Bebies Traynor (BEG)
Anpario (ANP)
Intercede (IGP)
Elektron Technology (EKT)
Acal (ACL)
Friday, February 1, 2013
Small Cap Report (1 Feb) - BEG, ANP, IGP, EKT, ACL
Please click here to go directly to today's report on Stockopedia (free, and no registration required). Companies covered are:
Bebies Traynor (BEG)
Anpario (ANP)
Intercede (IGP)
Elektron Technology (EKT)
Acal (ACL)
Bebies Traynor (BEG)
Anpario (ANP)
Intercede (IGP)
Elektron Technology (EKT)
Acal (ACL)
Thursday, January 31, 2013
Small Cap Report (31 Jan) - AGL, HYNS, RGD, MBH, NBI, ITM
Please click here to go directly to today's report on Stockopedia (free, and no registration required). Companies covered are:
Angle (AGL)
Haynes Publishing (HYNS)
Real Good Foods (RGD)
Michelmersh Bricks (MBH)
Northbridge Industrial Services (NBI)
ITM Power (ITM)
Angle (AGL)
Haynes Publishing (HYNS)
Real Good Foods (RGD)
Michelmersh Bricks (MBH)
Northbridge Industrial Services (NBI)
ITM Power (ITM)
Please feel free to leave comments & discussion below the article on Stockopedia.
Wednesday, January 30, 2013
Small Cap Report - ZZZ, TRCS, HRN, GBG, SPE, RNWH
Please click here to go directly to today's report on Stockopedia (free, and no registration required). Companies covered are:
Snoozebox (ZZZ)
Tracsis (TRCS)
Hornby (HRN)
GB Group (GBG)
Sopheon (SPE)
Renew (RNWH)
Snoozebox (ZZZ)
Tracsis (TRCS)
Hornby (HRN)
GB Group (GBG)
Sopheon (SPE)
Renew (RNWH)
Tuesday, January 29, 2013
Small Cap Report - PLA, NFC, DLC, SPO, NWF, CFX, MWG, CCT, TCG
Click here to go straight to today's report on Stockopedia (it's free, and no registration required)
Today's report covers the following companies;
Plastics Capital (PLA)
Next Fifteen Communications (NFC)
Delcam (DLC)
Sportech (SPO)
NWF (NWF)
Colefax (CFX)
Modern Water (MWG)
Character (CCT)
Thomas Cook (TCG)
Monday, January 28, 2013
Small Cap Report - AMO, CLL, TMMG, FTC, PRV, SEPU, SPRP, KBC
Good morning!
Amino Technologies (AMO)
Cello (CLL)
Mission Marketing (TMMG)
Filtronic (FTC)
Porvair (PRV)
Sepura (SEPU)
Sprue Aegis (SPRP)
KBC Advanced Technologies (KBC)
As mentioned last week, my morning small cap reports are now appearing exclusively on Stockopedia. Everything is the same, they are free to read, and the content is the same, and you can leave comments on Stockopedia too.
The following companies are mentioned today;
Amino Technologies (AMO)
Cello (CLL)
Mission Marketing (TMMG)
Filtronic (FTC)
Porvair (PRV)
Sepura (SEPU)
Sprue Aegis (SPRP)
KBC Advanced Technologies (KBC)
Friday, January 25, 2013
Fri 25 Jan - GBO, TMMG, CRE, API, SAL, CDY
Good morning. First my big news! As you know, I've been looking at ways of trying to earn a bit of income from these reports, and have weighed up lots of options (advertising, affiliate marketing, charging for access, writing on other websites, etc). Thank you very much indeed for the many helpful responses - many readers have emailed me with some great ideas, and offers of help, which have helped steer me in the right direction.
The deal I've agreed is with Stockopedia. As readers might already have spotted, I'm a big fan of Stockopedia - it's a very high quality site, with minimal advertising, and a wealth of high quality data, presented in innovative ways. It's designed for investors who dig into the numbers, do proper research, and want to constantly learn & improve their analysis & investing.
As such I think it's the perfect fit for my reports. So the deal I've done with Stockopedia is that my reports (which have already been syndicated to them free for several months) will now appear exclusively on Stockopedia, and the best bit is that they will remain free! You won't even need to register with Stockopedia to read them, and you will also be free to leave comments & discussion there.
I will get paid (based on page views, so would be good if you could spread the word & help me increase the readership).
