Note to self. Never try and predict what might happen with company share prices from one week to the next. One of my recent blogs entitled "Angle - next week's biggest riser?" has turned out to be a bit of a damp squib.
http://michae1mouse.blogspot.co.uk/2013/10/angle-next-weeks-biggest-riser.html
Whilst I didn't attend yesterday's AGM, bulletin board posters that did attend have reported that the Directors have scotched rumours of any imminent MBO or bid approach. However, progress does appear to be on track with their Parsortix device which could hopefully propel the company into a multi-million pound market cap. in the medium to long term. Fingers crossed, excepting that this is a speculative investment.
I'll refrain from further comment on the Times bid speculation because ultimately I would be extremely pleased if Angle can successfully go it alone. Certainly it would be more lucrative for shareholders in the longer term.
However, before I leave the bid rumour topic alone completely, I'll just say this. In April this year, Verizon Wireless denied any interest in making a joint bid for Vodafone with AT&T, despite press rumours. In essence they were right to deny the rumours, but of course whilst the press didn't get it quite right, in less than a year Vodafone's stake in Verizon has been spun out of the company and back to Verizon and now AT&T are purportedly exploring a possible bid over the rest of Vodafone.
No smoke without fire? Who knows? Anyway, I'll move on. Needless to say I still hold all my shares in Angle.
I found this morning's post by paulypilot a very interesting read where he relates his experience of using too much gearing. A sobering read which is refreshingly honest.
http://www.stockopedia.com/content/small-cap-value-report-1-nov-puri-esch-78727/
As I've mentioned I never use spread bets, but if I had ever entertained the thought then Paul's article would certainly put me off.
He also makes a good point about Director's buying and selling shares in their own companies. I wrote a blog describing my thoughts on this topic in 2011:-
http://michae1mouse.blogspot.co.uk/2011/03/put-your-money-where-your-mouth-is.html
A company where Director's have consistently been purchasing shares in recent months is Regenersis. I have looked at the company several times , but haven't bought the shares. Firstly I prefer to buy very small and micro-cap companies (although not always), but secondly I favour a balance sheet backed by tangible assets. Whilst Regenersis has £39m in net assets, there is £40m of goodwill on the balance sheet.
However, the Directors are clearly bullish and they appear to have good reason to be. From their recent report to end of June 2013, operating profit more than doubled to GBP7.1 million (2012: GBP2.1 million), and operating cash flow more than doubled to GBP9.9 million (2012: GBP4.9 million). Adjusted EPS increased by 21% to 16.80p (2012: 13.85p) and basic EPS increased by 216% to 10.53p (2012: 3.33p).
The short, medium and long term outlook statement is very bullish,
"In June 2011, we set out a strategy to target double digit rates of growth in revenue and profits for the following 2-3 years. We have achieved that. Having invested well, we now believe the opportunity exists to continue to grow annually at double digit rates of growth for the foreseeable future."
Last year the dividend was increased 127% to 2.5p (1.1p in 2012).
The historic p/e ratio (2013) is around 25 and the dividend yield about 1%.
Broker forecasts for 2014 come in at 18.37p (although this is adjusted EPS) giving a forward P/E of 14.
Overall, it's probably fairly valued at this price in my opinion, but it may be of interest for some should the share price take a dip.
As ever, no advice intended or given.
Friday, 1 November 2013
Thursday, 31 October 2013
No news from Angle yet - AGM 2pm today
It's probably just as well that I never use spread bets (as mentioned in my last blog re:Angle). I was anticipating bid news from the company this week, and a sharp rise in the share price. At the very least I thought that a trading update may materialise today. The AGM is scheduled for 2pm. As yet the company have issued nothing, although the day is young!
