BAE Systems (BA.) the British aerospace and defence contractor was the subject of a pre-results assessment by myself last month which was not of the optimistic variety, produced its results for calendar 2012 on 21st February. It is to be congratulated on the speed at which it presented its numbers and on the optimistic presentation of the state of play. But my assessment is not changed and is, I think somewhat vindicated.
So that old fashioned (in scale) and very British (Yorkshire) non global business of supplying the 7% of the UK’s electricity has, as part of the price of converting half its highly efficient coal fired electricity generation capacity, to the generation of electric power from biomass - mainly imported, fast growing replaceable timber – is off the stock market's higher end dividend tariff. Before its results for last year to 31st December 2012, on a then share price of 609p, the published dividend yield for Drax (DRX) was 4.3%. That was then this is now.
Shares in EMIS Group (EMIS), a leading UK supplier of clinical software and related services to GP practices and other healthcare practitioners and a major software supplier to high street pharmacies, commenced 2013 at more than 900p but fell more than 16.5% (to 750p) on 24th January as the company reported “lower than planned revenues from the Australian defence contract, training and integrated care services. Group adjusted operating profit is expected to be marginally below analysts’ expectations, largely as a result of the accelerated staff and recruitment costs associated with the EMIS Web roll out and the slight revenue shortfalls highlighted above”. The shares have further declined since to trade at a current 650p, capitalising this AIM-listed company at £380.5 million. The following analyses whether this current, lower level represents value…
Phoenix IT Group (PNX), a fully-listed IT services company to UK enterprises, updated last week (13th February 2013) that it “currently believes the Group’s EBITDA for the year to 31 March 2013 will be around 10% below market expectations, but is encouraged by an improving order book and pipeline”. Having traded at more than 230p in 2012 and commenced 2013 at 184p, the shares presently trade at 157p, capitalising the company at £118.3 million. In light of the ‘improving order book and pipeline’, the following reviews whether there is value on offer here…
The share price of RBS (RBS) has headed due south since my bearish comments on the company last month. Reviewing the share in terms of its future dividend paying capacity in the light of recent history, I observed that in the different world and circumstance of 2007 ( when bank capital adequacy was seemingly almost inconsequential and some banks were running on low or dubious capital or both ) RBS had distributed only 30% of its earnings as dividends. That implied on a totally theoretical, best expectation 30% dividend payout from 36p of earnings per share, a dividend of 11..9p; translating into by way of academic exercise, into an annual yield of a mere 3.3%.
There are two things about energy supplier SSE Plc (it was until recently known as Scottish and Southern Electricity - which used to prompt thoughts of hairy highlanders incongruously tossing cables at a vicarage lawn tea party presided over by Miss Marples) which makes its shares a good dividend income play. But also, a share with some potential for long term capital appreciation relative to the FTSE 100 Index.
A report lands on my desk today from Edison Research on AIM Listed Gulfsands Petroleum (GPX) entitled “The road out of Damascus.” This report was commissioned by Gulfsands ( i.e. paid for) and so one would not expect a bearish conclusion. ‘tis always the way with research reports from commissioned firms ( like Edison or Hardman) or from a house broker - they want to say buy but sometimes just cannot do so. And so you get what is known as a “corporate hold” . i.e. sell. There is no recommendation on the report but with the shares at 111.75p it sets a risked valuation of the stock at 119p. I cannot see why anyone would buy a share for just 6% upside. Any sane investor would sell and switch into a stock with more upside.
Entertainment One (ETO), the London main market listed producer and distributor of film and television content, has updated that “full year earnings are anticipated to be in line with management’s expectations” on underlying revenue up 11% in the 10 month period to end January. The shares have risen from a 13.5p low hit in the depths of the markets 2009 despair to a current 188p. They did however trade above 200p in late 2011/early 2012 and, with a present market cap in excess of £500 million, the following offers my current take here…
A raft of announcements have been made by Sirius Minerals (SXX) today but amid the verbage the clear drift is not positive. The shares are off – at 25.25p – but the company is still valued at £339 million. That simply cannot be justified.I did suggest that holders at least top slice on January 31st at 27.75p as bulletin board frothed with excitement on news that the company had submitted a planning application for its Potash mine on the North York Moors – you can read that piece HERE
Bear raiders Lucian Miers and Evil Knievil are meeting for lunch today. I know, as I was invited but my liver is not up to it. However the main course should be humble pie. The bears predicted that Avanti would miss its targets at the interim stage. Moreover the results demonstrate very clearly that it is already more than two thirds of the way to hitting 2014 (not a misprint) numbers and that it continues to win business. The shares are a buy at 265p and could move sharply as the bears are squeezed. I sense that margin calls could well be served up at Evil towers today in time for pudding.
