For the early risers, LPA Group has got out the blocks quite quickly this morning with an encouraging sounding trading update. I don't really know much about this company apart from the cursory glance I had this morning. It appears they had warned on profits at the half year but have since turned things around and will now be ahead of revised expectations. Medium term prospects look good. The shares don't look particularly cheap to me based on a p/e basis, but the TNAV looks ok. Cash at the half way stage was minimal. Might be one to research further? Shares are up around 20% as I type.
Aeorema which is one of my holdings that I mentioned yesterday has ticked up a little this morning. Goes ex-dividend on Thursday. Very healthy yield.
Avanti Communications which is also one of my investments, albeit speculative has also ticked up a little this morning. It's not been a great investment yet (share price wise), but I am encouraged by their progress and the shares have recently seen good upward momentum.
I shall update the diary as the day progresses with anything of note or that catches my eye.
Had a better look at LPA Group's half-yearly report. It looks plausible that the cash outflow at the half-way stage was a temporary blip. Given the trading statement this morning, and their confidence in maintaining the interim dividend, I suspect that they will return to cash flow positive by year end. Shares are up 30% now and it's certainly an interesting micro-cap. EPS for end of September was predicted to be 1.1p rising to 4.2p next year. Next year's p/e ratio stands at 20 after this mornings rise and the company pays a modest dividend. Could turn out to be a GARP stock, but the price would have to retreat from here to capture my interest.
Monday, 2 November 2015
Sunday, 1 November 2015
For a variety of reasons I'm going to be limiting any comments I make about my investing to this blog from here on in. Also, I'm going to try and use a diary style approach. As ever, the blog is just my thoughts and views about stocks I own or indeed don't own, and it goes without saying that I'm not offering advice to others.
Friday proved an interesting day for one of my more recent investments. The share price of Audioboom rose a near 30% on Friday. A brief comment in the weekend newspapers suggest that bid rumours are circulating. We shall see. Audioboom has been one of those companies that I've blown a bit hot and cold with in the past, but a recent interview with Rob Proctor (Audioboom's CEO) tempted me to take a stake in the company at prices around 4p. On current fundamentals the market cap. looks a little heady, but hey this is the world of social media. A look at recent deals will tell you that in comparison to the market cap. of some, Audioboom potentially looks many times undervalued. If bid rumours are true then this could get very exciting. For me, I 'm certainly going to be holding on tightly.
Returning to Rob Proctor's interview it would appear that revenues will increase exponentially from here. From memory last reported revenues were a laughable £50,000. It's not so funny now though. He has suggested revenues in October and November will amount to £450,000 - £500,000. This apparently is just the tip of the iceberg. His reasoning is more than plausible since the revenues are dependant on listens and not registered users. Listens are certainly climbing massively with the Cumulus deal and there is far more to come. If Audioboom decide to go it alone then they will need to raise more cash to increase their workforce, so putting myself in Rob Proctor's place, if a bid comes at a very significant premium to Friday's closing price (and I'm talking a big multiple of that price) I'd take it. Interesting days, weeks and months ahead. He might wait a little while longer I suppose because the more he shows revenues escalating, the more chance of an even higher price for the company. Speculative yes, but potentially exciting and rewarding.
Trakm8, a long term holding of mine, announced a major North American contract this week. The share price hit new highs. This company will remain a core holding for me for some time to come, Trakm8's revenues have largely been UK generated to this juncture, more traction overseas sounds very attractive. For traders the chart has hit another breakout point.
A more recent investment is in a company called Aeorema. This is a tiny company in the events sector. However, it's profitable with no debt and paying a great dividend (around 8% at Friday's closing price). The shares go ex-dividend next week on 5th November.
Recent results showed a fall in profits and the share price hasn't moved much yet. However, the results were better than they had previously flagged in a trading statement and I am hoping the profit dip was a blip in their growth trajectory. Interestingly the FCF was significantly better than last year's. I'm hoping for long term capital growth and income from this tiddler. Any price weakness may tempt me to top up further.
Friday proved an interesting day for one of my more recent investments. The share price of Audioboom rose a near 30% on Friday. A brief comment in the weekend newspapers suggest that bid rumours are circulating. We shall see. Audioboom has been one of those companies that I've blown a bit hot and cold with in the past, but a recent interview with Rob Proctor (Audioboom's CEO) tempted me to take a stake in the company at prices around 4p. On current fundamentals the market cap. looks a little heady, but hey this is the world of social media. A look at recent deals will tell you that in comparison to the market cap. of some, Audioboom potentially looks many times undervalued. If bid rumours are true then this could get very exciting. For me, I 'm certainly going to be holding on tightly.
