BMS, SUR, SAA, TED, RWI, FUM and MCLS
Braemar Shipping Services (LON:BMS) – 400p a share valuation
The leading international shipbroking group employs some 360 people across the globe, operating from 14 offices for both its shipbroking and its financial divisions.
It is enjoying strong trading and is currently operating ahead of management expectations.
Towards the end of next month, we will see the group declare its results for the year to end February.
On Monday of this week Edison Investment Research initiated coverage of the group, which by now you must have realised, is one of my favourites.
Andy Murphy, the Edison analyst, is looking for revenues to have fallen from £111.8m to £101.1m for the last year.
Pre-tax profits, however, could well have ended the year up from £8.1m to £8.7m, worth 20.8p (20.0p) in earnings but with a leap in the dividend from 5.0p to 7.0p per share.
For the current year to end February 2023 he sees £105.2m revenues, a much better £11.5m profit, with earnings leaping to 27.9p and even a 2p lift in dividend to 9.0p per share.
What really encourages me about Edison’s new coverage is that they are valuing the group’s shares at a 45% premium to the current 275p in the market.
So, a 400p valuation tag underlines my continued enthusiasm for the company and its shares.
Could they be a short-term purchase just ahead of the figures to be announced in a few weeks?
Whatever you do as a holder, just stay firm.
(Profile 05.12.19 @ 185p set a Target Price of 250p*)
(Profile 20.05.20 @ 99p set a Target Price of 150p*)
Sureserve Group – building up its forward order book is great business
Last week’s interim results from this social housing energy services group were well received.
However, the group’s shares have not reacted to the upside that I believe is now very evident.
The group is building up its revenue account quite strongly, with its forward order book looking ever more expansive.
Some 96% of this year’s revenue is already covered.
The consensus now for the current year to end September suggests that revenues will increase from £216.5m to £282.5m, with adjusted pre-tax profits of £16.5m, worth some 8.1p per share in earnings.
For the coming year £300m plus is possible, generating £18.5m profits and 8.8p in earnings.
That make the shares at 83.5p look very good value, especially considering its almost continual sales and profits growth.
I was encouraged to see that the group’s recently appointed Chairman has added more shares to his holding, now up at 150,000 shares, following his purchase of 25,000 @ 83.75p each.
Remember that they touched 106p in January, so they could well do that again very soon.
(Profile 14.01.20 @ 36p set a Target Price of 50p*)
M&C Saatchi (LON:SAA) – now ‘game on’ and awaiting Vin’s next move
Vin is playing a great game here – will she go with the Next Fifteen counterbid for the advertising group, in which she controls 22% of its equity?
Will Next Fifteen attempt to swing their £310m cash and shares offer, worth 257p for each Saatchi share, by taking out Vin’s stake with a special deal?
It is quite a synergistic opportunity for Next Fifteen and could well be an extremely profitable one for Vin.
I continue to watch this space with considerable interest, and I also continue to favour her ability.
To date it has proved very profitable for readers who participated in the equity after she declared her initial stake and subsequent moves.
This lady is no fool and I await her next action – she really is talking from massive strength.
Could anyone even come along and pay cash, as opposed to a share swap, for her control?
Just wait and see what happens. The shares are currently 216.5p.
(Profile 11.05.20 @ 64p did not set a Target Price)
Ted Baker (LON:TED) – firm bid proposals now said to be under consideration
I gather that Sycamore Partners, the US private equity group, has now backed out of the bidding war for the lifestyle brand.
However, there are still others with their hand in the game.
After the Sycamore boys made two bids for the company, the brand then put itself up for sale and welcomed bid interest.
Several companies have made revised bid proposals after they stated interest and were then given access to the TED books.
A number are currently under consideration, with Authentic Brands Group being the fancied favourite to win through.
This whole process could well take several weeks yet.
The group’s results for the year to 29 January 2022 together with the Q1 Trading Update should be due tomorrow (26 May).
It is still not certain that any firm proposal will be made, which is probably why the group’s shares, after hitting 156p in mid-April are now treading water at around the 135p level, which is just below Sycamore’s second offer of 137.5p a share.
I still reckon that it is a fair bet that a bid will arrive to satisfy the group’s board and its advisers, at around the 175p/185p range.
(Profile 14.07.21 @ 139p set a Target Price of 175p)
(Profile 22.03.22 @ 124p set a Target Price of 150p*)
Renewi (LON:RWI) – an opportunity not to waste
Yesterday’s announcement of the final results to end March, saw the shares of this leading European waste-to-product business leap 8% to 697p.
Revenues were up 10% to €1.87bn, while its adjusted pre-tax profits were more than doubled from €47.4m to €105.2m, jumping its earnings up from 45.1c to 97.3c per share.
Analyst Colin Smith at Arden Partners continues to recommend the group’s shares as a ‘Buy’ and raised his price objective to 950p a share.
That still makes the group’s shares, at the current price, endure a market rating of under 60% of that of its competitor Biffa.
We have had a wonderful ride in this group’s shares and just a couple of months ago I raised a second Target Price for them at 850p – which on these latest figures alone rates them even higher.
Hold very tight.
(Profile 09.10.20 @ 240p set a Target Price of 350p*)
(Profile 25.03.22 @ 684p set a Target Price of 850p)
Futura Medical (LON:FUM) – its potential showing through again
The deals are beginning to surface, bringing about a rise to market expectations for this innovative sexual health and pain drug delivery technology group.
On Monday the group announced a collaboration with Cooper Consumer Health to commercialise the Futura MED3000 in the UK, the EEA and also in Switzerland.
Under the five-year contract Cooper Consumer Health will distribute the group’s topically applied erectile dysfunction treatment as an over-the-counter product across the European countries.
That means that Cooper will now be paying the launch and marketing expenses, with Futura receiving a big chunk of the ‘economic value’ of each sale.
The group’s NOMAD and broker, Liberum Capital, rates the shares as a ‘Buy’ with a price objective of 104p a share.
Last night the group’s shares closed at around the 31p level.
Since I first profiled the group’s shares, they have been up to over 60.5p, but have since slowly collapsed – with 24p being their recent low occurring just over a month ago.
I still fancy this stock for a revival, with further firmness becoming visible over the next few months.
(Profile 14.03.19 @ 15p did not set a Target Price)
(Profile 22.12.21 @ 34.5p set a Target Price of 50p)
And finally …..
McColl’s Retail Group (LON:MCLS) – boy did I get that wrong
What a totally miserable situation investing in this supermarket operator has proven to be over the last year or so.
Its shares touched 39.5p subsequent to my first Profile on the company but had subsequently fallen away.
By the time that the group realised just how badly it was faring last August, when it launched a fully subscribed £35m Placing @ 20p a share, the rot was setting in, with its shares having fallen from 34.5p the day before.
The price collapse that followed the issue, in which the company boss Jonathan Miller invested £3m cash buying 15m additional shares for his holding, with them almost halving again inside four months.
By that stage they were showing that the group was still having big problems and had become very speculative.
The continuation of its hassles earlier this year, was even more evident, before the group recently went into Administration ahead of Morrisons taking control.
I can only apologise for ever having profiled the company.
(Profile 26.04.21 @ 32.5p set a Target Price of 41p)
(Asterisks * denote that Target Prices have been achieved since Profile publication)