Telecom Plus (TEP), which trades as the Utility Warehouse and supplies a range of utility services (gas, electricity, fixed line telephony, mobile telephony and broadband internet) to both residential and business customers in the UK, has updated that a “continuing strong performance” means it remains “confident of reporting full year profits in line with current consensus market expectations”. The shares trade at 980p on the back of the announcement and are up from sub 300p on a three year view and from sub 650p on a one year view. With a market cap now of approaching £700 million, the following reviews whether there looks to remain value in the shares…
Shares in big data provider WANdisco (WAND) have raced ahead by 62.5p today on the back of a new product launch. For those who followed my advice to have a nibble at 493p on January 6th the reward is pretty clear. That WANdisco is making progress is without doubt but are we all getting a bit ahead of ourselves?
AIM listed GMA Resources (GMA) has just returned from an eight month suspension. A cash shell (with not a lot of cash) following the failure of its last hydrocarbon business venture it has now announced a RTO which will see it owning 90% of two mining assets in Kazakhstan. The shares returned from suspension on February 5th and promptly soared to 0.9p which in effect valued the business at £700 million. That forced the company to issue a statement re-explaining its share structure – in effect saying its stock was overvalued. The shares still trade at 0.24p but are still at least 60% overvalued.
Following from my piece on AIM-listed GB Group yesterday, I today comment on a fellow AIM-listed tech stock which also updated on trading towards the end of last month; Craneware plc (CRW). Despite its name and its being incorporated and headquartered in Scotland (Edinburgh), the company is actually a software provider focused on the US healthcare market. With offices in Atlanta, Arizona, Massachusetts and Tennessee, its software helps hospitals and other healthcare providers more effectively price, charge, code and retain revenue for patient care services and supplies – increasing their efficiency and minimising compliance risk. The following reviews the company’s recent trading update and investment outlook…
Russian Oil producer Ruspetro (RPO) has served up another shocking statement this morning – its habit of delivering nasty surprises does not change. Having advised a short at 83.5p on January 4th I suggested on 25th of January that having refinanced its debt it was “merely one to avoid.” The shock today is that it has decided not to refinance its debt or to undertake the partial debt for equity swap announced on January 25th. This leaves its cash position looking very tricky indeed and at 50.5p the shares are once again a sell.
Shares in AIM-listed GB Group (GBG) have been strong performers over recent years – commencing 2010 trading at 21p, they currently trade at 94.25p – capitalising the company at more than £100 million. Following a trading update last week, does value remain here?
Imagination Technologies (IMG) is clearly a good company. It is profitable, it is growing its sales rapidly, there is operational gearing and it generates cash and has a net cash position. It ticks all the boxes and is thus loved by investors retail and institutional. But at 523p the company is capitalised at £1.37 billion and on the basis of what is known that share price looks overheated. The shares are a sell.
After many years of scratching around Southern Africa for a project with real prospects AIM listed Boabab (BAO) appears to have found something that could be a winner in the form of the Tete pig iron/vanadium/titanium target in Mozambique. With iron ore stocks all rallying sharply in the past two or three months on the back of hopes of resurgence in Chinese demand, Baobab shares have raced ahead to 35.75p which values this company at £106 million. This is a stock that has now got far ahead of its fundamental value and I can reveal that last week well known bear raider Lucian Miers opened up a short. That is a good call which you should follow.
Earlier this month I advocated a purchase of National Grid (NG.) for dividend yield. This week the company published its interim management statement for the period 1 October 2012 to 28 January 2013. It seems that my reading of the runes were pretty much correct. Regulatory management is shown to be going according to plan and shows no obvious signs of not moving into an expected new dance like embrace of mutual understanding and agreement between the regulator and company for the years following 2013.
I commented previously on London and Australia-listed, Philippines-focused gold producer Medusa Mining (MML) earlier this month. Earlier this week the shares suffered a bit of a setback on the company’s publication of its quarterly activity report (to end December 2012) which has spooked some investors into selling. On balance that is, in my view, a mistake.
The April edition of the UK Investor Show Magazine is live featuring Metal Tiger, BMR, Harley Investments, Action Hotels and much more.
Making money from shares is simple. Well it should be. Buy cheap. Hold. Hold. Hold. Hold, and finally sell when the shares have delivered you big gains. Where so many folks go wrong is getting impatient and not being prepared to hold, hold, hold. Let us tell you about Symphony Environmental (SYM) which we tipped at a 6.75p offer just over three years ago. It did nothing for ages....
This week's contest is graciously sponsored by African Potash, AIM, NEX, Chris Cleverly vehicle that is bound to hit the stratosphere.*
Before I call it a day I want to see the victims of the African Potash (AFPO) fraud get some of their money back, even if some of those victims were fairly beastly to me as I exposed the fraud. Friday's bombshell from Potash shows the game is up but the big frauds happened before this worthless enterprise was booted off AIM. To that end I have been working to help put together a legal action. That action is now almost underway and Peter Petyt, the man running things, wrote to more than 50 victims who have come forward at the weekend. If you lost money and want to try to get it back it is not too late to contact Peter. His letter & contact details follow.
