Trakm8 confirms acquisition of BOX

On Friday Trakm8 held a General Meeting and confirmed the acquisition of BOX Telematics. John Watkins, CEO of Trakm8 Holdings PLC, commented:

"We are pleased to welcome the new shareholders who have helped us to complete this transformational transaction. BOX Telematics extends our client base, strengthens our IP ownership model and adds manufacturing capabilities. We look forwarded to delivering enhanced returns for our shareholders and reinforcing our position in the Telematics market."

I like this acquisition, see previous blog:-

http://michae1mouse.blogspot.co.uk/2013/10/trakm8-acquires-box-good-deal.html

With the enlarged share capital, the combined group is valued at just over £9m. I think the current share price will prove to be far too low with a short, medium and long term view. I'm a great fan of the management here who appear to take relatively modest salaries, but stump up plenty of cash to invest in their own shares. In fact to help fund the acquisition the Directors subscribed for £750,000 worth of shares to add to their already considerable holdings. In fact the shares were purchased at a premium to the prevailing price at the time. Not the first time they have done this.

A clear indication of their confidence going forward and their commitment to increasing shareholder value.

In contrast, I noted that Globo, a big favourite on the bulletin boards has also recently made an acquisition and raised a considerable sum through a placing. If the FT weekend is accurate, the Directors have sold £710,000 of shares. Surely that can't be right?

I know nothing about Globo, and haven't looked at its accounts, but I do know it has been targeted by shorters in recent days.

If Directors really have sold a big slug of shares whilst at the same time raising money through a placing then it hardly engenders confidence, and indeed plays right into the hands of the usual suspects.

Anyway, no advice intended or given.

Angle - next week's biggest riser?

I've never used and probably will never use spread bets. Far too risky for me. However, if I was going to use a spread bet then I would be very tempted to take a risk on Angle's SP moving sharply upwards sometime next week. It's not the forthcoming AGM that I think will have a dramatic impact, but the persistent rumours of bid interest that have appeared in the Times. Last week was the second time that the newspaper reported rumours of takeover talk in the region of £2+ per share. In fact they specifically quoted a possible bid at £2.25. It seems inconceivable to me that there isn't any substance to these rumours, and surely it's only a matter of time before they have to come clean.

Long term investors, like me, are probably thinking along the same lines at the moment. That is to say, if anybody is willing to stump up over £2 a share for the company now, then what could it be worth in a year or two's time when the Parsortix device has CE and FDA approval and is being marketed for clinical sales? Sadly, given that the SP currently stands in the low 80s, I expect anybody bidding above £2 i.e. more than a 100% premium, is unlikely to be rebuffed by majority shareholders.

No advice is intended, but brave spread betters might fancy a punt on Angle tomorrow, although depending on what tomorrow brings, they might have already missed their opportunity. I'm not that brave and I'll stick with my long position, but it should be an interesting week.

Avesco should be in contact with shareholders in the not too distant future regarding the details of the special dividend payout (£1.10). Stripping this payment out leaves a current share price of £1.15 or fully diluted market cap. of just under £32m. This is cheap and a healthy discount to tangible net asset value. The Winter Olympics, Football World Cup and Commonwealth games should provide a very healthy boost to earnings during 2014 and, as mentioned many times in the past, this is a cash generative company where I believe dividends will probably rise to around 5p in 2014. Based on a share price of £1.15 (post Disney payout) this equates to a 4.3% dividend.

Also of interest, Avesco appear to have recently invested in new lightweight LED displays which appear to be having a major impact:-

http://www.ct-group.com/news/ct-introduces-worlds-lightest-full-resolution-led-system

"Commenting on the first shows to be completed in the US, Graham Andrews President CT North America and Asia Pacific, commented "The light weight, speed of deployment and image quality of this product has been incredible. We believe it will be a real game changer in how medium resolution LED can be applied to shows from the largest Corporate or Entertainment application to small displays in TV studios etc." "

"Dave Crump, CEO of Creative Technology in Europe and the Middle East added "getting this product to market has been a tough challenge, we have worked closely with the manufacturer to produce a hybrid version of their standard product which offers significant improvements in reliability and functionality, this has been done against some very tight deadlines. We look forward to seeing and sharing the results on some incredible projects in the coming months."

http://www.ct-group.com/news/cts-glux-carbon-10-led-system-redefines-event-environments-use

"CT and its partners already have access to over 1,000m2 of this product which we believe will have a major impact on the touring and live events industry. The ultra lightweight, speed of rigging and low operating cost mean productions with modest budgets can now incorporate spectacular moving screens. "

UBC Media - this week's best performer

The best performer in my portfolio this week was UBC Media, and as reported in the FT yesterday it was also the best performer on the stock market with a share price rise of 96.2%. The current market cap. of UBC is now around £12.5m and it's already been a spectacular performer for me, but I won't be selling. To listen to my reasoning click the audioboo link below:-

https://audioboo.fm/boos/1688042-ubc-media-further-investment-in-audio-boo

As ever, no advice intended or given.