Updates on Belgravium Technologies, Angle and Trakm8

Belgravium Technologies, a company I have mentioned before (see below),

http://michae1mouse.blogspot.co.uk/2013/08/13-rise-for-belgravium-technologies.html

released their trading statement for the full year on Friday, and stated the following:-

"The board of Belgravium Technologies plc is pleased to announce that as anticipated it's trading performance for the second half of the year ended 31 December 2013 has been stronger than the first half and that as a consequence the Directors expect the result for the year, before exceptional costs, to be broadly in line with expectations. Exceptional costs have been incurred principally in relation to the acquisition costs of Feedback Data earlier in the year and in respect of further restructuring undertaken within Feedback and other parts of the group, which the board is confident will bring benefits in 2014.
The results for the year ended 31 December 2013 are expected to be announced on 5 March 2013."

As a long term holder, I'm quite happy with the progress they are making. Certainly the statement held no nasty surprises, and since this is a company committed to paying dividends and which is looking forward to further progress in 2014, I shall continue to hold.

The full year results and outlook statement in early March will make for interesting reading, but with broker forecasts of £9m revenues, 0.35p EPS and 0.1p dividend for this year and just over £10m in revenues next year, 0.6p EPS and a 0.2p dividend, the shares still look cheap. The 2013 P/E ratio will be around 14 dropping to 8.5 in 2014, whilst the dividend yield is predicted to be around 2% this year, jumping to 4% in 2014.

Angle Plc also released their interim results last week. These also held few surprises, but as commented previously they do appear to be making excellent progress with a diagnostic device that could make a major contribution in the fight against various types of cancer, although this is not the only area in which the device has potential applications. From an investment point of view the target market is worth billions, and if Angle are successful then the rewards could be very substantial indeed.

However, this is undoubtedly still a very speculative investment since there is much work to be done before they see meaningful revenues.

The task they face shouldn't be underestimated either. This paragraph from the interims:-

"ANGLE is working to establish the use of Parsortix in clinical practice through identifying key clinical applications with medical utility, securing clinical data that demonstrates the medical utility of those applications in patient trials and obtaining key opinion leader support for the adoption of Parsortix in the routine medical care of cancer patients",

tells us that getting the product to market is quite some task because this not just a case of selling an excellent product into established markets, they've pretty much got to create the market in the first instance.

In the interims it also states that:-  "As we establish each clinical application supported by proven clinical data and key opinion leaders, we would expect sustained revenue growth for that application. We intend to amplify this growth by developing key relationships with major medtech companies and pharmaceutical companies over the same timeframe. We intend to amplify this growth by developing key relationships with major medtech companies and pharmaceutical companies over the same timeframe."

My suspicion is that if this device is as successful as it appears to be then a major medtech company will probably be far more interested in buying Angle lock, stock and barrel rather than some sort of partnership. We shall see. Overall, I am very encouraged by progress here and I would look to buy more shares on any share price weakness.

Finally, Trakm8 released what at first glance looked like a fairly innocuous RNS headed "Grant of Options and sale of treasury shares". It was the sale of treasury shares that caught the eye. Basically, an employee has bought 220,000 shares out of treasury at 46.25p per share i.e. £101,750 worth. Not a bad vote of confidence. Mind you if you bear in mind that Trakm8 is achieving very good growth in an attractive and expanding market, having scaled up with the acquisition of BOX telematics, the current £15m market capitalisation looks very cheap when compared against any number of similar small cap. listed companies.

As ever no advice intended or given, and I am a shareholder in each of the companies mentioned above. Please do your own research.

MS international and Hydro International

Two further companies from the value portfolio.

Firstly, MS international which is already up by 12% since I included it in my January 5th blog.

On first glance this is a company that appears to have been hit by difficult trading conditions in the Defence sector, and a move from the main market to AIM which can cause institutional investors to become forced sellers of the stock.

After a cursory look, the financials do look attractive, and this could prove to be a good recovery stock. At the current share price of 195p, the company is backed by 143p of tangible assets and pays a dividend yield of 4.1%. The current p/e ratio is around 8, and since 1998 they have clearly implemented a progressive dividend policy.

