margin of safety minumum though.
*Edit* As I said previously, im very new to investing, so please excuse my ignorance if anything comes across as silly or stupid.
im just trying to work out the movements.
With Matrix for example im happy with their business model and future projections that although I bought them at just under $9, when the SP went under $8 I bought more.
FGE im not too sure about.
With a 12% RR I have FGE at $7.30 although I bought the shares with my 10%RR estimations. Im not sure if its a bad habit and I should use 12 instead of 10 from now on.
I always use a 25% margin of safety minumum though.
*Edit* As I said previously, im very new to investing, so please excuse my ignorance if anything comes across as silly or stupid.
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made a limit order for $5.80 now we play the waiting game
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made a limit order for $5.80 now we play the waiting game
I think they are still good value in a market where there are not many companies trading at a discount to their intrinsic value.
My IV is 7.55 using a RR of 13percent. I have earnings per share at 45.6 as per Commsec.
Looks like RiskChasers order would have got filled, what are other doing with FGE at the moment. Everyone's IV's seem to be in the realm of at least $7+ which leads anyone and everyone to believe their is money to be made on FGE.
Are people buying at the moment? I can't see there is any major reason for concern besides the lack of updates regarding major contracts but as long as they are still operational and meeting their profit guidance they must have a reasonable amount of work on.
Any continued weakness towards the $5.00 mark really become apitising. I'm looking to round up some funds a get in shortly if it hovers around here for a little bit.
Question: Could the weakness be due to people booking major profits before EOFY as anyone that's followed Roger Mongomery would have large gains to date and may be taking profits?
Thoughts?
Are people buying at the moment? I can't see there is any major reason for concern besides the lack of updates regarding major contracts but as long as they are still operational and meeting their profit guidance they must have a reasonable amount of work on.
Any continued weakness towards the $5.00 mark really become apitising. I'm looking to round up some funds a get in shortly if it hovers around here for a little bit.
Question: Could the weakness be due to people booking major profits before EOFY as anyone that's followed Roger Mongomery would have large gains to date and may be taking profits?
Thoughts?
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The further it goes down the more attractive it looks.
It is now trading around 30 percent discount to its IV i think. I will definitely buy more but will wait til the downward trend stops. If it hits 5 dollars then it is a very good buy i reckon.
Who knows the reason why it is going down? End of financial year. Market jitters etc
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I sold 80% of my FGE at $6.28 after their latest update.
My initial buy in was at $2.50, so it felt good to lock in a very nice gain.
Since then I probed the company for insight into current operations...I was told that they are still winning contracts...just no major ones worth announcing for a little while. they said that while competition has increased, so to has the amount of work going around. They also mentioned that they still have quite alot of work in the backlog so they have no worries about running out of work...
I think they have received a few calls from investors as it sounded like I was not the first to make such queries
I have since re-allocated my capital back into FGE (and gained ~$0.80+ per share in the process)
My initial buy in was at $2.50, so it felt good to lock in a very nice gain.
Since then I probed the company for insight into current operations...I was told that they are still winning contracts...just no major ones worth announcing for a little while. they said that while competition has increased, so to has the amount of work going around. They also mentioned that they still have quite alot of work in the backlog so they have no worries about running out of work...
I think they have received a few calls from investors as it sounded like I was not the first to make such queries
I have since re-allocated my capital back into FGE (and gained ~$0.80+ per share in the process
)Nice work with getting real value out of FGE.
I cant see that too many fundamentals have changed altho IV would have decreased a little.
Im just hopeful in the new financial year that FGE trades around its value.
FGE hasnt been the only company of late falling.
I snapped up some CCV this morning.
I cant see that too many fundamentals have changed altho IV would have decreased a little.
Im just hopeful in the new financial year that FGE trades around its value.
FGE hasnt been the only company of late falling.
I snapped up some CCV this morning.
skc
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Do you mind disclosing the discount rate and EPS growth rate you use for coming up with a IV of $7+. I think the market is doubting the EPS growth rate. A small change there will create a lot of gyration in the share price.
With announced profit guidance coming in at 40c EPS, current price of $5.3 isn't expensive compared to its peers but isn't a screaming bargain either. Although FGE does have a history of beating its own forecast...
skc
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Sry took the wrong shares on issue number. You are quite right EPS ~45-48c. PE~11-12 which makes it on the cheap side now.
$4.8-5 is good technical support level. Might swing a trade if it gets there...
Looks like its now swinging back up.
Im new to investing but im thinking of dabbling in some swing trading to make a few hundred bucks here and there with the swings of the market.
ie it was at 5.16 not long ago and sell say when it gets above 5.50.
Then the question is what if it kept going down, and to be honest because its below IV it doesnt faze me as i'd have been happy to buy anyway.
Im new to investing but im thinking of dabbling in some swing trading to make a few hundred bucks here and there with the swings of the market.
ie it was at 5.16 not long ago and sell say when it gets above 5.50.
Then the question is what if it kept going down, and to be honest because its below IV it doesnt faze me as i'd have been happy to buy anyway.
