After a year of stumbling around and ranging HAMP has finally broke out (see a chart)...and looks set for a run up this year...

Brokers buy notes (see yahoo), good contact wins...all looking positive on charts...cant see it failing really..

any thoughts?

note this 'The company has also strengthened its balance sheet after February's share issue raised 55.5 million net. Besides this likely reducing a 7.5 million net interest charge, this provides flexibility to take advantage of acquisitions in what should be a buyer's market. At end-March the group had nearly 17 million cash at bank.'

imo this is a buy for the bounce - i believe from rns today still expect to make a 6m profit first half - check yourselves & background:

Hampson currently trades around a long-term low partly because an extra 119 million shares in issue - taking the total to 278 million - has meant dilution. Even so, if forecasts are credible then the forward price-earnings multiple is just eight times, well down historically. There is also a prospective yield of about 2.5%, unexciting in itself but does underline cash generation which is relevant to the shares' overall rating. With the 9 June prelims, Arbuthnot Securities projected pre-tax profit of 250 million for the financial year to end-March 2011, implying earnings per share of 6.6p and a dividend of 1.4p. For the 2011/12 year, the scenario improves to 320 million profit, EPS of 8.1p and a dividend of 1.7p.


As company broker, Arbuthnot ought to have run these numbers past Hampson's directors, and they are entertained despite a twist in the outlook statement which is the likely source of stockmarket fretting. Both the order book and quotation pipeline have increased since the March year-end although the rate of recovery during the first two months of the current financial year has been slower than anticipated. "For this reason it is appropriate to continue to remain cautious about our expectation for 2010/11 and in particular our results for the six months to September 2010..."


A P/E multiple of eight involves effectively flat profit for the 2010/11 after Hampson achieved 24.9 million normalised pre-tax profit in 2009/10, a 37% fall on 2008/09. The earnings per share scenario is materially lower due to dilution after normalised EPS also fell by 43% to 10.6p in the last year.


On a long-term view however, Hampson's derisory earnings rating looks classic prejudice of the kind Benjamin Graham emphasised when seeking genuine investment value: companies that are well-established with demonstrated earnings records, their shares simply lacking short-term growth appeal.


The chairman concluded: "Over the medium to longer term the board believes that with the combined strength of our business portfolio... Hampson is well positioned to return to sustainable growth." This is the crux of the investment rationale and to a large extent it is dictated by confidence returning in the aerospace industry. Large new composite airframe programmes became delayed by the financial crisis and possibly the effect of the Icelandic volcano added to uncertainty.


UK revenue halved in the last financial year to 33.8 million with the US down less so, by about 28% to 123 million - the US also being the principal area where Hampson's assets are located. Hence the trend in the US dollar is influential although the group's overall currency exposure helps diversify currency risks while sterling is weak. Europe has contributed the remaining 17.4 million of group revenue; while first tooling orders in India and China are starting to benefit the group, this is early stage. So the main 'top down' factor for Hampson is steady economic recovery in the Western developed world benefiting the aerospace industry cycle; with fears of a 'double-dip' recession partly behind recent share price weakness.


As with other firms that streamlined operations and cut costs in response to the 2008 crisis, the 'bottom-up' rationale involves Hampson being well positioned to capitalise on better revenues - with the downside limited if they don't appear. A 3.7 million rationalisation charge was taken in the last accounts and management says all of its businesses now have lower costs and better efficiency. Two of seven US businesses received Boeing Gold and Silver Excellence awards last year.


The market for commercial aircraft made from large carbon structures is independently forecast to grow at a compound annual average growth rate of 11%. Tooling growth is spread across many aircraft programmes, and demand for components is indicated as firm. All this is quite complex to boil down to overall trends and figures, but at least the shares currently price in a factor of caution.


The company has also strengthened its balance sheet after February's share issue raised 55.5 million net. Besides this likely reducing a 7.5 million net interest charge, this provides flexibility to take advantage of acquisitions in what should be a buyer's market. At end-March the group had nearly 17 million cash at bank.


Of the 63.1 million reduction in net debt, it is notable that 13.8 million of this represented 'free' cash generation (9.4 million investment needs), a healthy sign, also because debt should continue to fall. You would think the market might acknowledge this better, but it appears to be focusing on caution about the first-half results.


The balance sheet remains goodwill loaded with 283.1 million goodwill and 22.4 million intangibles relative to 283.3 million net assets, so although net asset value per share works out at just over a pound, some investors may wonder at asset backing. In a break-up situation however, Hampson's sum of parts would likely fetch significantly in excess of the group's current market value just over 150 million.


In conclusion, it looks fair to target at least 75p a share on a one- to two-year view, representing about 50% upside inclusive of say 5% total dividends; meanwhile, the current price factors in most downside risks. So overall, Hampson's risk/reward profile is attractive for patient investors.

Worth 5p imo.

mitzy saw your post cnt - thanks i always take posts on board - i think this may bounce to 23 / 25p by cob tomorrow - they will report around a 6m first half profit according to rns i believe - but peeps must check the rns for themselves dont want to be sued as a ramper following ntog & hawk situation - i have had a punt here - will see how it goes - if i am wrong my profit from cnt down the drain - cheers

this is interesting - director buys so they must believe in hamp if so:

'The price had fallen from about 200p in 2006-08 and even 90p early this year, re-visiting the 50p level at which Hampson issued shares in February when four directors increased their shareholdings, buying 146,007 in total.'

i like director buying shows confidence imo - no one likes to chuck money away

Good luck gibby with your bet.

thanks mitzy and good luck with any you do which ever company - all here for same purpose
cheers

.

