Small-caps ALU, BAG, BLV, BMS, CAPD, EBQ, ELIX, FTC, INL, i3E, JNEO, JOUL, JNEO, K3C, PMP, SRT, TIDE
Alumasc Group (LON:ALU) – very undervalued, use this cheap-buying opportunity
Yesterday’s announcement of its Interim results to end December last year, apparently disappointed investors.
They took the shares down from 222.5p overnight to just 195p at the worst.
That they closed last night at 217.5p.
At the group’s AGM last October the building products group had already warned that material prices were rising, as well as suffering supply shortages – so why was the reaction so bearish?
I consider that it was overdone and that it gives investors an excellent buying opportunity to load up on an undervalued quality stock that offers an attractive 4.5% yield.
The group’s broker finnCap currently has a price objective of 315p on the shares, which they not only rate as a ‘buy’ but clearly predict significant medium-term upside potential.
For the full year to end June their analyst David Buxton is estimating revenues of £97m, profits of £10.8m, earnings of 23.6p and a 10p dividend per share.
The broker has compared the group’s rating to a dozen other such companies in its sector. It shows a ‘mean’ price-earnings ratio of 16.9 times – compared to the sub-9 times of Alumasc Group.
Both the company and the broker expect a much stronger second half-year, confirming that the group is well in line to meet current expectations.
There was a fairly heavy dealing volume yesterday of almost 200,000, as against the daily average of 32,791 shares traded.
I repeat that this fallback is an excellent piece of timing in taking stock out now.
(Profile 13.02.20 @ 116p set a Target Price of 145p*)
(Profile 08.06.20 @ 80p set a Target Price of 105p*)
AG Barr (LON:BAG) – valued well below others in its peer group
At the start of this month this group declared in its latest Trading Update that the 53-week period to 30 January was now showing strong business and ahead of the levels that it scored pre-Covid.
A 17.5% uplift in revenues to around £267m is expected and that was despite the various lockdowns etc.
What is more I see that margins are likely to be some 15.6%, which is a lot better than the previous 14.8% level.
The finals are expected at the end of next month.
Analysts Darren Shirley and Clive Black, at the house broker Shore Capital, reckon that the Irn Bru maker is a very high-quality business.
For the last year they estimate £41.2m in adjusted pre-tax profits (£32.8m), worth29.5p per share in earnings (22.3p).
This year they go for £278m of sales, £42.6m profits and 30.5p earnings, double covering a 15.3p dividend per share.
Almost 600p a share in early August last year, this ‘fizzy drinks’ group’s equity is now bubbling some 73p lower at 527p.
I see a good amount of recovery prospects to show through over the next year or two and as such I see them going a lot higher in due course, although a return to its early June 2019 level of 970p is some way off yet.
(Profile 31.07.20 @ 444.5p set a Target Price of 525p*)
Belvoir Group (LON:BLV) – letting more to come
After the recent Trading Update for the year to end December 2021 analyst Guy Hewett at brokers finnCap has retained his price objective at 365p a share.
On a £29.6m revenue for the year (£21.7m) he estimates that adjusted pre-tax profits will have leapt by a third from £7.5m to £10.0m, worth 21.3p per share in earnings (16.7p) and triple covering a dividend of 8.5p per share.
It is understandable that the group did well last year, however business must now be stabilising. Hewett goes for current year sales of £29.2m, profits of £8.9m, earnings of 18.8p and an 8.7p dividend per share.
Late last Summer the shares of this property lettings group were trading healthily up at the 326p level.
By the end of January this year they were back to 235p and looking almost friendless.
That was, however, before the recent Trading Update that was very bullish in content.
The shares have responded to scale in ascent to the current 255p.
There is more to come from this group and its shares are attractive in the short-to medium-term.
(Profile 09.01.20 @ 141p set a Target Price of 175p*)
Braemar Shipping Services (LON:BMS) – a slow sail away
Revenues for the current year to the end of this month could see at least a 20% rise to £101m.
That strong performance has been aided by good markets for its shipbroking activities.
Last July the shares of this group hit 323p, easing off to 210p in late November.
That they are now up around the 272.5p level is encouraging.
The recent Trading Update was good news, but obviously not good enough to power in new investors.
That is a shame because I still consider that the shares are well below the valuation levels of its peers, especially the Clarkson group.
More to go for.
(Profile 05.12.19 @ 185p set a Target Price of 250p*)
(Profile 20.05.20 @ 99p set a Target Price of 150p*)
Capital Ltd (LON:CAPD) – looking for a treble
I am still hoping for a ‘hat trick’ with this stock. One of my price objectives has been achieved, but we are still just 6p away from the other two being scored.
In the last few trading days they have even been up at 98p, just 2p below the hit.