The second best bit is that I retain complete control over what I write, this is a genuine no-strings-attached deal, where I don't have to promote anything, they just like my reports & want me writing my morning reports (and other stuff) on their site.
So I'm absolutely delighted with this outcome, and hope you will be pleased too. We start on Monday 28 Jan 2013.
What will happen is this - a post will appear here on this Blog as normal each morning. However, it will just be a title, listing which companies I'm writing about that day, and there will be a link to click through to the full article on Stockopedia.
The beauty of that is it keeps this Blog alive, and you can still use the search box here to find my thoughts on particular companies - and it will throw up all the relevant articles pre-Stockopedia as well as on Stockopedia.
OK, let's look at this morning's RNSs.
Globo (GBO) is a share I've always had nagging doubts about, after reading their Annual Report. It is regularly promoted in the financial press (which rings if not alarm, then at least mild warning bells).
They divested their Greek operations in Dec 2012. It's a very lop-sided disposal deal with only E1m received on signing, and the other E10.2m sales proceeds deferred. Hmmm. The first thing I would do when scrutinising Globo's next set of accounts is to write off that E10.2m debtor!
The other thing I would look closely at, is their policy of capitalising internal costs into intangible assets. You might find that profit is nowhere near as high as they claim, once you adjust the accounts to a more conservative basis expensing all costs.
However there's no denying that the trading statement this morning sounds very good. EBITDA is expected to be E29m for 2012, up 42%. I'd want to add back the costs they capitalise though, and work out what the profit really is, rather than this inflated EBITDA figure.
Their mobile offerings, CitronGO!, GO!Social, and GO!Enterprise have all shown strong sales growth. It does look tempting, but I'm not happy with the accounts, so will pass on it (will probably kick myself when they double or triple from here).
Mission Marketing (TMMG) looks potentially interesting. I think this is a good time to be buying into cheap, cyclical shares, such as PR & Marketing companies - several of which are still on cheap multiples of earnings. They have operational gearing, which means that when the economy improves (as I believe is likely for 2013), then profits rise disproportionately fast when increased turnover is achieved (due to most costs being fixed, so extra turnover drops through to much higher profit).
They put out a nice bouncy RNS this morning, gushing about a new contract win (Harley-Davidson) for their subsidiary "Big", based in Leicester. There are no figures of course, that would just complicate the message!
Someone was telling me the other day that they never use advisers based in London, because if you use people based elsewhere in the UK, you get the same service for a much lower price. Worth considering as a general point.
TMMG is on a fwd PER of only 5.8, but it has quite a bit of debt, equivalent to just over 50% of the mkt cap, so on a crude basis that would take the PER up to nearer to 10, which is worth considering, but not amazingly cheap.
Quite low margin work too, and no dividend, but could be a nice cyclical recovery investment over the next couple of years? I bought into Creston (CRE) recently, who operate in a similar space, but the beauty of Creston is that you get a lovely 4% dividend yield whilst you wait for the shares to go up.
With interest rates so low, I think dividends are very important, and buying into high yielding shares is a key part of my investing strategy at the moment. Although I'm also mindful of the fact that we're currently in a roaring bull market for small-mid caps, and hence the emphasis will gradually shift back to aggressive ratings for growth, rather than value.
I think it's important to adapt one's strategy to prevailing market conditions, so I'm also hunting around more for early stage growth situations, so I might drop my minimum mkt cap limit from £10m to £5m accordingly, as I think the risk of de-Listings is receding, especially for companies that are trading well.
A wobbly-sounding statement from API Group has been published this morning. This company put itself up for sale quite a long time ago, and there haven't been any takers yet. Today's update says that indicative proposals have been below the current share price of 90p, and there have been no formal offers as yet.
The shares have fallen to 76p, and risk-reward doesn't look great to me, even at that price. We now know the upside is probably minimal, since bids (if any) are likely to be below 90p, and the downside case (if bid talks are called off completely) would probably take the shares back down to 60p.
It doesn't seem to have paid a divi for 12 years either, so I'm pretty sceptical on this one, but who knows, things can change & maybe a bid will emerge?
Spaceandpeople (SAL) is a £20m mkt cap company which manages promotional space in shopping centres, mobile kiosks, etc. Their trading update today says that 2012 results should be in line with market expectations. That is for just under 8p EPS, so at 95p the shares are on a PER of about 12, which is probably about right.
The divi isn't bad though, and a yield of 3.5% is expected for 2012.