Whilst earnings for the current year will be below expectations, encouragingly they have maintained the interim dividend and the longer term prospects appear quite positive:-

"the structure of the 'Defence' division's order book provides a solid base load of business stretching out to the end of the decade. This means that, despite any current market slackness, the division not only has contracts to be completed within the current year, but also has the positive benefit of a continuous stream of business, scheduled by customers for delivery in each successive year through to 2020."

A recent purchase of the shares by the Finance Director (around £20,000) may give rise to further confidence.

Hydro International (AIM: HYD) describes itself as a leading provider of environmentally sustainable and innovative products for the control and treatment of water.

Dealing with the financials first; it has a market cap. of £16m, a yield of 3.2% and a historic p/e ratio (based on last year's figures) of 9. The net tangible asset value is 50p. Again the dividend policy has been progressive.

Although the interim results were slightly ahead of last years with revenues up 6%, the company states :- "Our view remains, therefore, that both revenue and profitability in 2013 will be materially lower than 2012 levels, and that results for the year will again be weighted significantly to the second half-year." Hence the currently low p/e. As far as I can see there is no indication of their intention on the dividend policy this year.

In November the new Chief Executive announced a Global Leadership Team to drive forward growth. The shares have remained fairly static since earlier in the month.

As ever, no advice intended or given

Market correction and updates

Market's are currently looking a little jittery. There has been plenty of talk in recent months about share prices getting ahead of themselves, and that a Market correction was looking a distinct possibility. Whilst ratings on certain stocks may be a little toppy and suffer a setback, my personal view is that in the long term this Bull market still has considerable legs. Having said that, it does largely depend on the portfolio of stocks that you currently hold. Economic recovery is happening, but it's still in it's early stages (hence the low interest rates), and when it really does build momentum then I expect earnings reporting from many companies to surprise to the upside. Ultimately it's earnings that dictate the share price direction. So far my portfolio has managed to shrug off the current nervousness in markets, and most have issued robust trading statements. If any prices suffer because of general market sentiment then I will see that as an excellent opportunity to increase my holdings.

On this subject, at last week's Avesco GM the share-buy-back, and B/C Share scheme was approved by shareholders, and £1.10 will be returned at the end of this month. The share price dipped on Friday to reflect the return of cash as the shares went ex-dividend. Avesco's shares now trade at £1.25. With a declared dividend of 5p this year, the yield is a generous 4% with a progressive dividend policy in place. To see why I believe that the 2014 dividend could be considerably more generous read below:-

http://michae1mouse.blogspot.co.uk/2013/12/proposed-share-buy-back-and.html

The shares of course trade at a considerable discount to NTAV, and needless to say, I consider the shares to be undervalued.

In other news, another of my holdings Trakm8 released a RNS detailing their biggest ever contract win with  a UK insurance group. Whilst the £1.2m hardware order is significant, the bit I like best is this:- "This hardware order is expected to be followed by a service support contract providing additional and long-term recurring revenues for the Group."

http://uk.advfn.com/news/UKREG/2014/article/60634813

The group boasts a significant percentage of revenues as recurring, and coupled with high margins and good cash generation, Trakm8 remains a very promising long term hold for me. For further details:-

http://michae1mouse.blogspot.co.uk/2013/12/trakm8-interims-and-brief-updates.html

Finally, a mention of my speculative holding in Angle. It's becoming increasingly difficult not to get excited about this company and it's Parsortix product following a string of positive news flow. Following on from the news last year of CE mark approval, they have recently announced the appointment of an eminent Scientific Adviser, Dr Harold Swerdlow and an agreement with the Medical Research Council's Cancer Unit at the University of Cambridge to investigate "several exciting research avenues to test different applications of the Parsortix system in the diagnosis and personalised treatment of cancer."

Angle will release their interim results on Thursday this week (30th January). I don't expect to see much evidence of revenues from sales yet, but I am looking forward to reading about any further progress.

As ever, no advice intended or given.