That the group is now buying back a chunk of its own equity has been and still is quite helpful – so it may not be too long to wait before I throw my titfer in the air.
It has been a long time coming, so I still wait in anticipation.
(Profile 23.07.19 @ 48p set a Target Price of 76p*)
(Profile 22.10.19 @ 61p set a Target Price of 100p)
(Profile 03.08.20 @ 77.5p set a Target Price of 100p)
Crimson Tide (LON:TIDE) – a point of sale or not
Its 2021 final results are due out in early April.
The recent Update suggested that this group’s aims for the current year remain to reach EBITDA breakeven.
Let us hope so.
A couple of false dawns have helped to see the shares of this company almost hit 4p, that was in September 2020 and then April last year.
That they are now drifting lower at the 2.15p level is not good, despite some more active trading of late.
(Profile 08.10.19 @ 2.8p set a Target Price of 5p)
Ebiquity (LON:EBQ) – research house very positive
Come 25 March this global media consultancy group will declare its final results to end December 2021.
They should be good, well better than the loss of £1.3m in 2020, with £3.8m pre-tax profits anticipated, worth 3.7p in earnings and easily covering a 0.5p dividend per share.
Fiona Orford-Williams at Edison Investment Research is going for the current year to see Revenues rise 10% to £69.3m and taking profits up to £5.3m, generating 4.9p per share in earnings and a 1.3p dividend.
Edison has a 90p per share ‘value’ out on the stock.
This group’s shares hit 62p in late August last year, they are now 59.25p, but still some way from achieving my 75p price objective.
But I have not given up hope.
(Profile 05.11.19 @ 43p set a Target Price of 75p)
(Profile 03.02.21 @ 20.5p set a Target Price of 27p*)
Elixirr International (LON:ELIX) – just the tonic
The challenger consultancy group could well have produced a two-thirds uplift to its adjusted pre-tax profits for 2021 – to £14.6m on a similar rise in revenues at £50.5m.
For the last year earnings could come out at 23.5p per share (16.0p) and amply covering a doubled dividend of 4.1p.
Those figures, due out on 4 April, will have bettered market expectations – which is always a laudable exercise.
For this year nearly £60m in sales, £17.5m profits, earnings of 16p and a 4.7p dividend is estimated.
Brokers finnCap have a price objective out on the shares of 835p.
This group’s shares have tripled in price since my September 2020 Profile on the company. And they have been even higher than the current 680p, having been up to 765p in early January this year.
Still offering good upside.
(Profile 21.09.20 @ 227p set a Target Price of 285p*)
Filtronic (LON:FTC) – homing in?
Yesterday’s half-time results to end November 2021 confirmed that it is firmly in recovery mode.
The advanced radio frequency communications products group is line to see its sales rise from £15.6m to £17.4m in the year to end May, with its pre-tax profits rising eight times from £0.1m to £0.8m for this year, trebling its earnings from 0.14p to 0.40p.
That first half rebound is expected to continue into the second half and beyond.
It will be a steady haul upwards for the profitable and cash positive group.
Its shares closed at 12.25p after touching 13.5p in reaction to the interims.
More to go for.
(Profile 04.02.22 @ 11.6p set a Target Price of 14.5p)
Inland Homes (LON:INL) – the market is not getting the buzz yet, I blame its latent advisers
Considering just how long I have been following this £120m company and respecting the ability of its management, I have to say that I am currently disappointed.
I would question whether their brokers are performing satisfactorily in supporting and presenting the company to their multitude of professional investors.
As too I would suggest that their public relations folks need to pick up their game.
Certainly, I would say that both sets of advisers are apparently lacking commitment, and nowhere near the level of boss Stephen Wicks whose words on digital media totally outstrip those of his overpaid hirelings.
The recently announced results from the company, which were below expectations (but only fractionally), achieved almost nil response in market terms, despite the incredible value the group’s shares offer, they are now just 52.3p compared to a 108p NAV.
To precis those 2021 results they showed record revenue of £181.7m, a profit before tax of £13.2m, while net debt showed a 20.3% reduction to £118.1m. In its partnership housing the group has a forward order book of £164.7m.
Its land portfolio was 10,055 plots, while the group has an estimated gross development value of £3.0bn for its land portfolio. The last year showed homes under construction totalled 1,547, which included 1,257 on behalf of its partners. It recorded 216 private homes sales, if one excludes those of its joint ventures.
I consider that there is still considerable upside in potential considering its current value and just what the group has to offer.
I wonder whether its shares would do better if the group had new advisers?
