Monday, June 18, 2012

Strong start after Greek Election

Good morning! My first proper post. Greek Elections over the weekend seem to have been received well by markets - FTSE100 opened up about 50 points at 5550.

My portfolio - good announcement from Quintain Estates (QED), of a JV funding deal from a Hong Kong investor for their large Greenwich Peninsula site. My only reservation is that it seems to give away 60% of the equity in the project. Market loves the announcement, QED shares currently (08:11) up 21% to 40.5p. I got lucky here, and bought back in last week at about 33p.

I am seeing Quintain's management later today, at an investor meeting that Dave Stredder set up, should be interesting as I also went with him to their last AGM, where we gave the Board hell! I told them that the company is being run for the benefit of management & staff, not shareholders! The stunned look on their faces was a joy to behold as these pesky small shareholders gave them a grilling. Recent management changes, and Laxey sold out, who will be kicking themselves now.
RNS is here;

The only other small cap reporting today which interests me is Majestic Wines (MJW) - always liked their model of bulk wine sales from cheap premises, but it's never looked cheap enough to interest me into buying the shares.

MJW are flat at 410p for £260m mkt cap. EPS up 15% to 26p, good considering flat economy. Total dividends for the year up 20% at 15.6p, a pretty decent growing yield of 3.8%. PER is 15.8, so a tad pricey for me. Debt? It has net funds of £1m at 2 April (just after rents paid on 25 March), so none. Facilities available.

Results are here;

My verdict - good growth company, but priced about right. I would be a buyer around 300p if the chance arises.

Other shares in my portfolio;

Trinity Mirror (TNI) possibly starting to gain traction, it's 27/28p this morning, and is in my opinion the cheapest stock on the market - its true financial position is completely misunderstood by the market. Huge upside in my view.

Lamprell (LAM) - great company, shocking profits warnings recently caused huge fall from >300p to <100p. However, my view is this year's a write-off, but next year should be fine. Deal potential too. Hence I'm bullish on this one. Market responded very well to change of Chairman, up 20% on Friday. Up another 6% this morning to 101p, I'm going to run with this one.

Relief rally on FTSE100 fading already, now up 30 points (Futures were up 100 when they opened on Sunday night).

I remain of the view that there is some staggeringly good value in UK small caps, being created by the ongoing Eurozone crisis, which has shattered private investor confidence. However, in my opinion the Eurozone has no option but to eventually inflate away the public & private debt through some form of money printing from the ECB. But the Germans will only agree to this when the whole thing is teetering on the brink of collapse. This crisis has to be fixed, as the alternative of a disorderly collapse is too ghastly to imagine.


  1. Paul Curtis just Tweeted to say I've got the wrong end of the stick on the Greenwich deal. Apparently they were at 50%, so have only given away 10% to arrive at net 40% ownership now. I'll query this with management tonight, and report back tomorrow with clarification. DYOR as usual. Please feel free to comment directly on here - comments are open to all & are welcomed!

  2. Good stuff Paul.
    PS Laxey still hold 11.2% of Quintain. Will this be an overhang or will the Greenwich deal convince them to hold?

  3. Thx MrC. Are you going to the QED meeting tonight too?

  4. Why, is there humble pie and sour grapes on the menu?
    I'll sit at home and eat the egg off my face.

  5. OK! I'll publish a write-up of the meeting here hopefully tomorrow morning.