Latest news with #SpiraxGroup
Yahoo
a day ago
- Business
- Yahoo
Down 35% in a year, is this FTSE 100 stock a once-in-a-decade opportunity?
Shares in Spirax Group (LSE:SPX) have fallen 35% in the last 12 months. But that puts the FTSE 100 stock in unusually attractive territory and there are some familiar themes emerging. A combination of increased debt, higher interest costs, and a cyclical downturn have been weighing on the business. But that looks a lot like the position Rolls-Royce was in at the end of the pandemic… Spirax manufactures equipment that helps industrial operations like factories manage temperatures throughout their manufacturing processes. That might involve heating, cooling, or regulating. Its systems are often highly technical and mission-critical for its customers. This means the business benefits from resilient strong demand while also being difficult for other companies to disrupt. Acquisitions have been key to Spirax's growth over the last 10 years. By buying other businesses, it has expanded from steam-based solutions to include electric-based systems. Doing so has allowed the firm to expand its installed base of systems significantly. And the servicing and maintenance of these has provided the company with long-term, high-margin revenues. All of this sounds good, so the obvious question is why's the stock been falling? The answer is Spirax's revenues, margins, and profits have all come under pressure over the last few years. Most recently, demand from China – a key industrial market – has faltered. That's caused the FTSE 100 firm's sales to decline in the last couple of years. Over the longer term, the company's acqusitions have proved expensive. Spirax's long-term debt's gone from below £100m in 2016 to over £870m in 2024, which has caused interest costs to rise. As a result, margins have contracted and earnings growth has slowed and that's a sign of the ongoing risks with the business. But I think investors might have room for optimism. The falling Spirax share price has put the stock in interesting territory. On a price-to-earnings (P/E) basis, it trades at a multiple of around 22. That's unusually low for the company, though it's not meaningfully below where it was in 2018. But earnings have been volatile and that can make the P/E ratio an unreliable guide to valuation. In these situations, price-to-sales (P/S) and price-to-book (P/B) can be much more accurate metrics. And based on either of these, the stock's trading at some of its lowest multiples in the last 10 years. In other words, I think Spirax shares are unusually cheap at the moment. More importantly though, I think there are clear similarities the FTSE 100's top-performing stock of the last five years. At the end of the pandemic, Rolls-Royce had gone through a sharp drop in demand that had caused its debt to shoot up and its interest costs to surge. And we all know what's happened since then. I think it's striking how similar the situation with Spirax is at the moment. To some extent, the firm's problems are of its own making, but I think there could be similar opportunities ahead. The stock's a reminder of the risks that come with growth by acquisitions. But with its debt already starting to come down, investors should seriously consider whether now might be the time to buy. The post Down 35% in a year, is this FTSE 100 stock a once-in-a-decade opportunity? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Stephen Wright has no position in any of the shares mentioned. The Motley Fool UK has recommended Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
Yahoo
23-05-2025
- Business
- Yahoo
At UK£57.85, Is It Time To Put Spirax Group plc (LON:SPX) On Your Watch List?
Spirax Group plc (LON:SPX), is not the largest company out there, but it saw significant share price movement during recent months on the LSE, rising to highs of UK£79.15 and falling to the lows of UK£54.45. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Spirax Group's current trading price of UK£57.85 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Spirax Group's outlook and value based on the most recent financial data to see if there are any catalysts for a price change. We've discovered 1 warning sign about Spirax Group. View them for free. According to our valuation model, Spirax Group seems to be fairly priced at around 5.8% below our intrinsic value, which means if you buy Spirax Group today, you'd be paying a fair price for it. And if you believe the company's true value is £61.40, then there isn't much room for the share price grow beyond what it's currently trading. What's more, Spirax Group's share price may be more stable over time (relative to the market), as indicated by its low beta. View our latest analysis for Spirax Group Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 22% over the next couple of years, the future seems bright for Spirax Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation. Are you a shareholder? SPX's optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value? Are you a potential investor? If you've been keeping an eye on SPX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it's worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Spirax Group, and understanding this should be part of your investment process. If you are no longer interested in Spirax Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
23-05-2025
- Business
- Yahoo
At UK£57.85, Is It Time To Put Spirax Group plc (LON:SPX) On Your Watch List?
Spirax Group plc (LON:SPX), is not the largest company out there, but it saw significant share price movement during recent months on the LSE, rising to highs of UK£79.15 and falling to the lows of UK£54.45. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Spirax Group's current trading price of UK£57.85 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Spirax Group's outlook and value based on the most recent financial data to see if there are any catalysts for a price change. We've discovered 1 warning sign about Spirax Group. View them for free. According to our valuation model, Spirax Group seems to be fairly priced at around 5.8% below our intrinsic value, which means if you buy Spirax Group today, you'd be paying a fair price for it. And if you believe the company's true value is £61.40, then there isn't much room for the share price grow beyond what it's currently trading. What's more, Spirax Group's share price may be more stable over time (relative to the market), as indicated by its low beta. View our latest analysis for Spirax Group Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 22% over the next couple of years, the future seems bright for Spirax Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation. Are you a shareholder? SPX's optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value? Are you a potential investor? If you've been keeping an eye on SPX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it's worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Spirax Group, and understanding this should be part of your investment process. If you are no longer interested in Spirax Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Reuters
14-05-2025
- Business
- Reuters
British manufacturing firm Spirax falls as order delays impact profit margin
May 14 (Reuters) - Shares of Spirax Group (SPX.L), opens new tab fell more than 5% on Wednesday after the British manufacturing firm reported a slightly lower four-month profit margin as some customers moved their order shipments to later this year. The company also saw lower demand for large projects in its steam thermal solutions division, particularly in China and South Korea, where trading conditions remain challenging. Spirax provides thermal energy and fluid technology solutions in a range of industrial sectors, from healthcare and pharmaceuticals to transport and power generation. China and South Korea, which make up about 15% of its group sales, have been weighing on the business as clients cut back on expansion and due to an unstable political environment in Korea. Shares of the Cheltenham, UK-based company were down 4.6% at 6,280 by 0801 GMT. Spirax maintained its 2025 guidance for organic revenue growth and profit margin but now expects forex to be a 3% headwind to sales and 6% to profit, up from previous estimates of 2% and 4%, respectively. While the company said its local manufacturing facilities cushion it from any direct exposure to U.S. tariffs, it expects to mitigate any potential financial impact through surcharges, pricing and limited reorganisation of manufacturing activity. It reported organic revenue growth in low single-digit percentages for the first four months of the year, with an adjusted operating profit margin slightly lower than the same period in 2024.
Yahoo
12-03-2025
- Business
- Yahoo
Spirax Group Full Year 2024 Earnings: EPS Beats Expectations
Revenue: UK£1.67b (down 1.0% from FY 2023). Net income: UK£191.2m (up 4.1% from FY 2023). Profit margin: 12% (in line with FY 2023). EPS: UK£2.59 (up from UK£2.50 in FY 2023). All figures shown in the chart above are for the trailing 12 month (TTM) period Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 2.5%. Looking ahead, revenue is forecast to grow 4.5% p.a. on average during the next 3 years, compared to a 5.0% growth forecast for the Machinery industry in the United Kingdom. Performance of the British Machinery industry. The company's shares are down 5.1% from a week ago. You should always think about risks. Case in point, we've spotted 1 warning sign for Spirax Group you should be aware of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
