Tuesday, October 9, 2012

Tue 9 Oct - POS, UTW, AN., MAYG

Good afternoon. A little later than usual today, I like to keep you on your toes!
Interestingly, quite a few positive trading updates today, let's have a look at those first;

Plexus Holdings (POS) shares are up 12% to 168p (£124m mkt cap) on a very positive trading statement, saying that "after tax profits and earnings per share materially in excess of current analysts' forecasts".
The trouble is, there are no forecast information on either Hemscott or DigitalLook, so I am completely in the dark about what the forecasts are?! Therefore uninvestable for me. Also, the mkt cap of £124m looks very warm, considering at the interim stage they only had turnover of £9.3m, and EPS of just 1.5p. But there again growth companies always look expensive.

The market also likes results today from Utilitywise (UTW), a utilities cost consultant to business. Shares are up 13% to 89p (mkt cap of £49m).
Proforma revenue is up 25% to £14.6m. So looks a very high PSR, but that's because their operating margin is so high, making £3.9m PBT.
Those figures are for the year-ended 31 July 2012.

EPS is up 23% to 5.4p, so the PER works out at 16.5, which looks reasonable considering the strong growth & high margins (sign of a moat).
The outlook sounds good too, "we look forward to a further period of exciting growth". So if you like growth companies, this might be worth a further look.
I wonder whether revenues are recurring, as energy saving sounds like something which might work as a one-off perhaps?
It has net cash too, although I haven't looked at the rest of the Balance Sheet.

Up 11% at 225p (£98m mkt cap) is Alternative Networks (AN.).
At first sight this looks very interesting. Their trading statement today says that results for y/e 30 Sept 2012 will be in line with expectations for profit, and above expectations for cashflow.
Net cash has risen to £20.5m, and they indicate they're looking at ways to return surplus cash through dividends, buybacks, and making earnings accretive acquisitions, etc.

Broker consensus is EPS of 21.4p, so that's a reasonable PER of 10.5 even after today's share price rise, and the divi yield is reckoned to be 5.4%. Certainly seems worthy of a deeper look, in my opinion.

I like the look of May Gurney (MAYG), which is an infrastructure support services group, whatever that means! Seems to run recycling plants from what I can gather. Need to do some more research on this one, but at first glance it looks good. The shares halved in Sept 2012 from 220p to 110p on a warning of several problem contracts, and the departure of the CEO by the looks of it.

Their H1 trading statement today sounds OK though - says that H1 trading in line, problems highlighted in Sept have been ring-fenced, good news on contract wins, and net debt is only £3m (plus finance leases of £74m).

With forecast EPS for this year of 24.6p, MAYG shares appear cheap at 136p today (up 7% on this announcement). That's a PER of only 5.5, and a stonking forward divi yield of 6.2% (based on 8.4p divis this year).

I like the look of this. Will do some more digging. Any views?

That's it for the moment. See you again hopefully a bit earlier tomorrow!

Regards, Paul.

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