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  • Writer's pictureMark Watson-Mitchell

Offering No Apologies, Mears, Wilmington, H&T, Billington, Costain and McBride 




I make no apologies for repeatedly commenting upon certain stocks – they are my favourite stocks because they hit certain of my ‘time-worn’ investment criteria, and I consider that they continue to offer upside potential.


Like life – nothing goes in straight lines – not love, not sex, nor bank accounts and certainly not share prices. 


There are ups and downs all around. 


Although, I have to admit to feelings of guilt when I see the prices of some companies collapsing, especially when I have been almost doggedly promoting them in these columns. 


I only ever base my reactions and comment upon what I gather from news releases, Reports & Accounts, brokers research, and company online information. 


Upon occasions I do get quite agitated when I see tardy actions by companies and their very well-paid advisers in not reacting to market activity, especially when international press and bulletin boards have news in front of the market. 


Just such a case was that of SRT Marine Services (LON:SRT) on Tuesday of last week – which I followed up on Thursday (18th April) – so I will not rant on any further, apart from repeating that based upon broker’s research the shares scream out to me as a real recovery prospect. 


Mears Group (LON:MER) – Peel Hunt Looking For 375p 


Twelve trading days ago, the leading provider of services to the Housing sector in the UK, announced its financial results for the year to end December 2023. 


They showed revenues up 14% to £1.09bn, with a 34% advance in pre-tax profits, taking its earnings up to a 27% better 31.24p, enabling a 24% increase in its dividend to 13.00p per share. 


At that time CEO Lucas Critchley stated that: 


"We are delighted to have delivered strong growth in revenues, profits and cash generation in 2023.  


The Group is recognised as a leading housing specialist, and we continually look to evolve our capabilities to further strengthen our market position.  


The Board believe that the Group is well-positioned for the future and is pleased that the strong trading momentum built in 2023 has continued into 2024."  


In reaction the group’s shares hit a 5-year High at 379.50p. 


Since then, they have been trading down to as low as 347p, before closing last week at 355p. 


I have noted that analyst Andrew Nussey at Peel Hunt has downgraded the group’s shares from ‘add’ to ‘hold’ but he has increased his Price Objective from 350p to 375p on the stock, while considering that the shares were ‘nearing fair value’ and that Mears was a ‘strong proposition but up with events for now.’ 


(Profile 21.06.23 @ 285p set a Target Price of 320p*)  


Wilmington (LON:WIL) – Latest Disposal Boosts Cash By Another €26m 


Employing some 1,000 people and selling to 120 countries across the globe, this group is the recognised knowledge leader and partner of choice for data, information,

education and training in the global Governance, Risk and Compliance (GRC) markets.  


Last Friday morning the company announced that it had sold its French healthcare business for €26m cash – which looks like a good deal considering that the subsidiary had €9.6m of assets and made €2.3m pre-tax profits. 


The cash will really boost Wilmington’s corporate coffers. 


CEO Mark Milner stated that: 


"This sale reflects our continued and active management of our portfolio as we assess the potential of each business to exhibit the six common Wilmington characteristics that we recognise as key drivers of organic revenue growth and profitability improvement." 


Analyst Fiona Orford-Williams at Edison Investment Research has estimates out for the current year to end June this year for revenues of £132.6m (£122.1m), with pre-tax profits of £27.3m (£24.3m), earnings of 22.5p (21.3p) double covering a dividend of 10.8p (10.0p) per share. 


For the coming year she looks for £143.9m sales, £29.6m profits, 24.4p earnings and a dividend of 11.6p per share. 


The sale could have bolstered the company’s bank account to some £60m cash. 

The disposal news pushed the group’s shares up almost 5% to close at 368p, valuing the whole group at £330m. 


The Management now has a big task in utilising its cash in a very accretive acquisition, which may not be too easy in its preferred marketplaces. 


It could be tempting to ‘top-slice’ holdings. 


(Profile 22.06.20 @ 143p set a Target Price of 175p*) 


H&T Group (LON:HAT) – At All-Time High 


Watch the shares of the UK’s largest pawnbroking group moving upwards. 


With its AGM due to be held on Thursday 16th May, we should also be getting a Trading Update giving us guidance for the year in progress. 


The shares hit an All-Time High at 550p last week, before ending at 540p. 


They continue to be a very Strong Hold. 


(Profile 06.07.22 @ 332.5p set a Target Price of 400p*) 

(Profile 30.01.23 @ 429p set a Target Price of 500p*) 


Billington Holdings (LON:BILN) – Massive Cash Balance 


Last Thursday saw this debt-free steel products group’s shares hitting 550p, before easing back by 10p by the end of the week. 


We have been able to ride this upward swing in what I consider remains a cheap stock, with the group still only valued at about £67m. 


Remember its shares are trading on less than 10 times current year earnings and yielding 4.0%, while boasting £22.1m cash in the bank. 


The shares are still cheap and destined to rise further yet. 


(Profile 02.04.19 @ 266p set a Target Price of 314.5p*)  

(Profile 13.06.22 @ 217.5p set a Target Price of 295p*)  


Costain (LON:COST) – Looking Very Cheap 


I like the way the shares of this undervalued infrastructure group have been performing of late. 


Ahead of the AGM on AGM on Thursday 16th May at its Maidenhead HQ, they have been looking fairly strong, closing up another 4% on Friday at 84.20p, valuing the whole business at just £232m. 


On 14th March I stated that the group’s shares had touched 72.45p in response to its 2023 results, before drifting back to an almost unchanged 66p. 


I stated that at that level the then £190m capitalised group’s shares certainly were an undervalued stock, rated at 5.5 times current year price-to-earnings and just 4.9 times its 2025 hopes. 


Last week the shares traded in the 75.80p to 84.60p range, closing just 1p easier at 83.60p. 


They still look very cheap, so hold tight awaiting good news on or before the AGM. 


(Profile 05.09.19 @ 155p set a Target Price of 250p) 

(Profile 02.08.21 @ 55p set a Target Price of 69p*) 

(Profile 24.08.23 @ 50p set a Target Price of 62p*) 


McBride Group (LON:MCB) – More To Go For 


This is another stock that has been on the move this month, with its shares ranging from 97.00p to 123.72p – before closing last week at 110p.50p – which is almost bang in the middle. 


There is more to go for in this stock, keep on holding tight. 


(Profile 10.03.21 @ 79.5p set a Target Price of 99.5p*) 

(Profile 17.07.23 @ 31.15p set a target Price of 38p*) 

 

(Asterisks * denote that Target Prices have been achieved since Profile publication)

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