Wednesday, November 14, 2012

Wed 14 Nov - INL, SBRY, SDY, BLNX

Good morning. Nice and early again today. Please note my new article last night on excessive board room pay at small, AIM-listed property company Inland Homes (INL). Should be an interesting AGM on 27 Nov, I'll be attending to make these points in person. Directors really do need to think more carefully about aligning their rewards with shareholder value, and not simply using the company like a personal slush fund.

I regard good corporate governance, and fair executive pay, aligned with shareholder interests, as being of absolutely paramount importance. If that means having the occasional scrap with Directors, then so be it. Let's hope these Directors are sensible, and listen to shareholder concerns, making the necessary reductions in pay.

Turning to today's results, although I don't usually do large caps, I do have a long position in Sainsbury's (SBRY), as the valuation seems undemanding, and as a customer they just seem to be executing so well. Whilst Tesco are a shambles from a customer perspective, and have in my opinion completely lost the plot.

Sainsbury's interim results to 29 Sept show sales up 4%, and LFL (like-for-like) sales up 1.7% (this measure strips out the distorting impact of new shop openings & closures). Underlying EPS is up 9.4% to 15.2p, and the interim divi is up 6.7% to 4.8p. That looks a bit ahead of forecasts I think, so could be good news for the share price today, hopefully.

The shares look attractive to me, with a 4.8% forecast divi yield, and steady earnings growth, combined with a PER of about 11-12. There is some debt & a pension deficit, but all looks under control to me.

There's probably not that much short term upside on the share price, maybe 10-20%, but as a long term hold for the divis, it looks pretty attractive to me.

Had a quick look at Speedy Hire (SDY) interim results, which look pretty encouraging, with a 37% increase in adjusted PBT to £6.6m.
EPS is up 23% to 1.1p. According to Stockopedia, the forecast PER is 14 this year, falling to 11 next year, so that looks about right.

Also had a quick look at results from Blinkx (BLNX), but I have absolutely no idea how to value it. Great top line growth, but not much profit. So the £255m mkt cap looks very racy to me.

That's about it for today. Lots more results, but larger caps & resource stocks, which I don't cover here.

Please check out my sister website, which is pretty much finished now. It's a value investing website that I've set up using a proprietory stock screening system called Performance Analysis Scores (developed by an eminent UK Business School Professor), which I have exclusive access to.

I pick a "share of the month" and am running an online model portfolio to track performance of the small caps picked using the PAS system & my interpretation of it. The deal is that the site is free, but to get the password to access the most recent article, you have to register for the email newsletter.
I'll then earn a small income from occasional (less than 1 per week, and indeed none so far!) emails of financial-related things that I think are interesting. No spam or scammy things, I promise, just genuinely interesting investment ideas.

You can of course unsubscribe from the email list any time, and I will never sell or pass on your email details to anyone else. Anyway, do check it out & let me know what you think! To save me having to do another mail out, as a one-off, the password for the Nov 2012 share of the month article is: timegets
As always, please always DYOR.

Regards, Paul.

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