They also report that net cash has risen to £391k. Not huge, but at least it's positive.
Casdon (CDY) is a tiny company, making tiny products - miniature toys.
Their interim results this morning are excellent, with profits having more than doubled to £693k. That makes the £2.7m mkt cap (even after this morning's 20% rise!) look potentially exciting.
I tried to speak to the CEO a moment ago, but he wasn't in, so I spoke to their accountant, who wasn't very helpful. Although I did glean that the Interims probably contained one-off sales which are not likely to be repeated, which is hinted at in the RNS. So unsustainable profits, and an uncommunicative company, mean I won't be investing here.
OK that's it for today, have a great weekend, and see you back here on Monday morning, for the link to my usual morning report, but on Stockopedia.
Best Wishes,
Paul.
The deal I've agreed is with Stockopedia. As readers might already have spotted, I'm a big fan of Stockopedia - it's a very high quality site, with minimal advertising, and a wealth of high quality data, presented in innovative ways. It's designed for investors who dig into the numbers, do proper research, and want to constantly learn & improve their analysis & investing.
As such I think it's the perfect fit for my reports. So the deal I've done with Stockopedia is that my reports (which have already been syndicated to them free for several months) will now appear exclusively on Stockopedia, and the best bit is that they will remain free! You won't even need to register with Stockopedia to read them, and you will also be free to leave comments & discussion there.
I will get paid (based on page views, so would be good if you could spread the word & help me increase the readership).
The second best bit is that I retain complete control over what I write, this is a genuine no-strings-attached deal, where I don't have to promote anything, they just like my reports & want me writing my morning reports (and other stuff) on their site.
So I'm absolutely delighted with this outcome, and hope you will be pleased too. We start on Monday 28 Jan 2013.
What will happen is this - a post will appear here on this Blog as normal each morning. However, it will just be a title, listing which companies I'm writing about that day, and there will be a link to click through to the full article on Stockopedia.
The beauty of that is it keeps this Blog alive, and you can still use the search box here to find my thoughts on particular companies - and it will throw up all the relevant articles pre-Stockopedia as well as on Stockopedia.
OK, let's look at this morning's RNSs.
Globo (GBO) is a share I've always had nagging doubts about, after reading their Annual Report. It is regularly promoted in the financial press (which rings if not alarm, then at least mild warning bells).
They divested their Greek operations in Dec 2012. It's a very lop-sided disposal deal with only E1m received on signing, and the other E10.2m sales proceeds deferred. Hmmm. The first thing I would do when scrutinising Globo's next set of accounts is to write off that E10.2m debtor!
The other thing I would look closely at, is their policy of capitalising internal costs into intangible assets. You might find that profit is nowhere near as high as they claim, once you adjust the accounts to a more conservative basis expensing all costs.
However there's no denying that the trading statement this morning sounds very good. EBITDA is expected to be E29m for 2012, up 42%. I'd want to add back the costs they capitalise though, and work out what the profit really is, rather than this inflated EBITDA figure.
Their mobile offerings, CitronGO!, GO!Social, and GO!Enterprise have all shown strong sales growth. It does look tempting, but I'm not happy with the accounts, so will pass on it (will probably kick myself when they double or triple from here).
Mission Marketing (TMMG) looks potentially interesting. I think this is a good time to be buying into cheap, cyclical shares, such as PR & Marketing companies - several of which are still on cheap multiples of earnings. They have operational gearing, which means that when the economy improves (as I believe is likely for 2013), then profits rise disproportionately fast when increased turnover is achieved (due to most costs being fixed, so extra turnover drops through to much higher profit).
They put out a nice bouncy RNS this morning, gushing about a new contract win (Harley-Davidson) for their subsidiary "Big", based in Leicester. There are no figures of course, that would just complicate the message!
Someone was telling me the other day that they never use advisers based in London, because if you use people based elsewhere in the UK, you get the same service for a much lower price. Worth considering as a general point.
TMMG is on a fwd PER of only 5.8, but it has quite a bit of debt, equivalent to just over 50% of the mkt cap, so on a crude basis that would take the PER up to nearer to 10, which is worth considering, but not amazingly cheap.
Quite low margin work too, and no dividend, but could be a nice cyclical recovery investment over the next couple of years? I bought into Creston (CRE) recently, who operate in a similar space, but the beauty of Creston is that you get a lovely 4% dividend yield whilst you wait for the shares to go up.