In this video from the storming success that was the 2017 UK Investor Show, Paul Scott finds Nigel Wray's and Paul Mumford's investment strategies. And make sure that you keep April 21 2018 free for next year's UK Investor Show.
Artificial political constructs never last. The EU is great for the “elites” in Brussels; not so much for the average citizen and the tragedy of monetary union is that Europe's political class has gone to extreme lengths to hold the euro together regardless of underlying economic logic. But this has only perpetuated and exacerbated the coming political crisis. "Monetary union has created a conflict between a centralised elite on the one hand, and the forces of democracy at the national level on the other. This is extraordinarily dangerous,” Mervyn King wrote in his recent book 'The End of Alchemy'.
As I flagged up over the weekend, in a desperate attempt to keep the fraud from becoming insolvent, African Potash (AFPO) has proposed a RTO of a company called Onshore Energy Limited, OEL. Lyin' Chris Cleverley Potash's boss is also a director and shareholder on OEL. But it gets worse. Much worse.
I previously wrote on WANdisco (WAND) in January – ‘one quarter does not an investment make, but offers some encouragement for shareholders’. The following updates with the shares currently on the rise on the back of a “Significant customer win and Q1 update” announcement…
Yesterday we wandered through the first page of search results on the OpenCorporates.com website to look at the record of AIM-listed Advanced Oncotherapy (AVO) Executive Chairman Dr Michael Jeffrey Sinclair. There are rather a lot – here comes page 2.
Stanley Gibbons (SGI) has announced it “has sold one of the rarest pieces of Indian Philately to a private collector-investor in Australia for £500,000, the highest price ever paid for a single Indian philatelic item”.
ShareProphets AIM-China Filthy Forty play Taihua (TAIH) announced last Friday that the EGM called to approve the company’s proposed delisting from the AIM Casino had passed the proposals with the requisite majority. The shares are expected to depart the world’s most successful (but perhaps not for Taihua) growth market first thing on 8 May. In the wake of the announcement – at 4.15pm last Friday, bordering on no-one-is-watching o’clock - the shares again nose-dived, registering a new low of 0.1p on the bid yesterday, but all of a sudden the stock is on the rampage this morning. What is going on?
AIM-listed Advanced Oncotherapy (AVO) – teetering on the brink of having to call an EGM to reduce its nominal share capital under the terms of its death-spiral funding package with Bracknor – has announced yet another director share purchase, the fourth just this month (if we ignore the botched 7am RNS of 4 April). As ever, this is just a spoof in order to encourage more buying in the market so as to allow Bracknor to offload more of its death-spiral conversion shares as Advanced hopes and prays for the next £1.235 million tranche of funding before the coffers run dry.
On 12 April 2017, the fraud that is African Potash (AFPO) announced a change of auditors from RSM UK Audit LLP to PKF Littlejohn LLP. One can understand why RSM UK Audit LLP might be keen to cease its relationship with a company with the frankly appalling track record of African Potash but how desperate does PKF Littlejohn LLP look in taking on African Potash as an audit client?
The COT report reveals the large paper short and long positions in silver. Currently it appears to be indicating a small downtrend in the silver market. In this week's Palisade podcast David Morgan discusses how silver markets move and how they can be pushed to the downside once investors run low on cash, as banks will short the market at opportune moments.
Goals Soccer Centres (GOAL) has admitted “preliminary discussions” with key rival Powerleague on “combining the two businesses”, though emphasises that is “but one of the strategic opportunities currently being assessed by the Goals board”…
An announcement from Blancco Technology Group (BLTG) entitled “Q3 Trading Update, Cash Flow Review and Funding”. Hmmm, I’d guess it ain’t gonna be positive…
Truly, there are no winners from the pool of Bulletin Board morons, only those who succeed in making our eyes roll the furthest.
Together Robert Sutherland Smith and Tom Winnifrith have now been working in finance for 71 years - the last ten or so together. Tom wishes to stress that RSS accounts for most of that, the great value investor starting his City career at the Unilever Pension Fund the year before Tom was born. In this book they outline 71 tricks of the trade for making money from shares.
Get the first ShareProphets Pocket Guide ebook, EIS - Buying shares with numerous tax breaks. Want to cut your income tax bill, get loss relief if your AIM listed shares go down, pay no CGT, avoid IHT - EIS could be the way and this book explains how.
Most investment books seem to be large enough to keep the front door open and while some contain gems it is hard to find them amid the verbiage. The aim here is to produce a short guide which simply cuts to the chase. I hope that it will provide food for thought for everyone from beginner to expert but whoever you are it should be quick and easy to read and digest.
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