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Rotork (ROR)

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ADrunkenMarcus
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Rotork (ROR)

#14212

Postby ADrunkenMarcus » December 11th, 2016, 8:58 pm

Rotork is one of my largest holdings, bought from summer 2015 until spring 2016 and including large tranches bought at 163-172p in April 2016. Unfortunately, the price is now up to 247.5p and a dividend yield of 2.1 percent, whereas it yielded 3.1 percent for my lowest tranche. Nonetheless it has never been the highest yielder.

From 2000-15, it averaged a 22.3 percent operating margin; return on capital employed has averaged over 44 percent, with the lowest figure at 19.1 percent in 2015.

A good write up, IMHO:

http://maynardpaton.com/2016/02/10/roto ... -45-years/

Best wishes


Mark.

ADrunkenMarcus
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Re: Rotork (ROR)

#77370

Postby ADrunkenMarcus » August 27th, 2017, 12:02 pm

Another nice article on Rotork:

https://seekingalpha.com/article/409304 ... g-stronger

Best wishes

Mark.

ADrunkenMarcus
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Re: Rotork (ROR)

#109762

Postby ADrunkenMarcus » January 12th, 2018, 9:25 am

I topped up Rotork the day before yesterday at 287p. Not a value share by any means and I had previously bought at much lower levels (both by price and P/E). I was annoyed I hadn't been able to buy at 277p. Nonetheless, over a long term holding period I think quality wins out.

HSBC put out a broker note on the company today and a target price of 335p. Cue a rise to 304p. Is the company 6% more valuable than two days ago? Of course not! What power these broker notes have. Maybe the rising oil price had something to do with it too.

Best wishes

Mark.

ADrunkenMarcus
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Re: Rotork (ROR)

#134023

Postby ADrunkenMarcus » April 23rd, 2018, 7:51 am

Rotork unleased a Q1 trading update.

In the first quarter, revenue increased by 10.2% (+15.8% OCC) with order intake up 20.9%, or 27.0% on an organic constant currency (OCC) basis, reflecting a continuation of the more favourable market trends seen during the last quarter of 2017 and the receipt of several significant orders. The order book at 1 April 2018 was £228.3m, 18.6% (21.5% OCC) higher than at 31 December 2017 and 12.3% higher than Q1 of 2017...

[snip]

As previously communicated, we are committed, over time, to returning Rotork to the higher levels of organic growth and margins previously delivered by the Group, on a long term and sustainable basis, and are engaged in a series of reviews to examine our routes to market, innovation funnel, operations footprint, supply chain, talent development and IT systems...

[snip]

Outlook

We are encouraged by the stronger than anticipated order intake in the first quarter. We now expect revenues for the full year to show mid to high single digit growth over last year on a reported basis, despite a currency headwind of circa 5%, based on current rates.

As previously announced, we intend to invest much of the profit contribution from the anticipated increase in revenue in new products, an expansion of our service infrastructure and accelerated investment in our IT infrastructure to support our growth acceleration programme. Despite an unfavourable divisional mix, with stronger growth in Fluid Systems, and a small number of large projects in Asia both having a dilutive impact, we now expect adjusted operating margins to be slightly ahead of the prior year, given the stronger than anticipated growth.


http://otp.investis.com/clients/uk/roto ... id=1001831

ADrunkenMarcus
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Re: Rotork (ROR)

#134234

Postby ADrunkenMarcus » April 23rd, 2018, 7:34 pm

Rotork shares rose to almost 336p at one point today, an all time high. I noticed the brokers scrambling to update their forecasts and recommend a buy, when they were arguing the opposite when the shares were cheap. Muppets!

Best wishes

Mark.

ADrunkenMarcus
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Re: Rotork (ROR)

#182286

Postby ADrunkenMarcus » November 22nd, 2018, 12:37 pm

Rotork went floppy today, despite confirming full year expectations. Down 11% or so to 251p. The forward dividend yield is now 2.6% for 2019 - down on the 3.4% I secured on an earlier purchase, but it might be worthwhile topping up.

Best wishes

Mark

ADrunkenMarcus
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Re: Rotork (ROR)

#321207

Postby ADrunkenMarcus » June 24th, 2020, 9:48 pm

Rotork did not pay a final 2019 dividend. I suspect they are being super cautious.

It will be interesting to see how the next few years pan out. By 2022, its forecast to have a net cash position of 2.2 times its forecast 2020 profit before tax. Historically, Rotork has actually paid special dividends where they had no other use for the cash.

Best wishes

Mark.

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Re: Rotork (ROR)

#321230

Postby dspp » June 24th, 2020, 11:53 pm

ADrunkenMarcus wrote:Rotork did not pay a final 2019 dividend. I suspect they are being super cautious.

