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  • Writer's pictureMark Watson-Mitchell

Pawnbroking, Cyber Security And Fast Cars

H&T Group (LON:HAT) – Much Further To Climb Before Getting Anywhere Near Overvalued

Less than three months ago I suggested that this pawnbroking to jewellery sales group could well see its shares spurt in price.

They were then 403.5p, with my view that they were very capable of putting on a spurt above the 500p level, then rise to 550p in due course.

On Monday of last week, they confirmed a ten-day rally in their price, going from 438.40p on the 20th October to hit 502.07p on the 30th October.

That day the trading volume was a healthy 391,243 shares dealt.

By Friday night they had caught their breath somewhat, by slipping back to 473p.

We are not expecting any financial corporate news coming from the company, possibly not until mid-January when it announces its December year-end Trading Update.

As regular readers will already know – I am extremely keen on this group believing that its shares are still really quite undervalued.

At the start of this month analyst Mark Thomas at Hardman & Co Research put out a note with his estimates for this year and the coming two years.

For the period to end 2023 he goes for revenues to rise to £218.47m (£173.94m), helping to boost pre-tax profits from £19.00m to £30.32m, lifting earnings to 52.73p (37.15p), while increasing its dividend to 18.8p (15.0p) per share.

For next year he sees £228.79m revenues, £37.97m profits, 64.74p earnings and a 22.0p dividend per share.

His estimates suggest £244.39m revenues for 2025, £43.61m profits, generating 74.36p earnings per share and paying out a 25.0p dividend.

My view is that this group’s shares are excellent value at 473p, because they are obviously heading a great deal higher before they look anywhere near overvalued.

My suggestion of 550p is certainly not fanciful, due to the profit and earnings estimates.

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

Shearwater Group (LON:SHE) – A ‘Recovery Punt’ Ahead Of Interims

I have not been very successful in highlighting the investment potential of this cybersecurity, advisory and managed security software and services group.

My previous Target Prices have been just too high to be achieved by the company over the last few years, but they have been close.

This award-winning group, serving customers globally across a broad spectrum of industries, provides professional advisory solutions to create a safer online environment for organisations and their end users.

Its differentiated full service offering spans identity and access management and data security, cybersecurity solutions and managed security services, and security governance, risk and compliance.

The company’s growth strategy is focused upon building a scalable group that caters to the entire spectrum of cyber security and managed security needs, through a focused ‘buy and build’ approach.

However, I am now trying my luck for a third time, in front of the Wednesday 22nd November announcement of its Interim Results to end September.

Its 2023 year saw the group ease back on its sales from £35.9m to just £26.7m and fall into an adjusted pre-tax loss of £1.3m (£3.0m profit).

This trading year could well see the £8.5m capitalised group show some recovery in its fortunes.

Analyst Edward Stacey at Cavendish Capital has pencilled in revenues of £32.5m for the current year to end March, showing £1.0m profits, worth 4.2p in earnings per share.

For next year he sees £36.7m sales, £1.7m profits and 7.1p per share in earnings.

If those estimates don’t inspire you enough to jump into the shares, then consider Stacey’s end year cash estimates for the group of £5.0m by March 2024 and £7.1m for end March 2025.

At the current 35p a share in the market, hoping for 8.3 times current year price-to-earnings, then a mere 4.9 times the coming year prospective, backed by cash of £5.0m against a current £8.5m market value – punters should have a quick thrash at this group’s shares in front of the figures.

I am now fixing a new Target Price of 45p for the group’s shares.

(Profile 14.04.20 @ 245p set a Target Price of 310p)

(Profile 23.03.22 @ 118p set a Target Price of 145p)

Aston Martin Lagonda Global Holdings (LON:AML) – ‘Insiders’ Are Understandably Buying More

I was actually very pleased with the contents of the Q3 results statement from this luxury car maker.

The market took advantage of the group’s Management guidance in pulling back its 2023 volume estimate from 7,000 units to 6,700.

It slashed the share price down to 176.5p at one stage, which was 42.3p off the overnight price, on the back of some 4.69m shares being traded after the results.

However, it is apparent that those who were spooked by the statement may well have overlooked the fact that the group’s performance guidance for the year remained unchanged.

The most important fact that I latched on to was that the average selling price of the group’s Core & Specials vehicles was up from £211,000 last year to a much healthier £234,000.

I also really got a buzz out of the way that several of the group’s directors strode into the market late last week to add to their holdings – I just love ‘insider dealings’ when they get stuck into more stock in their companies.

The group’s shares closed at 212p on Friday night following around 1.93m shares traded.

My views on the group and its prospects, its potential and its future share price movement have not changed.

Hold very tight.

(Profile 10.05.23 @ 213.5p set a Target Price of 265p*)

(Profile 30.10.23 @ 213p set a Target Price of 275p)

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


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