Returning to Rob Proctor's interview it would appear that revenues will increase exponentially from here. From memory last reported revenues were a laughable £50,000. It's not so funny now though. He has suggested revenues in October and November will amount to £450,000 - £500,000. This apparently is just the tip of the iceberg. His reasoning is more than plausible since the revenues are dependant on listens and not registered users. Listens are certainly climbing massively with the Cumulus deal and there is far more to come. If Audioboom decide to go it alone then they will need to raise more cash to increase their workforce, so putting myself in Rob Proctor's place, if a bid comes at a very significant premium to Friday's closing price (and I'm talking a big multiple of that price) I'd take it. Interesting days, weeks and months ahead. He might wait a little while longer I suppose because the more he shows revenues escalating, the more chance of an even higher price for the company. Speculative yes, but potentially exciting and rewarding.
Trakm8, a long term holding of mine, announced a major North American contract this week. The share price hit new highs. This company will remain a core holding for me for some time to come, Trakm8's revenues have largely been UK generated to this juncture, more traction overseas sounds very attractive. For traders the chart has hit another breakout point.
A more recent investment is in a company called Aeorema. This is a tiny company in the events sector. However, it's profitable with no debt and paying a great dividend (around 8% at Friday's closing price). The shares go ex-dividend next week on 5th November.
Recent results showed a fall in profits and the share price hasn't moved much yet. However, the results were better than they had previously flagged in a trading statement and I am hoping the profit dip was a blip in their growth trajectory. Interestingly the FCF was significantly better than last year's. I'm hoping for long term capital growth and income from this tiddler. Any price weakness may tempt me to top up further.
Friday, 25 September 2015
Nobody is ever going to get rich by buying into IPOs
In Wednesday's blog, I wrote the following:-
"I would argue that nobody is ever going to get rich by buying into IPOs"
Today a company called Bagir Group, which recently listed on London's Aim market, provided the perfect illustration as to why I avoid IPO's like the plague.
Bagir Group has barely been listed for more than a year. On the first day of dealings the share price stood at over 60p, but quickly lost value. After the release of today's interim results the share price has plunged even further, and currently languishes at 3.75p.
So what exactly has caused today's plunge? In short, losses of over $3m coupled with this trading statement:-
"The Company has made good progress in developing revenues to replace its previous largest customer during the six months to 30 June 2015. However, as noted above, the Company expects the second half of the year to be more difficult than the first half due to competitive pressures and the deferral of sales planned for 2015 into 2016. As a result, the Company expects trading for the second half of the current financial year to be significantly worse than the first half. "
Now using ADVFN's figures the group has a current market cap. of £1.9m. The company describes itself as a designer, creator and provider of innovative formalwear tailoring with it's Head Office based in Israel.
Last reported revenues came in at £97.0m and so ultimately with a £1.9m market cap. it may turn out to be bargain of the century from these levels, and some investors may wish to stick it on their monitors and carry out some further investigation into the company's fundamentals.
Personally, if the recent listing wasn't enough to put me off in the first place then the fact that it's Head Office is overseas certainly would.
I love seeking out and buying interesting micro-cap companies listed on Aim that look good value, but overseas based recent IPO's I wouldn't touch with a barge pole.
Actually, if you had shorted each and every foreign based IPO that listed on Aim you would have made an absolute fortune.
As an aside I often hear investors heavily criticising the Aim market almost as if it's rotten to the core. Of course, it's no such thing. Like any other market there are good, bad and indifferent companies, and if you look hard enough you can find some absolute gems. However, you do have to wonder how on earth so much rubbish appears to have made it onto the market?
"I would argue that nobody is ever going to get rich by buying into IPOs"
Today a company called Bagir Group, which recently listed on London's Aim market, provided the perfect illustration as to why I avoid IPO's like the plague.
Bagir Group has barely been listed for more than a year. On the first day of dealings the share price stood at over 60p, but quickly lost value. After the release of today's interim results the share price has plunged even further, and currently languishes at 3.75p.
So what exactly has caused today's plunge? In short, losses of over $3m coupled with this trading statement:-
"The Company has made good progress in developing revenues to replace its previous largest customer during the six months to 30 June 2015. However, as noted above, the Company expects the second half of the year to be more difficult than the first half due to competitive pressures and the deferral of sales planned for 2015 into 2016. As a result, the Company expects trading for the second half of the current financial year to be significantly worse than the first half. "
Now using ADVFN's figures the group has a current market cap. of £1.9m. The company describes itself as a designer, creator and provider of innovative formalwear tailoring with it's Head Office based in Israel.
Last reported revenues came in at £97.0m and so ultimately with a £1.9m market cap. it may turn out to be bargain of the century from these levels, and some investors may wish to stick it on their monitors and carry out some further investigation into the company's fundamentals.
Personally, if the recent listing wasn't enough to put me off in the first place then the fact that it's Head Office is overseas certainly would.
I love seeking out and buying interesting micro-cap companies listed on Aim that look good value, but overseas based recent IPO's I wouldn't touch with a barge pole.
Actually, if you had shorted each and every foreign based IPO that listed on Aim you would have made an absolute fortune.
As an aside I often hear investors heavily criticising the Aim market almost as if it's rotten to the core. Of course, it's no such thing. Like any other market there are good, bad and indifferent companies, and if you look hard enough you can find some absolute gems. However, you do have to wonder how on earth so much rubbish appears to have made it onto the market?
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