Here's an interesting link for Avesco shareholders:-
http://www.tpimagazine.com/company-profile/1893448/creative_technology_in_profile.html
A very worthwhile an informative read regarding Creative Technology's development in recent years and their current operations.
As a shareholder, I found the whole article very interesting, but a couple of highlights going forward might be :-
"Dimension (also Avesco) has grown steadily over the years. 2012, however, saw a huge increase in both inventory and staff on the back of the company’s involvement in Sports Technology - the joint venture business between CT and Delta, which supplied the majority of the audio and wired comms for the Olympics. “This puts us in a really good place going forward. We have a great team, up to date inventory and you’ll hear more from Dimension going forward,” said Crump.
“Similarly, CT has seen a huge shot in the arm on the back of the Olympics. Our contracts to deliver the video systems for all of the sports venues alongside Ceremonies and several pavilions have allowed us to upgrade and replace much of our inventory at a time when many competitors are struggling for cash and making do with ageing equipment.”
The long forward visibility of the Olympics also allowed the company to focus development of its people resource, adding around 30 full-time positions in the UK, most of which are on-site technical people that have been developed and trained in-house. “Legacy is a massively overused word when applied to Olympics, but I really believe in our case we are a much better equipped and stronger business as a result of the investments we have been able to make on the back of our Olympic contracts,” he continued.""
"Following an impressive run of major ceremonies over the last few years - Doha, Beijing, Delhi and London, Creative Technology’s music and live event work is currently on the increase."
"Further afield, the businesses in Asia and the US are structured in much the same way. In Asia the main operation is in Shanghai and Creative Technology has been active there for around six years and is one of the only Western players to have a real operation on the ground. “It’s been very tough, but we are now really starting to see the fruits of our endeavours. We are well established and are finally seeing a positive financial contribution coming from the region,” said Crump."
“I believe, however, that the real legacy that companies like ours can get from London 2012 is to take what we did and show the world that we really do this well in England. The Australians built an entertainment business on the back of their Olympics and they have given many of us a run for our money over the years. Now is our chance to go out and do the same, not just in Sochi and Rio but also at major events throughout Europe and the rest of the world.”
Avesco should release their interim results in two to three weeks which I am hoping will paint a positive picture going forward. If so, I expect they will further increase the interim dividend. Of course we may get news regarding the Disney settlement. If Avesco get anything near the £1.50 per share payout they are expecting then the current share price is effectively around 70p. At that price a full year dividend around 5p is a yield of 7%, the p/e ratio falls to single digits and the shares will be trading at less than half NTAV(around £1.50).
A growing company with major events in 2014 suggests that Avesco remains considerably undervalued in my opinion.
As ever no advice is intended or given.
As mentioned yesterday given that I can no longer post links on ADVFN, readers will be informed of blog updates via my twitter account:-
https://twitter.com/michae1mouse
Sunday 26 May 2013
Saturday 25 May 2013
FT Weekend - bring back My Portfolio
As I've mentioned in the past, on most weekends I like to pick up a copy of the FT. One of the highlights used to be the My Portfolio section. In particular I liked to read John Lee's column where he talked about the shares he currently held, had bought or sold.
However, not only has John Lee finished, but the whole My Portfolio page now appears to have been axed. What a pity. Whilst I don't ever recall buying any shares mentioned in their columns, it is interesting to read the thoughts of other private investors and hear their investing strategies.
We appear to be left with David Schwartz, a trader. Whilst it's interesting to hear him writing about some of the shares he is trading, over the past few weeks he has simply written a series of uninteresting articles pontificating on the next direction the markets will take. In summary, he's concluded that the markets will go up if they don't go down or if neither of these eventualties take place then the markets will go sideways. Brilliant! Well done, but perhaps instead of all that research into historical data about previous bull and bear markets, their durations etc, he might be better off admitting, just like everybody else, that guessing the future direction of stock markets is not worth the effort, because it nearly always takes you by surprise.
I do hope that in the future the My Portfolio section is re-introduced and that Schwartz gets back to talking about individual companies.
For balance, I might add that a good addition is the introduction of the small cap. section in the main paper.
