Liking the look of the SHI chart. Already broken horizontal support and could go for a break through of the ceiling of the upward trend channel.

Roofing and insulation materials market recovering. Beneficiary of housing market boom.

Long on SHI from the open, Technicaly well sold off over the last few weeks. Solid trading from the company.

There is hope at the end of the channel for "Freda" on this one ( if he bought @ around 100p a few years back ) after a new CEO today ........

SIG shares offer 'considerable upside' - By Graeme Evans | Tue, 14th March 2017 - 12:30

SIG shares offer 'considerable upside' - SHI 114.90p +7.70p (7.18%)
"Never forget your customer" is the kind of business mantra that belongs on page one of the management handbook. And yet somehow SIG (SHI) failed to heed this message after it became too distracted by its own internal restructuring.

The resulting loss of customer focus and weaker trading performance ultimately cost the job of chief executive Stuart Mitchell, and today resulted in underlying profits dropping by 12.5% to £88.6 million in 2016.

The European building products firm has already acknowledged its mistakes and has slowed or stopped a number of internal initiatives so it can refocus on customers and achieve the sales growth needed to boost cash generation.

And with today's appointment of a new chief executive in Meinie Oldersma, who has 30 years of distribution experience, the company gave shareholders a further reason to believe that SIG remains a good business with strong market positions.

This was reflected in the share price, which jumped 11% today, further justifying our positive take on the shares in January, and putting it back where it was before a November profits warning highlighted problems.

Sentiment was helped by house broker Panmure Gordon's view that the current valuation for SIG, with a forward price/earnings (PE) ratio of 10.6, provides "considerable upside".

Panmure analyst Adrian Kearsey has a 'buy' rating on the stock and a price target of 135p. He said the reinvigorated sales push will take time to deliver, but that the early signs were encouraging after SIG said its UK insulation arm had been delivering positive like-for-like sales growth since November.



He said SIG's market leading positions meant the company was well placed, with the recent difficulties more likely to reflect problems with execution rather than strategy. Kearsey is also encouraged that SIG has recognised that its balance sheet was becoming too stretched.

With net debt of £260 million, SIG said a key short-term priority was to reduce leverage of 2.1 times underlying earnings. As a result, it will target further asset disposals and moderate capital expenditure.

It has also rebased the final dividend to 1.83p a share, in line with its dividend policy of 2–3 times earnings cover. Together with the interim dividend of 1.83p, this provides a total dividend of 3.66p, down from 4.60p a year earlier.

SIG's medium-term target is to return leverage to within the 1-1.5 times range, although it admits this may take until 2018 to achieve.

In doing this, it believes its balance sheet will be able to withstand any near-term fluctuations in market demand. At present, SIG said trading has been in line with expectations, although its markets remain competitive and it has been experiencing some supplier price inflation.

It added: "For 2017 SIG continues to expect the new build residential market to be the best performing sector in the UK construction market, with the commercial sector more uncertain.

"In mainland Europe economic indicators have strengthened and we have seen improving quarterly like-for-like sales performance."

In contrast to Panmure, UBS analyst Miguel Borrega believes the rebasing of the dividend and underlying weak trends will put pressure on the shares. He has a 'sell' rating and 90p price target.