$RGS.L – Regenersis – good prelims

Electronic equipment repairs company RGS.L (Regenersis) reported its prelims this morning (http://is.gd/r18yO8), sending its shares 3.9% higher to 252p. Clearly, the market likes the results.

Revenues increased 28% to £179.9m, and PBT was £5.7m (2012: £2.1m). Adjusted EPS increased by 21% to 16.80p, ahead of analyst expectations of 15.72p. They report, in their outlook stateent, that “opportunities for global growth, both organically and by acquisition, remain strong”.

John Rosier expands a little bit on these numbers here:

RGS is a very interesting share for me. I picked them up on a share tip by a poster that I respect at about 120p in October 2012. He also recommended SID (Silverdell). I did buy SID, too, at around 13.3p. Discussion on TMF treated SID far more favourably. Unfortunately, SID shares were suspended in July “pending clarification of the Group’s financial position”.

Fortunately for me … and you’re probably not going to believe this, but here goes anyway … I sold the shares in May at 14.3p. I had written in my notebook “appears to be weak”. Although I hadn’t noted it at the time (bad boy!), IIRC there was discussion about the financial position of the company in Feb (?) – it was actually picked up by an analyst. So. Analysts. They know what they’re doing! It was a combination of these factors that led me to sell out before the suspension.

I mention SID because the same poster picked both a good share, and a duff one, and it was the duff one that received the most admiration. There’s a lesson for us there.

Anyway, back to RGS. I sold RGS at the beginning of July for around 203p. I had wanted to tidy up my portfolio, and noted that RGS had stalled. I was also interested in picking up some TW (Taylor Wimpey) at 100.6p.

On 2 Sep, I had a trawl of shares that might be worth buying, and RGS came across my radar. I dismissed it. By an amazing
coincidence, John Rosier mentioned it on his blog. He pointed out the nearness of the results. As soon as I read his post, I knew he was right. I bought some the next day for 207.9p.

My switch from RGS to TW wasn’t a particularly good one – although it wasn’t a particularly bad one, either. I have noted before that good growth companies that are illiquid often track sideways for awhile. So the trick is to learn patience, and look for key dates. it’s expectation of the prelim announcement that suddenly caused the share price to move. The interesting this is, there must have been a lot of investors sitting on the sidelines KNOWING EXACTLY WHAT WAS GOING TO HAPPEN. Crafty beggars! They weren’t going to invest in the shares because they knew they were going to do nothing for awhile. Its profile was raised at the time I happened to buy in, and this seemed to force everybody’s hand. There’s another lesson here: there’s no such thing as an unwatched stock. There are many many people out there who know exactly what position they need to take, and will play their hand to score maximum benefit.

Happy investing to you all.


About mcturra2000

Computer programmer living in Scotland.
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