I do enjoy adding my contribution to the stock doubler thread on Advfn at this time of the year, and I'm hopeful that I will continue with the successes I had in 2013 and 2014. In both of these years my selections have more than doubled, although with three more trading days to go I hope I'm not being a little too premature with my 2014 choice. Please note that these are the only two years I have contributed.
In 2013 Angle plc rose by a very healthy 194%, and this year Trakm8 is currently up 105%. Incidentally, I believe that either of these two companies could double again from their current share prices, and indeed I believe that all of my current holdings have this potential. In fact I wouldn't own the shares if I didn't believe that they could multi-bag given a long term horizon.
One of my Christmas presents this year is John Lee's book, "Making a Million Slowly". I like John Lee, he has a very sensible approach to investing that clearly mirrors many of the great stock market investors, all of whom despite their nuances, adhere to the key basic principles of successful investing which I have discussed many times on this blog.
It's an enjoyable read, although I confess that I haven't picked up anything particularly new which is perhaps in itself a comforting thought. One thing that he does point out that is worth remembering though is that investors often try to over complicate the process of stock picking when a few simple ratios and a huge sprinkling of common sense is all that is needed. However, don't mistake that for implying that investing in shares is easy, it still takes considerable time and effort.
Anyway before I lose track of the task in hand, the reason I mention John Lee's book is because my pick this year is a company that I'd guess John Lee would certainly wish to cast his eye over. Firstly, it's profitable, it boasts a rising dividend yield (prospective hike of 20% this year), much improved earnings, it's borrowings are very low and the company is cash generative. EPS is forecast at 0.5p this year (confirmed by a recent trading update) and 0.6p in 2015 which at the current share price implies a forward p/e of 8 falling to 6.5 the year after. The company is on such miserly ratings because this year's figures fall short of market expectations even though the miss appears to be because of a solitary contract which should now fall into the 2015 figures.
This just illustrates market stupidity since the shares have been punished despite the fact that earnings growth will still be 25% ahead of the previous year.
Add in to the mix a recent acquisition that is expected to be "significantly earnings enhancing in the first year" and that they recently turned down a takeover offer from Trakm8, and the valuation becomes even more compelling.
The company in question is Belgravium Technologies currently priced at 4p per share (mid) with a market capitalisation of around £4m. The Group designs, installs and maintains software applications and solutions for the airline, rail, retail and logistics industries, but please visit their website to learn more:- http://www.belgravium-technologies.com/
As with Angle and Trakm8, it should be noted that I do hold shares in this company.
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