It will be interesting to see how the next few years pan out. By 2022, its forecast to have a net cash position of 2.2 times its forecast 2020 profit before tax. Historically, Rotork has actually paid special dividends where they had no other use for the cash.

Best wishes

Mark.


Rotork are historically very exposed to the oil cycle. I am expecting one more good cycle. Only one.

regards, dspp

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Re: Rotork (ROR)

#321346

Postby dspp » June 25th, 2020, 11:53 am

ReallyVeryFoolish wrote:
ADrunkenMarcus wrote:I topped up Rotork the day before yesterday at 287p. Not a value share by any means and I had previously bought at much lower levels (both by price and P/E). I was annoyed I hadn't been able to buy at 277p. Nonetheless, over a long term holding period I think quality wins out.

HSBC put out a broker note on the company today and a target price of 335p. Cue a rise to 304p. Is the company 6% more valuable than two days ago? Of course not! What power these broker notes have. Maybe the rising oil price had something to do with it too.

Best wishes

Mark.

I never see the attraction of this company as an investment. The oil and gas industry customer base is usually quoted in the same sentence as the word "Rotork". I have to say, they are almost invisible in my oil and gas world (in my 48th year). They must desperatley need new lines of business and the valve actuator market is almost completely commoditised. There's likey a thousand firms I'd invest in ahead of Rotork. But that's just my view.

RVF


RVF,
I've seen (and used) plenty of Rotorks over the years in E&P, so maybe it depends on which projects one is on. They are also out there a lot in other process sectors: wastewater, chem, paper & pulp, refining. However I would agree that this is a very commoditised sector and I too cannot see the investment attraction.
regards,
dspp

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Re: Rotork (ROR)

#321349

Postby dealtn » June 25th, 2020, 12:05 pm

dspp wrote:
ReallyVeryFoolish wrote:
ADrunkenMarcus wrote:I topped up Rotork the day before yesterday at 287p. Not a value share by any means and I had previously bought at much lower levels (both by price and P/E). I was annoyed I hadn't been able to buy at 277p. Nonetheless, over a long term holding period I think quality wins out.

HSBC put out a broker note on the company today and a target price of 335p. Cue a rise to 304p. Is the company 6% more valuable than two days ago? Of course not! What power these broker notes have. Maybe the rising oil price had something to do with it too.

Best wishes

Mark.

I never see the attraction of this company as an investment. The oil and gas industry customer base is usually quoted in the same sentence as the word "Rotork". I have to say, they are almost invisible in my oil and gas world (in my 48th year). They must desperatley need new lines of business and the valve actuator market is almost completely commoditised. There's likey a thousand firms I'd invest in ahead of Rotork. But that's just my view.

RVF


RVF,
I've seen (and used) plenty of Rotorks over the years in E&P, so maybe it depends on which projects one is on. They are also out there a lot in other process sectors: wastewater, chem, paper & pulp, refining. However I would agree that this is a very commoditised sector and I too cannot see the investment attraction.
regards,
dspp


I owned from 2016-18, but without looking at my notes I can't recall my reason for selling. Looking at the numbers it was a good investment though, so maybe this prompt will be useful for me having another look.

It's a strong cash generator, and has a decent ROCE (and ROE), so passes the initial filter at least.

ADrunkenMarcus
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Re: Rotork (ROR)

#321912

Postby ADrunkenMarcus » June 26th, 2020, 7:59 pm

Rotork has generated a positive return for me but I do wish I had put the capital that I did put into Rotork into Spirax Sarco Engineering instead (I bought them both in 2015): Rotork is, currently, up 32 percent in capital terms whereas Spirax is up 210 percent! Spirax has continued to pay a dividend, too. An example of de-worsification - at today's prices anyway as I could have just had Spirax.

Rotork has historically had good operating margins, strong ROCE and good cash generation with a decent balance sheet and occasional special dividends. It is, however, concerning that over 50 percent of revenues are oil and gas related. This is something they are aware of and are trying to diversify. It is a bit of a recovery situation but the new CEO is highly regarded and had been making progress IMHO before Corona kicked off. As noted, Rotork's share price tends to track oil price movements and they have historically been correlated.

Best wishes

Mark.

ADrunkenMarcus
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Re: Rotork (ROR)

#331449

Postby ADrunkenMarcus » August 6th, 2020, 8:35 pm

Rotork is no longer on the list of companies cancelling their dividends: the final for 2019, due in May 2020, is now being paid in September 2020 instead of the interim for 2020. And a full year dividend for 2020 comprising interim and final will be paid in May 2021. I assume the 'normal' timetable of dividend payments will resume after that.

Best wishes

Mark.


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