RSVP If you know a better stock on the LSE vis-a-vis Risk/Reward
This appeared on News Bites newswire a short while ago (note the forward year P/E of 9.6*...... is that expensive for a high quality growth stock?):
Delcam PLC (DLC.L), the 15th largest software & programming company by market capitalisation in the United Kingdom, surged GBX95.0 (or 8.4%) to close at GBX1,232.50. Compared with the FTSE 100 Index, which rose 44.8 points (or 0.7%) on the day, this was a relative price change of 7.6%. The volume was 2.3 times the average trading of 3,731 shares.
RELATIVE VALUATION INDICATORS [RVI] FUNDAMENTALS
Bullish Signals:
Valuation
- Price/Sales of 2.3 versus sector average of 2.4 and market average of 0.7. We estimate the shares are trading at a current year Price/Sales of 2 and a forward year Price/Sales of 1.7.
- The company is cash rich with Cash to Market Capitalisation at 10.5%
Performance
- Return on Equity of 20.1% versus sector average of 8.3% and market average of 11.5%.
- Year-on-Year Earnings growth of 25.8% versus sector average of -25.0% and market average of 15.0%.
- Return on Assets of 10.1% versus sector average of 4.7% and market average of 1.4%.
- Return on Capital Employed of 20.4% versus sector average of 11.0% and market average of 15.5%.
- Interest cover defined by EBIT/I is 56.7 times. This indicates it is less leveraged.
Bearish Signals:
Valuation
- Price/Earnings of 31.4 versus sector average of 23.5 and market average of 10.0. We estimate the shares are trading at a current year P/E of 17.3 and a forward year P/E of 9.6.
- Dividend Yield of 0.2% (based on trailing 12 months dividends of GBX2.50) versus sector average of 2.1% and market average of 2.1%.
- Tobin"s Q Ratio, defined as MCap divided by Total Assets, is 3.2. Compared with the rest of the market the stock is overvalued and ranks in the bottom 10% of stocks by value of Q Ratio.
DYOR
* I'm not sure how they reach that figure but i reckon it is more accurate than the x18 showing at the bottom of this page. It is on my to do list to find out how 9.6 is extrapolated - hope to revert soon.
Filed Under: Technology,
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Delcam Plc is engaged in the supply of computer-aided design /computer-aided manufacturing (CAD/CAM) systems and services for the design of products with complex shapes and their manufacture with tooling. The Company operates in four segments: software, maintenance, services and other. The Company operates in Europe, Americas and Asia. The Company's range of design, manufacturing and inspection software provides automated CADCAM solutions. The Company is offering its software either as a complete solution, including customization to meet specific requirements with templates, macros and Visual Basic programming. Its software includes PowerMill, PowerSHAPE, PowerINSPECT, AriCAM, Exchange, PS-TEAM, FeatureCAM and PartMaker. During the year ended December 31, 2011, the Company acquired a minority stake in a Fabbify Software GmbH, which develops software for additive manufacturing. more »
