LBL - Laserbond Limited

[finicky]

Might be setting up a workshop in the USA to be closer to potential clients there?
Claude Walker gave it a forensic write-up in his free newsletter. His concluding remarks:

"The CEO said that there were opportunities to expand both in WA and in the USA, where products customers are showing interest in the services offering.

The problem with Laserbond is that growth (except for in the technology division) is very capital intensive. However, if the technology division can book some wins in FY 2024, that should put Laserbond in a stronger position to drive growth.

Overall, I would expect a stronger H1 FY 2024, since the CEO says that “LaserBond’s demand has shown no sign of abating.” I am happy to be a shareholder and may well end up accumulating more shares on any share price weakness."

Not Held

 

[galumay]

Held or Not Held, @finicky?!

I got Claude interested in LBL, not the sort of business he is interested in usually.

 

[finicky]

@galumay, me not held, Claude W held.
It seems fairly priced to me currently?
Price reversed almost immediately after I was finding reasons why it might go lower (below 65c) back in June 2022. Maybe it was tax selling in an illiquid stock? I'm now looking at price as contracting within a 2 yr triangle roughly speaking and is at the top edge now. Which is only to say it has been 'consolidating' and is at an interesting point for a holder.

Not Held

WEEKLY

 

[galumay]

Aghh, I missed that the last para was a quote!

Its a bit rich for me to add, but also its such a big position already and the cost base is so low that its almost impossible to overcome the anchoring bias for me!

 

[galumay]

Bit to digest with LBL H1 results, disappointing earnings dip, I dont think they have provided any earnings guidance thru the half so it was a surprise. Also a partial acquisition with an unusual structure, but looks sensible at face value.

A bit to digest with this statement too, given how big an impact each of the tech licenses makes on the business.

Final comment is that FCF generation continues to be very healthy, even after all adjustments for accounting distortions I think its still about the same as EPS. Company still confident of $60m rev in 2025. Although as I have said in the past I am not a fan of revenue targets as a metric. As an investor its not what I care about, its what a business does with the revenue that matters to me.

 

[finicky]

Seems to be a buy candidate on fundamentals but still risky as a chart buy. Guessing the price decline has reflected a sustained disappointment with the H1 result announced in Feb. Revenue was up but costs also up on a few lines: cost of sales, general admin, depreciation/amortisation - resulting in a significant looking drop in NPAT margin compared to previous 4 half years.
Hope to be disciplined enough to keep a close eye on chart development as this might be another galumay special (like SXE)

Not Held

WEEKLY

 

[galumay]

Well its been special for me, @finicky! I bought at 16c a few years ago.

I think the biggest factor in the price weakness has been the announcement that they were 'stalling' the technology division to divert resources to the North American growth opportunities - the Tech division had been very much the high margin, sexy future of the business so this pivot caused some loss of confidence IMO.

I am still a high conviction hodler, there is much to like about the business, the quality of management and the obvious shareholder alignment is a strong positive. (the 5 year summary they regularly publish is an example of rare long termism) All the metrics I consider when analysing a business are positive in the case of LBL and I dont think they are expensive at the current price, I have a range of valuation around 90c.

May well present further buying opportunity when the H1 results are released if there is no flow thru yet from the recent acquisition and change of focus from Technology. Of course waiting for the H1 results may mean a missed opportunity if results are stronger than expectations! The investor's dilemma!

 

[finicky]

Put a bid in for an initial 5,000 @ 0.71 as LT buy.
Never good at waiting out an illiquid stock and this'll keep me alert to any better buying op.
Thanks for your valuation galumay, 90c seems fair to me although likely weaker FY24 it looks.

Edit: oh my gosh, it just filled

Held

 

[galumay]

Welcome aboard!

 

[finicky]

@galumay I've got the bug now. First buy since Saunders.

 

[finicky]

Woohoo, getting filled for an add of 5,000 @ 0.695
Taken two days to getting close to filled (just one (1) share traded to me yesterday)
Chart continues to be ambivalent for me. I'm making an assumption that its not far off the lower level of the range it's been in for a few years, but it's not a sound buy 'technically' as its below its falling moving averages for starters.

Held and Holding

DAILY

 

[finicky]

Breaking News: from Bloomberg:
5,000 added @ 0.69 to the finicky p/f.
Responding to requests to comment, the boutique manager declined to elaborate beyond a curt, "Dodgy chart"

Held

 

[galumay]

From one boutique mismanager to another, "Dodgy chart" will be added to my quarterly update to explain any failure of the market to agree with my laser like research & analysis.

 

[finicky]

12 months low yesterday @ 67c but recovering ground today. Put in a bid down at the final level of support @ 0.65 which I think has a chance of filling. Plan to double up in a crash, roughly speaking.

Reading the investor preso released 8 Mar inspired more enthusiasm and the investment in W.A company 'Gateway Equipment' (40% and heading for a 51% controlling stake) seems to deserve a better term than a 'bolt on', as LBL is getting a new influx of proven management and a network of new clients in W.A. Plus I imagine creative synergies. The equity portion of the investment is deemed at a share price of 85c which means they were able to pay that portion with shares at a significant premium to today's price. Then there is the low looking multiple that LBL paid, with Enterprise Value/ EBITDA = 4.5 for the cash + shares transaction, according to LBL.

Held

 

[finicky]

There's street talk that finicky boutique has raised its bid for another chunk of minnow LBL. Head of research rumoured to have remarked, "Chart bit less crappy"

DAILY

 

[galumay]

I will be scanning the LBL top 20 for FInicky Boutique MicroStonk Fund.

 

[finicky]

Bid just made and part filled for an add of 5,000 @ 0.665. It seems to be breaking the recent support but this has never been a chart buy for me. Basically it's just a stealth dribs snd drabs accumulation to a tipping point where I can strike a lightning blow and wrest a majority interest in this dynamic minnow.
I shouldn't be saying this here, but you know me, ol' blabbermouth, there are substantial holders in touch who want out. Don't take it personal galumay, it's just business.

Held

 

[galumay]

Oh I know I cant compete with the institutional investors like FBMF, (Finicky Boutique MicroStonk Fund for those who dont know.)

 

[finicky]

The mighty mouse LBL @ 0.71

Still stuck with a partially filled bid down @ 0.665
Some prick came in and gazumped me with a bid for 10,000 @ 0.67 just after I posted here (above) and still had 746 shares to fill. Pretty sure it was one of the many 'guest' visitors here who have alerts and pore over my posts for ideas. I hate unrounded holdings.

Held and
Holding

 

[galumay]

Like flies to honey.

I just put todays price action to FBMF making a more aggressive move to jump in to the top 20 list.