Friday, February 6

Time to buy Flowgroup ?

Flowgroup tempting at new lower price !

Shares Magazine today recommend Flowgroup as a BUY. Shares in Flowgroup (FLOW:AIM) have collapsed by over 20% in 2 weeks but Shares Magazine believes the market has got it wrong, thus creating a fine buying opportunity.

Flowgroup launched its mCHP boilers on 26 January after years in development. But at a £3,675 price tag, investors appear to be presuming they are too expensive. The company issued an announcement on 28 January saying it was ‘not aware of any reason causing this. (the slump)’ Shares Mag believes the slump is due to a fundamental misunderstanding.

The core selling point to potential customers is in fact to be able to get a new mCHP boiler for no upfront cost, via financing provided by partner Zopa at a typical overall cost of £4,529.89, including interest. Customers will probably switch their energy supply to Flowgroup, and sign over their feed-in-tariff for five years, the company calculates average energy bill savings of £960 a year, and they get a new boiler. SM says this remains compelling to the approx. 1.6 million households that need to replace their boiler every year.

CEO Stiff reckons his company could supply as many as 480,000 units each year into the boiler replacement market. ‘We remain confident that our marketing programmes will continue to generate interest in what we expect to be one of the most revolutionary products in the home energy market,’.

This ambition appears to be supported by a firm commitment by manufacturing partner, the $4 billion global group Jabil Circuit to make no fewer than 500,000 units over the next few ears.

Shares Mag says : A potential game-changer energy company whose smart boiler technology and supply business heats homes, generates low carbon electricity and helps cut customer bills. An already compelling sales proposition will get better still as unit volumes drive down the boiler costs, and we see scope for the shares to rally strongly in 2015 towards.

Robbie Burns was also into these but sold for a small loss, he said however that at these new prices he could be tempted to buy back in. Me too! The price has already bounced back from 29p.

Poundland also looks tempting - Poundland

Check out too Malcy's list of 14 oil stocks that could prove a good investment - oil stocks