6-month checkup – March 2013

Time for me to recap of some notes I made in March 2013.

RM – provision of products and services to the United Kingdom and international education markets
74p at the time, now 112p. this crossed my path through Steven Frazer, who noted that the CFO tripled his stake in the company. I completely ignored it, of course, more fool me. It wouldn’t have been all plain-sailing, of course, because the shares hit 64p in July. Pulling up Sharelock Holmes, I see that it is on a PFCF of 3.3, mkt cap of £103m, in the fledgling index. It is on an extremely low EV/Sales value, and shown good momentum lately. On 18 Sep, they reported that net cash had increased to £38.3m on 31 Aug, compared with £13.2m a year earlier.

As I reported last month, I have a tendency to overlook a lot of good shares that people highlight. I must do better!

DXNS – retailer Dixons

I made some bullish comments in my notebook based on a
YouTube video by CEO Sebastion Janes (http://is.gd/Zhy87r) in which he highlighted what he thought were some competitive advantages that Dixons had over Amazon.

Shares are up 41% over 6m, and thankfully I’ve been able to reap the benefits of that.

THT – Thorntons

THT released its Q1 figures today, sending the shares 1.3% higher. Shares are up 41% over 6m, which, again, I’m glad I held. As I have said in the past, I can’t always pick them like this – don’t ask me how my KAZ shares are doing, for example – I’m taking a beating – down 20% since my purchase. But back on topic … Panmure had pencilled in revenues of 220m down the road, and I reckoned that they could make an operating margin of 7.1%. Suppose it is worth 6X EBIT, and I get a FV of about £94m. I estimated that I could get a return of 17%pa “which is OK, but not great”. Given the actual return it showed, I was perhaps being too conservative. Today’s trading statement revealed that their christmas order book for chocolates was good, so I’m happy to hold this share. One thing that isn’t talked about – but I think worth raising – is that Thornton’s increasing emphasis on FCMG will help them with their overseas expansion. We haven’t heard too much about their overseas efforts, but I think it offers some very good free upside to the investment case.

Gervais Williams

I made a note that he like SID (oh dear), AMO, and SIV. The last two turned in a decent performance – but he was clearly wrong-footed over SID. Even the greats can make mistakes

RYA – Ryannair

Cheap-as-Chips airline outfit announced 6m ago that they had put in an order for more planes. Obviously a bullish statement, but the share price has only moved from 6.06p to 6.08p (via nearly 7.5p).

OPTS – Optos

Optical device company Optos issued a profit warning on 20 March, stating that their profits would be half-two weighted, sending the shares down 13% on the day. Paul Scott said they were potentially interesting, which is why I made a note of them – that, plus the fact that I was a former holder. Shares haven’t done particularly well since then, although you would have scored quite well if by some magic you picked up the shares at their low point in June.

RGD – Real Good Food

On the same day, Paul mentioned RGD, saying that they were
uninteresting on account of their high debt and tiny margins. Shares are up 24% since March 21 – i.e. even if you bought after the 13% spike the day before, when a statement was announced – proving that bad companies can sometimes make good investments.

JPR – Johnston Press

Paul called this one right, though. He mentioned overwhelming debt, declining revenues, and thought they had a fair value of 0p. Shares have fallen 13% over the last 6m.

OMI – Orusor Mining

This one was highlighted by Simon Cawkwell at 35.5p as a buy, calling them “insanely low”. They currently trade at 12.85p. Not a great call, then. Sometimes Simon’s calls can be a good contrarian indicator if you can get your timing right. I know, because I have tried.

HSV – Homeserve

On the 23rd, it issued a profit warning, warned that the FSA investigation was still ongoing, sending the shares down about 10% to 200p. Shares now stand at 244p. So the way that a share price reacts to news can send confusing signals about how the shares will perform down the line.

I had written more notes, but I think it’s time to draw this post to a close. I haven’t even begun to talk about the posts that I made publicly, but the short would seem to be: some hits, and some misses.


About mcturra2000

Computer programmer living in Scotland.
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