However, not only has John Lee finished, but the whole My Portfolio page now appears to have been axed. What a pity. Whilst I don't ever recall buying any shares mentioned in their columns, it is interesting to read the thoughts of other private investors and hear their investing strategies.
We appear to be left with David Schwartz, a trader. Whilst it's interesting to hear him writing about some of the shares he is trading, over the past few weeks he has simply written a series of uninteresting articles pontificating on the next direction the markets will take. In summary, he's concluded that the markets will go up if they don't go down or if neither of these eventualties take place then the markets will go sideways. Brilliant! Well done, but perhaps instead of all that research into historical data about previous bull and bear markets, their durations etc, he might be better off admitting, just like everybody else, that guessing the future direction of stock markets is not worth the effort, because it nearly always takes you by surprise.
I do hope that in the future the My Portfolio section is re-introduced and that Schwartz gets back to talking about individual companies.
For balance, I might add that a good addition is the introduction of the small cap. section in the main paper.
How to successfully alienate regular users...well done ADVFN!
It appears that I am unable to post website links on the ADVFN threads. From what I can gather, this isn't a temporary glitch, but a management decision to effectively ban non-subscribers from posting any links at all. Strange decision by the company if true.
I have enjoyed using their boards in the past and hopefully I've written some informative posts and added interesting links. I won't be using their boards in future though. I will continue to write my posts here and readers will be notified via my twitter account at the following link https://twitter.com/michae1mouse.
Rather than blanket banning all non-subscribers from posting links, perhaps they would have been better banning the cretins that spam the boards pumping up some worthless oil company in outer-mongolia or the dreadful idiots that are generally abusive and unpleasant.
Actually, whilst on the subject of ADVFN, they are an excellent illustration of a wildly over-valued company. When I last looked they have a market cap. of around £25m having never made a profit and with a pitiful tangible asset backing of around £0.7m. Even if the company had been listed for just a year or two, and had a great growth story to tell, the valuation would be stretched but ADVFN has been going for about 14 years. They don't appear to be able to make any money even during rampant bull markets.
If anybody truly believes that markets are efficient then just compare the valuations of Densitron, a company I mentioned earlier today, and ADVFN. One is profitable with a solid asset backing and pays a dividend, the other is loss making, has negligible tangible assets, doesn't and has never paid dividends. The former has a market cap. around £4m, the latter has a market cap. closer to £25m. Bizarre!
That doesn't suggest Densitron is under-valued, but let's just say I won't be rushing out to buy any shares in ADVFN.
As ever, no advice given or intended.
I have enjoyed using their boards in the past and hopefully I've written some informative posts and added interesting links. I won't be using their boards in future though. I will continue to write my posts here and readers will be notified via my twitter account at the following link https://twitter.com/michae1mouse.
Rather than blanket banning all non-subscribers from posting links, perhaps they would have been better banning the cretins that spam the boards pumping up some worthless oil company in outer-mongolia or the dreadful idiots that are generally abusive and unpleasant.
Actually, whilst on the subject of ADVFN, they are an excellent illustration of a wildly over-valued company. When I last looked they have a market cap. of around £25m having never made a profit and with a pitiful tangible asset backing of around £0.7m. Even if the company had been listed for just a year or two, and had a great growth story to tell, the valuation would be stretched but ADVFN has been going for about 14 years. They don't appear to be able to make any money even during rampant bull markets.
If anybody truly believes that markets are efficient then just compare the valuations of Densitron, a company I mentioned earlier today, and ADVFN. One is profitable with a solid asset backing and pays a dividend, the other is loss making, has negligible tangible assets, doesn't and has never paid dividends. The former has a market cap. around £4m, the latter has a market cap. closer to £25m. Bizarre!
That doesn't suggest Densitron is under-valued, but let's just say I won't be rushing out to buy any shares in ADVFN.
As ever, no advice given or intended.
Densitron - promising recovery play?
Densitron released their final results this week, a couple of weeks later than normal. Following my last blog, I was pleasantly surprised to read that there were no further nasty surprises given their trading update back in February. In fact the results were pretty much as expected following that particular update.