I suspect that the company may make a bland "we don't comment on market rumours" statement at the AGM if questioned, but it does seem odd that they haven't made an outright rebuttal since it's a very small company and bid rumours aren't normally a daily occurrence for these small caps. Why not just state outright that "the company is aware of the persistent rumours printed in the Times, but can categorically deny that the company is not currently in bid talks". It's not that difficult surely. This isn't Vodafone where rumours of a sale of Verizon Wireless cropped up quite regularly. Although of course they did prove to be well founded in the end.
It will be interesting to see if the days events do shed any light on either bid interest or further developments re: Parsortix.
I certainly haven't changed my view about the bid rumours though, until I hear a flat denial by the company I continue to believe it may just be a matter of time.
Needless to say, I remain a long term holder, and await further developments.
I suspect that the company may make a bland "we don't comment on market rumours" statement at the AGM if questioned, but it does seem odd that they haven't made an outright rebuttal since it's a very small company and bid rumours aren't normally a daily occurrence for these small caps. Why not just state outright that "the company is aware of the persistent rumours printed in the Times, but can categorically deny that the company is not currently in bid talks". It's not that difficult surely. This isn't Vodafone where rumours of a sale of Verizon Wireless cropped up quite regularly. Although of course they did prove to be well founded in the end.
It will be interesting to see if the days events do shed any light on either bid interest or further developments re: Parsortix.
I certainly haven't changed my view about the bid rumours though, until I hear a flat denial by the company I continue to believe it may just be a matter of time.
Needless to say, I remain a long term holder, and await further developments.
Wednesday, 30 October 2013
Servoca - 40% rise today
Servoca Plc describes itself as a leading provider of specialist recruitment solutions to the Education, Healthcare and Criminal Justice sectors. Its Security division offers security services to the public and private sectors.
Today (30th Oct.) it released a trading statement saying, "The Company is pleased to report that results for the year ended 30 September 2013 will be significantly ahead of market expectations and the Board is encouraged by the continued performance of the Group." It goes on to say that, "The September period, which is important for the Group's Education recruitment businesses
, was positive and a marked improvement on the prior year. Trading in the second half and the platform established from our Education activities give the Board confidence on further growth in 2014."
A very positive statement indeed, and as a consequence the shares have risen 40% today in response, valuing the group at £8.2m.
Forecasts for this year came in at 0.3p on revenue of £45m. Looking at performance in 2009 diluted EPS came in at 2.78p. Clearly if they can return to those levels on the back of an improving economy then even after the substantial rise today the shares might look cheap.
The shares have traded as high as 48p/49p, but not for some considerable time. Net assets come in at just over £7m (mostly intangibles). The company has clearly been well under the radar of private investors and needless to say professionals, but it might be an interesting punt for some.
I don't own shares in Servoca, and it doesn't fit my selection criteria, however if economic recovery does take a stronger hold in the next year or two then I'm sure the share price has far farther to climb.
As ever, no advice intended or given.
Today (30th Oct.) it released a trading statement saying, "The Company is pleased to report that results for the year ended 30 September 2013 will be significantly ahead of market expectations and the Board is encouraged by the continued performance of the Group." It goes on to say that, "The September period, which is important for the Group's Education recruitment businesses
, was positive and a marked improvement on the prior year. Trading in the second half and the platform established from our Education activities give the Board confidence on further growth in 2014."A very positive statement indeed, and as a consequence the shares have risen 40% today in response, valuing the group at £8.2m.
Forecasts for this year came in at 0.3p on revenue of £45m. Looking at performance in 2009 diluted EPS came in at 2.78p. Clearly if they can return to those levels on the back of an improving economy then even after the substantial rise today the shares might look cheap.
The shares have traded as high as 48p/49p, but not for some considerable time. Net assets come in at just over £7m (mostly intangibles). The company has clearly been well under the radar of private investors and needless to say professionals, but it might be an interesting punt for some.
I don't own shares in Servoca, and it doesn't fit my selection criteria, however if economic recovery does take a stronger hold in the next year or two then I'm sure the share price has far farther to climb.
As ever, no advice intended or given.
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