It's a company I have followed for some time, having first advised buying the shares at 35p ('Tapping into a pensions payday', 27 Apr 2015). They subsequently doubled in value before profit-taking set in and I last rated them a buy at 55p when the company reported a bumper set of full-year results ('Lowly rated, cash rich pensions play', 10 Mar 2016).
However, the price has been under pressure since then even though STM has no financial worries - net funds of £8m account for a third of its market value - and analyst Duncan Hall at brokerage FinnCap predicts EPS will rise from 3.8p to 4.9p in 2016 and is pencilling in a dividend of 1.6p, up from 0.9p last year. On the face of it, the shares are seriously undervalued on seven times last year's cash-adjusted earnings, hence my call to the boss.