The headline figures give profit down to £0.6m, EPS at 0.36p, dividends down to 0.3p for the year (50% reduction from last year) but booked orders up by 9% to £23.1m.
Densitron's current market cap. is £4.3m which is supported by £3.2m of net tangible assets and a dividend yield of 4.8%. The company has little debt and £1.6m cash on it's balance sheet. Gross margin decreased from 29.6% to 28.6%.
So what are the pros and cons going forward?
On the negative side there is still a claim against the company in respect of unpaid rents on a property occupied by a former Group Company. It appears that they are trying to negotiate an out of court settlement but are unable to say at what level the settlement will be made.
On this year's earnings the company stands on a p/e of 16 and the dividend has been cut in half. They will pay a final dividend of 0.1p.
The share price has remained around current levels for some time now because, as I said in last week's blog, most of the bad news is already priced in.
Going forward, what are the bull points.
It's always easy to lose perspective. Firstly, Densitron is still profitable and, although current trading is mixed, the business should return to growth with a more favourable global economy and their introduction of internally developed products and additional services.
Their balance sheet is strong and certainly more than supports the current share price, and whilst the dividend has been reduced this year, they have clearly shown a willingnes in the past to return plenty of cash to shareholders when it is prudent.
Finally, they have a 1.25 acre strip of land in Blackheath, South East London which they wish to develop and are making slow but hopefully steady progress in their objective to do so. However, this is unlikely to be concluded this year.
Overall, the outlook statement is cautious (sensibly so following disappointments this year) but hints at optimism, "The pipeline of new business remains strong and we expect to see this being converted into new orders over the next few months."
I shall continue to hold , and would possibly add with any reasonable outcome to the rent claim made against them.
As ever, no advice is intended or given, and the blog remains an individual account of my personal experiences investing in the stock market.
The headline figures give profit down to £0.6m, EPS at 0.36p, dividends down to 0.3p for the year (50% reduction from last year) but booked orders up by 9% to £23.1m.
Densitron's current market cap. is £4.3m which is supported by £3.2m of net tangible assets and a dividend yield of 4.8%. The company has little debt and £1.6m cash on it's balance sheet. Gross margin decreased from 29.6% to 28.6%.
So what are the pros and cons going forward?
On the negative side there is still a claim against the company in respect of unpaid rents on a property occupied by a former Group Company. It appears that they are trying to negotiate an out of court settlement but are unable to say at what level the settlement will be made.
On this year's earnings the company stands on a p/e of 16 and the dividend has been cut in half. They will pay a final dividend of 0.1p.
The share price has remained around current levels for some time now because, as I said in last week's blog, most of the bad news is already priced in.
Going forward, what are the bull points.
It's always easy to lose perspective. Firstly, Densitron is still profitable and, although current trading is mixed, the business should return to growth with a more favourable global economy and their introduction of internally developed products and additional services.
Their balance sheet is strong and certainly more than supports the current share price, and whilst the dividend has been reduced this year, they have clearly shown a willingnes in the past to return plenty of cash to shareholders when it is prudent.
Finally, they have a 1.25 acre strip of land in Blackheath, South East London which they wish to develop and are making slow but hopefully steady progress in their objective to do so. However, this is unlikely to be concluded this year.
Overall, the outlook statement is cautious (sensibly so following disappointments this year) but hints at optimism, "The pipeline of new business remains strong and we expect to see this being converted into new orders over the next few months."
I shall continue to hold , and would possibly add with any reasonable outcome to the rent claim made against them.
As ever, no advice is intended or given, and the blog remains an individual account of my personal experiences investing in the stock market.
Sunday 19 May 2013
Updates - Angle, Densitron, and Avesco
It's been fairly quite on the news front regarding some of my holdings, although in recent weeks Angle, a specialist medtech company, has released some encouraging news. Firstly they have appointed a specialist regulatory company to manage the process of CE mark and FDA approval for their Parsortix cell separation system and their time targets for both CE and FDA approval appear to be running to schedule. The RNS stated:-
"Although ANGLE has not yet started to market Parsortix, there has been a stream of potential users expressing interest in the product, particularly in its harvesting capability. These include major hospitals, leading research groups and several commercial companies. Geographically, interest has come from across the UK as well as several international locations including the US, Canada and Australia."