40p fine with me!! tomorrow would be good - lol

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For any who cares to read the report propperly. >>>>>>>>>>>>>>>>

I am not saying is cheap or expensive as I have not done a research yet, but ........
Trading profit is not Pretax profit as seen below, I can tell you that it will be loss at Interim stage as Pretax Profit, as the disposal will take a 9M loss and the rest to be included also not enough, with thw 6M trading profit . ( The disposal will give rise to an exceptional loss of approximately GBP9 million. )


On today's news......
However, in light of the slower than anticipated start to the year, the Board
now expects first half trading profit* to be approximately GBP6 million and
therefore also expects profit before taxation for the year as a whole to fall
materially below current market estimates.


*Trading Profit is defined as operating profit before restructuring and
rationalisation charges, impairment charges, gains and losses on disposal or
closure of businesses, amortisation of intangible assets arising on acquisition,
changes in the net fair value of financial instruments and the results of
discontinued operations.

master RSI - good stuff but imo this is still way over cooked and i would not want to be out of hamp over night - i was hoping for a bounce today but sometimes as you will be aware may need a day or two to settle - the 6M pretax profit is only for H1, i believe the pretax profit for the whole year forecast has been reduced from 25M to 15M - there is no way the SP reflects this - imo at least 30p fair value - additionally hamp will / should have some tax reductions due to the restructuring / write down costs - gl
hamp imo way safer than cnt & rok - they are also breaking into the chinese & indian markets - H2 should be good imo

after hours buys today - prepare for a blue start tomorrow morn. imo:

12-Aug-10 16:37:56 20.00 50,290 Buy* 21.2520.00 10.06kTrade Type:

12-Aug-10 16:36:46 20.00 200,000 Buy* 21.2520.00 40.00kTrade Type:

12-Aug-10 16:36:24 20.00 200,000 Buy* 21.2520.00 40.00kTrade Type:

12-Aug-10 16:35:31 20.00 223,872 Buy* 21.2520.00 44.77kTrade Type:

12-Aug-10 16:35:12 20.00 590,452 Buy* 21.2520.00 118.09k

gibby

Take it eassy as you look over excited

the closing spread price was 20.75 / 21p, so all those trades that you say after hours at 20p can not be BUYS,
do you follow me?

Never take notice of what they say or where they put the trade on the trades volume.

Anyway, those trades are most likely delayed trades from earlier on.

      

I will be watching and checking some figures.

1 - negative part, maybe one reason for the drop - 17 million increase in debt

(Net debt at 31 July was approximately 99 million, an increase of approximately 17 million since the previous year end. The increase reflected usual seasonal phasing of working capital and was after funding net capital expenditure of approximately 3 million and the settlement cost of hedging instruments of 4.5 million.) In light of the revised expectations for the year to March 2011, the Board expects net debt at the year end to be approximately the same level as at March 2010

AN here some charts

Intraday

3 month Bollinger Bands,RSI, S Stochastic and 50 days MA

Charts - 2 days

master RSI - funny cartoons!! and thanks for the charts - i had taken a break from shares for a few weeks as hols but back now - its amazing how quickly you (I) can forget things - you are right they may have been delayed trades and trust me i do not always believe what they say a trade is - i know that buys are many many times flagged as sells - mms favourite imo is when someone buys at below the mid price - suddenly this becomes a sell etc etc completely distorting what it really is which can put people into a panic and sell and other such methods - you are obviously very experienced and have very good knowledge - it is good to read your posts - keep reminding me - i will be back up to speed very soon - i still hope/expect a blue day tomorrow for hamp - need to do more research now! - cheers

Another negative thing is the market does not like large debt 99M though able to move lower by the year end to 83M again, nevertheless is still much higher than the company valuation (market cap) 58.3M at 21p.

Arbuthnot forecast - 12/8/10:

2011
T/O - 179.5m
EBIT - 21.3m
PBT - 15m
EPS - 3.9p
Net Debt - 83m

2012
T/O - 203m
EBIT - 30m
PBT - 24m
EPS - 6.4p
Net Debt - 81m

masterRSI - thanks good info - i sold this morning @ 22.5, nearly 10% profit - not huge but profit is profit - if hamp drops further i will be back in - i was in and out of kdd several times past year or so - just bought back in again to kdd as i believe after a long wait t/o getting close at long last maybe towards end of this month or september, already a share offer at 33% premium to kdd's earlier price this year of i think 12.5p from firestone on the table - this ammounts to arond 16.625p - others in the mix - so maybe more - currently can buy kdd for < 11p - worth a tickle imo and not too long, firestone have set out a schedule for t/o to be completed by 30th september i believe

Good for you "gibby "

I have been checking things this morning, and one was how the order book was looking at the time the price was improving to 21.25 / 21.75p, but the DEPTH on the order book was very negative of 451K v 700K.

Since the share price is weakening again, now 20.75 / 21.25p