With interest rates so low, I think dividends are very important, and buying into high yielding shares is a key part of my investing strategy at the moment. Although I'm also mindful of the fact that we're currently in a roaring bull market for small-mid caps, and hence the emphasis will gradually shift back to aggressive ratings for growth, rather than value.
I think it's important to adapt one's strategy to prevailing market conditions, so I'm also hunting around more for early stage growth situations, so I might drop my minimum mkt cap limit from £10m to £5m accordingly, as I think the risk of de-Listings is receding, especially for companies that are trading well.
A wobbly-sounding statement from API Group has been published this morning. This company put itself up for sale quite a long time ago, and there haven't been any takers yet. Today's update says that indicative proposals have been below the current share price of 90p, and there have been no formal offers as yet.
The shares have fallen to 76p, and risk-reward doesn't look great to me, even at that price. We now know the upside is probably minimal, since bids (if any) are likely to be below 90p, and the downside case (if bid talks are called off completely) would probably take the shares back down to 60p.
It doesn't seem to have paid a divi for 12 years either, so I'm pretty sceptical on this one, but who knows, things can change & maybe a bid will emerge?
Spaceandpeople (SAL) is a £20m mkt cap company which manages promotional space in shopping centres, mobile kiosks, etc. Their trading update today says that 2012 results should be in line with market expectations. That is for just under 8p EPS, so at 95p the shares are on a PER of about 12, which is probably about right.
The divi isn't bad though, and a yield of 3.5% is expected for 2012.
They also report that net cash has risen to £391k. Not huge, but at least it's positive.
Casdon (CDY) is a tiny company, making tiny products - miniature toys.
Their interim results this morning are excellent, with profits having more than doubled to £693k. That makes the £2.7m mkt cap (even after this morning's 20% rise!) look potentially exciting.
I tried to speak to the CEO a moment ago, but he wasn't in, so I spoke to their accountant, who wasn't very helpful. Although I did glean that the Interims probably contained one-off sales which are not likely to be repeated, which is hinted at in the RNS. So unsustainable profits, and an uncommunicative company, mean I won't be investing here.
OK that's it for today, have a great weekend, and see you back here on Monday morning, for the link to my usual morning report, but on Stockopedia.
Best Wishes,
Paul.
Thursday, January 24, 2013
24 Jan 2013 - KBC, RGS, JDG, GTC
Good morning. I often do this strange thing, where for no apparent reason, I start humming or singing a tune. On stopping and thinking what tune it is, the lyrics are always something directly relelvant to whatever I happen to be doing or feeling at the time. This morning, Bill Withers song "Lovely Day" popped into my head, and it was just after reading the trading update from KBC Advanced Technologies (KBC)!
Their statement today indicates 2012 ended strongly, with a $100m contract award from EP PetroEcuador (previously announced). KBC provides software & consultancy services for optimising profit from oil refineries.
Results for y/e 31 Dec 2012 are expected to be slightly ahead of forecast.
I bought shares in KBC recently, after they announced that humungous contract win. Even after an initial big surge in share price, the valuation was still cheap - as is often the case when really significant news comes out - the market takes time to digest news, people stop buying the shares after a (say) 15-25% rise in share price, yet if the previous valuation was really bombed out, and the news is really good, then that can often still be a buying opportunity even after the initial rise.
I've just bought a few more KBC at 66p this morning. The 2012 forecast PER is 10.7, falling to 8.4 for 2013. That's too low considering how well they are trading, in my opinion. They also just moved net cash positive, per today's RNS. I expect them to reinstate a divi soon, a further upward catalyst.
It's very surprising that the initial rise in SP this morning has since fizzled out, and this represents a buying opportunity at 65p in my opinion. However, please DYOR as usual. I'm adding it to "Paul's Picks" at the current offer price of 65p.
Another example of shares continuing to rise after positive trading updates, recently was Regenersis. I flagged it here on the morning of their results in Sept 2012 as being good value at 96p, and the shares have since continued rising to 171p. Am still kicking myself on that one - I not only spotted it was cheap, wrote about it here, but for some bizarre reason it didn't occur to me to buy any shares! Proverbial wood & trees perhaps? Somebody give me a kick next time! This is also why I set up a new page here (see menu above) called "Paul's Picks" where we can keep track of shares that I've flagged as looking good value, and see how they subsequently perform.
Hopefully it will validate my investing approach, or expose me an incompetent fool, so will be interesting to see which it is!
