Friday, July 20, 2012

Fri 20 July 2012 - Morning Report

Good morning! Another busy morning for announcements, many of which are from companies I've never heard of. Which is why doing these morning reports is useful, in flagging up companies that I might otherwise never have noticed. But there's clearly only time to have a very superficial look at the key figures, and the outlook.

In passing, you might also notice that I have allowed Google to place 2 adverts on each page, which I think is only mildly intrusive. The purpose, to be blunt, is to raise a small amount of ad revenue, but this only occurs if the occasional reader is good enough to notice them, and follow through (I'm not allowed to spell it out, but hopefully you get the drift). So that is one small way to perhaps occasionally show your appreciation for my early starts!

ECO Animal Health Group (EAH) commits the sin of using the word "eco", "clean", or "environmental" in their name, which instantly puts me off investing in anything so named. However, at first glance their results look pretty good, with a 32% rise in profits afer tax. 42% rise in diluted EPS to 4.2p.
25% increase in divi to 3.75p, and has £9.5m net cash.

At 257p the mkt cap is an eye watering £142m, so perhaps not quite a bargain after all! I'd be interested at a quarter of that price, but otherwise forget it.
The huge premium price seems to hinge on them achieving USA/Canada marketing authorisations in the future. I'm not prepared to pay up-front, sorry.

Bizarre micro cap of the day award goes to Sports Stars Media (SPSM), which describes itself as a "sports personality animation business", developing a cartoon called "Mourinho and the Special Ones". I am not making this up.
I really do wish AIM would stop allowing rubbish like this to List.

Stockbroker WH Ireland (WHI) Interims look pretty poor - profits down by two thirds to £0.5m for the half year to 31 May. Still, at least they're still profitable. With no dividend it's difficult to see why anyone would want to buy the shares, although they do state an intention to resume divis when prudent.

£8m mkt cap marketing minnow Hasgrove (HGV) might be worth a look, as results show a decent improvement. The half year trading update shows turnover up 16% to £9.0m, and profit up 7-fold from £0.1m to £0.7m. Small numbers, but very nice growth, and they indicate "confidence in being able to achieve our full year expectations", so looks potentially interesting. Net debt down to £1m. (PDC) puts out an AGM statement, indicating softer trading, but gives no numbers, which strikes me as a bad idea - much better to be precise and tell it like it is. Vagueness just fuels uncertainty, and makes investors fear the worst.

Their 9% divi yield has not been fully covered by earnings for the last 3 years, so I doubt that can be maintained at such a high level. Probably best to avoid these I think.

If I had to invest in any property company, it would probably be London & Stamford (LSP). They've got a great track record of having raised money, sat on it through the downturn, and then investing in great assets at the right price. Pays a 6.2% divi yield too. Their IMS this morning details current progress. So a nice geared play on quality commercial property in my opinion.

FTSE 100 futures set to open slightly down 6 points in a moment.

Recommended cash offer for Goals Soccer Centres at 144p. Nice company, I held these some time ago.

That's it, run out of time. Have a good day!

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