The Lemon Fool

Well RSW have decided to take down the FOR SALE board.

https://www.investegate.co.uk/renishaw- ... 00033726E/

Given the statement:

The Board carefully reviewed a number of proposals with its advisers and unanimously concluded that none would meet the Board's objectives of delivering an outcome that satisfactorily met the interests of all stakeholders.

it seems that no potential suitors have come forward with right price+conditions criteria. Throughout the FSP the market seems to have steadily marked them down from £65 to £50 per share. I'm wondering how far to wait for the SP to settle before I consider another position here.

Matt

I've held RSW since September/October 2011 and enjoyed strong returns. I'm very glad that private equity did not get their hands on it.

As to its current valuation, it does look expensive on conventional metrics. I bought it cheaply with a dividend yield around 4.5% as I recall, however the dividend yield is now 1.1% or so despite continued dividend growth and the full restoration of the dividend to 2019 levels after eliminating it for 2020.

An analyst from Berenberg was quoted on CityWire a year or so back:

He highlighted the group’s ‘market leadership, founder-led, high insider ownership, net cash balance sheet, and exceptional margins of 30% and return of 40% in good markets’.
‘Crucially, we also do not expect the stock’s strong momentum to fade in the near term,’ he said.
‘Our full year 2021/22 forecasts sit 8% and 22% ahead of consensus with history suggesting a two-year upgrade cycle is on the way.’
He said ‘billions in value’ could be added through the group’s novel Parkinson’s disease treatment and ‘additive manufacturing’ operations.

If these revenue streams come to fruition then it might not look expensive in hindsight at all.

Best wishes


Mark.

I really liked the look of this company when I investigated in 2013 a little later than Mark. 2 buys in 2013 at £19 and £17 looks like about 2.5% yield, I topped up in 2016 at £21 and I see sold about enough of the holding to extract my initial stake a year later. 60p a year will repair the income but it's the growth on this one for me.

ADrunkenMarcus wrote:I've held RSW since September/October 2011 and enjoyed strong returns. I'm very glad that private equity did not get their hands on it.

So wasn't the bidding process up for anyone (not just private equity)? That is, another engineering firm e.g. Bosch, Siemens etc.

I must admit I didn't fully research the FSP, but presumably anyone could have bidded for them. My naive assumption was that when the SP was in the £50-£65 range, other market participants didn't like the kind of money that they would have to offer.

thanks Matt

Good Company : "Tick"

Fair Price..... (based on the P/E).

I'm umming and awwing and have decided to sit on the fence and hope for a better entry point.

In the end, I cowarded out and opened a small punt in Baillie Giff UK Growth (BGUK) ....so, I now actually own a little bit of RSW!

TheMotorcycleBoy wrote:

ADrunkenMarcus wrote:I've held RSW since September/October 2011 and enjoyed strong returns. I'm very glad that private equity did not get their hands on it.

So wasn't the bidding process up for anyone (not just private equity)? That is, another engineering firm e.g. Bosch, Siemens etc.

I don't think private equity could have met the founders' criteria.

Best wishes


Mark.

Although a year old, here's an article by Phil Oakley. I'm not a subscriber to IC but it might be readable in incognito mode in a browser....

https://www.investorschronicle.co.uk/co ... -weigh-up/

He thought it was too dear at sub £30.

Where does the business go next when the main shareholders want to divest?

( no holding)

monabri wrote:Where does the business go next when the main shareholders want to divest?

( no holding)

Onward and upwards.

Best wishes


Mark.