Last week they followed up this news with further positive developments about Parsortix's harvesting capability stating that :-
"the Company has further extended the operational capability of its Parsortix non-invasive cancer diagnostic product by automating its cell harvesting function."
and
"We have seen widespread demand from researchers and clinicians for CTCs to be made available in a test tube after isolation from blood. It is testimony to the versatility of our separation technology that we have been able to introduce and automate this capability in such a short time. The consequent prospects for our Parsortix sales are significant."
Angle will hopefully be launching this product into a multi-billion dollar market eventually, and this harvesting capability appears to be " a major advantage and a key competitive differentiator".
Whilst not allowing myself to get over excited just yet, the news sounds very positive and I await further developments with interest.
On a separate note, I had hoped that Densitron would have released their final results by now. In the previous two years results were released in the first week of May. This is rarely a good sign given that the previous trading update was disappointing.
However, Densitron already has a significant amount of bad news already priced in, and given that it has a strong balance sheet and negligible debt, I continue to hold.
Finally, Avesco will release their interim results in mid June, and whilst this will be a relatively modest year for the group following last year's bumper Olympic contribution, it's worth remembering that Avesco has done extremely well despite the less than favourable worldwide economic conditions in recent years. This is a cyclical company and if the world economy is now beginning to recover more substantially then Avesco will benefit greatly. Underlying growth should continue, the Disney payout will shortly arrive and next year is an even year with the Football World Cup and Winter Olympics to contribute to revenues. Avesco should continue to prosper, and whilst the exact details of the Disney payout are still unknown, the shares are likely to be on a very undemanding rating post any distribution of the cash.
"Although ANGLE has not yet started to market Parsortix, there has been a stream of potential users expressing interest in the product, particularly in its harvesting capability. These include major hospitals, leading research groups and several commercial companies. Geographically, interest has come from across the UK as well as several international locations including the US, Canada and Australia."
Last week they followed up this news with further positive developments about Parsortix's harvesting capability stating that :-
"the Company has further extended the operational capability of its Parsortix non-invasive cancer diagnostic product by automating its cell harvesting function."
and
"We have seen widespread demand from researchers and clinicians for CTCs to be made available in a test tube after isolation from blood. It is testimony to the versatility of our separation technology that we have been able to introduce and automate this capability in such a short time. The consequent prospects for our Parsortix sales are significant."
Angle will hopefully be launching this product into a multi-billion dollar market eventually, and this harvesting capability appears to be " a major advantage and a key competitive differentiator".
Whilst not allowing myself to get over excited just yet, the news sounds very positive and I await further developments with interest.
On a separate note, I had hoped that Densitron would have released their final results by now. In the previous two years results were released in the first week of May. This is rarely a good sign given that the previous trading update was disappointing.
However, Densitron already has a significant amount of bad news already priced in, and given that it has a strong balance sheet and negligible debt, I continue to hold.
Finally, Avesco will release their interim results in mid June, and whilst this will be a relatively modest year for the group following last year's bumper Olympic contribution, it's worth remembering that Avesco has done extremely well despite the less than favourable worldwide economic conditions in recent years. This is a cyclical company and if the world economy is now beginning to recover more substantially then Avesco will benefit greatly. Underlying growth should continue, the Disney payout will shortly arrive and next year is an even year with the Football World Cup and Winter Olympics to contribute to revenues. Avesco should continue to prosper, and whilst the exact details of the Disney payout are still unknown, the shares are likely to be on a very undemanding rating post any distribution of the cash.
Sunday 12 May 2013
Offer for Datong at 50p
On Friday (10/5/13), having put the company up for sale in February, Datong announced that they had now received an offer for the entire issued shared capital of the company at 50p per share.
At that price I would receive a 31% profit on my share purchases in less than 6 months. So I'm very happy because that's a great return isn't it? No, actually I'm less than happy because whilst my profit is a good return, the offer hugely undervalues this company.