Judges Scientific (JDG) is a lovely business. They are a serial acquirer of small companies in the scientific instruments sector, where Britain apparently is a world leader. Their model is to borrow cheaply, then make small acquisitions at very cheap cashflow multiples, then repay the borrowings from cashflow in a short time frame (typically about 2 years). Then they just repeat the process. Their charismatic and brilliant CEO, David Cicurel, just hasn't put a foot wrong. As he said himself at a Mello Central meeting, it's not about synergies, it's about making cheap, good quality acquisitions using cheap bank loans.
Their trading statement this morning indicates a positive end to 2012, achieving expectations "with a good degree of comfort"! Order book is strong too.
The shares have been remarkable performers, but the price is well up with events now, in my opinion, at around the 1000p level. Growth becomes harder to achieve, since it is compound, and a PER of 15 looks towards the upper end of reasonable, in my view.
GETECH (GTC) puts out a positive trading update for the first 5 months of their year to 31 July 2013, expecting to exceed current market expectations. Forecast was for 3.5p EPS, which at 67p would put them on a lofty PER of 19 suggests upside is already priced-in.
I'm still planning the move of my morning market reports, and think you will be pleased with the outcome. All will be revealed shortly.
Best Wishes, Paul.
(Of the companies mentioned today, Paul holds shares in KBC only)
Their statement today indicates 2012 ended strongly, with a $100m contract award from EP PetroEcuador (previously announced). KBC provides software & consultancy services for optimising profit from oil refineries.
Results for y/e 31 Dec 2012 are expected to be slightly ahead of forecast.
I bought shares in KBC recently, after they announced that humungous contract win. Even after an initial big surge in share price, the valuation was still cheap - as is often the case when really significant news comes out - the market takes time to digest news, people stop buying the shares after a (say) 15-25% rise in share price, yet if the previous valuation was really bombed out, and the news is really good, then that can often still be a buying opportunity even after the initial rise.
I've just bought a few more KBC at 66p this morning. The 2012 forecast PER is 10.7, falling to 8.4 for 2013. That's too low considering how well they are trading, in my opinion. They also just moved net cash positive, per today's RNS. I expect them to reinstate a divi soon, a further upward catalyst.
It's very surprising that the initial rise in SP this morning has since fizzled out, and this represents a buying opportunity at 65p in my opinion. However, please DYOR as usual. I'm adding it to "Paul's Picks" at the current offer price of 65p.
Another example of shares continuing to rise after positive trading updates, recently was Regenersis. I flagged it here on the morning of their results in Sept 2012 as being good value at 96p, and the shares have since continued rising to 171p. Am still kicking myself on that one - I not only spotted it was cheap, wrote about it here, but for some bizarre reason it didn't occur to me to buy any shares! Proverbial wood & trees perhaps? Somebody give me a kick next time! This is also why I set up a new page here (see menu above) called "Paul's Picks" where we can keep track of shares that I've flagged as looking good value, and see how they subsequently perform.
Hopefully it will validate my investing approach, or expose me an incompetent fool, so will be interesting to see which it is!
Judges Scientific (JDG) is a lovely business. They are a serial acquirer of small companies in the scientific instruments sector, where Britain apparently is a world leader. Their model is to borrow cheaply, then make small acquisitions at very cheap cashflow multiples, then repay the borrowings from cashflow in a short time frame (typically about 2 years). Then they just repeat the process. Their charismatic and brilliant CEO, David Cicurel, just hasn't put a foot wrong. As he said himself at a Mello Central meeting, it's not about synergies, it's about making cheap, good quality acquisitions using cheap bank loans.
Their trading statement this morning indicates a positive end to 2012, achieving expectations "with a good degree of comfort"! Order book is strong too.
The shares have been remarkable performers, but the price is well up with events now, in my opinion, at around the 1000p level. Growth becomes harder to achieve, since it is compound, and a PER of 15 looks towards the upper end of reasonable, in my view.
GETECH (GTC) puts out a positive trading update for the first 5 months of their year to 31 July 2013, expecting to exceed current market expectations. Forecast was for 3.5p EPS, which at 67p would put them on a lofty PER of 19 suggests upside is already priced-in.
I'm still planning the move of my morning market reports, and think you will be pleased with the outcome. All will be revealed shortly.
Best Wishes, Paul.
(Of the companies mentioned today, Paul holds shares in KBC only)
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