In my previous two articles I did state what I felt were reasonable valuations given the strength of the balance sheet and current trading prospects. The offer values Datong at just £6.92m which is less than £0.5m above Datong's current assets less all it's liabilities. If this was a company in trouble and about to be wound up then £6.92m might be acceptable, but in December they won a lucrative two year contract worth £7.5m and the balance sheet is strong with £2.5m in cash on the balance sheet. The company should see some substantial growth this year and next. In my opinion the valuation at 50p is clearly short-changing shareholders by a considerable margin. See my two previous articles to get, what I think, is a more realistic value.
http://michae1mouse.blogspot.co.uk/2013/02/value-share-heading-for-growth.html
http://michae1mouse.blogspot.co.uk/2013/02/datong-up-for-sale-markets-overheating.html
Heaven only knows how they appear to have come up with this 50p valuation. It looks like it's been plucked out of thin air because it's a nice round number.
As you can gather, I'm not a happy bunny despite making a very decent profit.
Commenting on the Offer, Richard Moon, Chairman of Seven (Technologies) said:
"We are delighted that Datong will be joining Seven". I bet he is at that price.
Currently they have received around 62% in Irrevocable Undertakings to accept the Offer. They will need 90% to complete the deal.
What does really annoy me in these bid situations is that they tend to quote the premium they are paying to the average share price over the past 12 months etc. This is totally irrelevant. The business should be valued based on it's balance sheet, future earnings and prospects not some arbitary value from a depressed share price. In particular shares in micro-cap companies often see large swings in the share price given their relative illiquidity, and the share price often doesn't necessarily reflect it's true worth. That's one reason why micro-caps are attractive to buy for private investors since pricing anomalies are more frequent and these companies rarely appear on the radar of the larger institutions.
Anyway they still need a further 28% of irrevocable undertakings before the offer is completed, and maybe the offer will be improved or another suitor will emerge. Who knows? I will hold until the situation reaches a resolution and then think about where next to invest the profits.
At that price I would receive a 31% profit on my share purchases in less than 6 months. So I'm very happy because that's a great return isn't it? No, actually I'm less than happy because whilst my profit is a good return, the offer hugely undervalues this company.
In my previous two articles I did state what I felt were reasonable valuations given the strength of the balance sheet and current trading prospects. The offer values Datong at just £6.92m which is less than £0.5m above Datong's current assets less all it's liabilities. If this was a company in trouble and about to be wound up then £6.92m might be acceptable, but in December they won a lucrative two year contract worth £7.5m and the balance sheet is strong with £2.5m in cash on the balance sheet. The company should see some substantial growth this year and next. In my opinion the valuation at 50p is clearly short-changing shareholders by a considerable margin. See my two previous articles to get, what I think, is a more realistic value.
http://michae1mouse.blogspot.co.uk/2013/02/value-share-heading-for-growth.html
http://michae1mouse.blogspot.co.uk/2013/02/datong-up-for-sale-markets-overheating.html
Heaven only knows how they appear to have come up with this 50p valuation. It looks like it's been plucked out of thin air because it's a nice round number.
As you can gather, I'm not a happy bunny despite making a very decent profit.
Commenting on the Offer, Richard Moon, Chairman of Seven (Technologies) said:
"We are delighted that Datong will be joining Seven". I bet he is at that price.
Currently they have received around 62% in Irrevocable Undertakings to accept the Offer. They will need 90% to complete the deal.
What does really annoy me in these bid situations is that they tend to quote the premium they are paying to the average share price over the past 12 months etc. This is totally irrelevant. The business should be valued based on it's balance sheet, future earnings and prospects not some arbitary value from a depressed share price. In particular shares in micro-cap companies often see large swings in the share price given their relative illiquidity, and the share price often doesn't necessarily reflect it's true worth. That's one reason why micro-caps are attractive to buy for private investors since pricing anomalies are more frequent and these companies rarely appear on the radar of the larger institutions.
Anyway they still need a further 28% of irrevocable undertakings before the offer is completed, and maybe the offer will be improved or another suitor will emerge. Who knows? I will hold until the situation reaches a resolution and then think about where next to invest the profits.
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