(Profile 13.08.19 @ 68p set a Target Price of 110p)
(Profile 24.10.19 @ 77p set a Target Price of 110p)
(Profile 29.11.21 @ 46.5p set a Target Price of 60p)
i3 Energy (LON:I3E) – now running on full gas
This little ‘penny stock’ has performed superbly since I profiled the company just two months ago.
That was when they were at 11p, so the recent positive news has had a big impact.
Yesterday the Daily Telegraph ‘Tempus’ column featured the company, taking the shares up to 19.25p at one stage.
At that level they show readers, who went into the stock, a 75% uplift since mid-December.
I am very happy with that performance, but I anticipate that a further upwards climb will ensue.
(Profile 13.12.21 @ 11p set a Target Price of 14p*)
Joules Group (LON:JOUL) – not quite the point-to-point
A bit of a bummer – this one. In fact, a real bummer!
The recent Trading Update indicated below Board expectations in the current period and the shares have reacted downwards.
They were trading near 120p just two weeks ago. But that was before last week’s Update, which knocked them down to only 51p before picking up on some cheap buying, they are now 57.5p.
Liberum Capital analyst Wayne Brown rates the shares as a ‘buy’ at these levels. His price objective is 150p upon trading recovery and margin improvement show through.
It will take time. As I said – a real bummer.
(Profile 19.03.19 @ 282p set a Target Price of 387p)
Journeo (LON:JNEO) – travelling well
They are certainly travelling on the right tracks, this group’s shares at 111p have recently moved more strongly from the late January level of 108p. We saw them hit 138p in late September last year.
Could we see some heightened action in the shares now that the transport information systems group has swapped brokers, now Cenkos Securities.
I rate this little company and consider that its shares will go way above its previous High as investors start to realise just what the group is about.
(Profile 07.04.21 @ 95.5p set a Target Price of 120p*)
K3 Capital Group (LON:K3C) – no need to sell yet
This multi-disciplinary professional advisory services group is pumping away.
For the first half to end November it saw revenues up from £18.0m to £31.2m, with its EBITDA up from £5.8m to £9.4m, lifting its earnings at halfway to 9.4p per share (7.2p).
Analysts Portia Patel and Justin Bates at Canaccord Genuity Capital Markets rate the group’s shares as a ‘buy’ with an aim of 414p, against the current 335p.
For the full year to end May they see £62.1m of sales (£47.2m) and an EBITDA of £18.0m (£15.7m), with earnings of 17.8p (17.4p) and a dividend of 12.1p (9.1p) per share.
As a matter of interest finnCap have a price objective of 477p on the shares.
I have been delighted at the performance of this group’s shares to date, so I see no need for holders to jettison the stock just yet.
(Profile 21.10.20 @ 147.5p set a Target Price of 200p*)
Portmeirion Group (LON:PMP) – buying quality on the cheap
For a pottery group this is a little crack(er). Despite various Covid hassles the company is doing quite well. So too are its shares, currently holding firm at around the 680p level.
Last week’s Capital Markets Day was successful and has, hopefully, continued to show that the group’s shares are truly good value.
Analyst Sahil Shan at Singer Capital Markets rates the shares as a ‘buy’ and has set a price objective of 840p on them.
He is looking for current year adjusted pre-tax profits to rise from £7m to £10m, with earnings liftin up from 40.5p to 57.4p per share and easily covering an almost 50% dividend hike to 19.12p per share.
I await the group’s final results, which will be declared on 17 March.
(Profile 28.08.20 @ 376p set a Target Price of 480p*)
M&C Saatchi (LON:SAA) – stick with Vin
Like a dog with a bone, Vin Murria will not let this one drop. She is determined to cease control of this international advertising group.
From well below the 50p level she was building up a personal holding in the group, details of which I have given readers several times before.
Her quoted vehicle, with cash on board, is now underway with gaining success with its bids for the company.
I like Vin, she is a very sassy lady and extremely capable – I believe that she will win through in due course and then set the group back on a real growth course.
Although I have not set a Target Price for the shares, now 182p, they have been more than three times my original Profile price, having peaked at 210p in early January.
Hold very, very tight.
(Profile 10.05.20 @ 64p set no Target Price)
SRT Marine Systems (LON:SRT) – visibility and outlook improve
By total coincidence, on Monday morning research house Progressive Equity published a very full report on this technology group.
I published a Profile follow-up on the same day.
Their analyst concludes that the group’s
“management has used the dominant position that the company has built in Automatic Identification System (AIS) transceivers to move into the growing global market for Maritime Domain Awareness (MDA) systems.
Although the Transceivers division continued to grow sales, in the Systems division Covid caused delays to winning and, to an extent, delivering contracts.
However, as we move into 2022 SRT is well placed, with its recent £40m contract win suggesting that contracts are once again being signed, and with £85m of MDA business looking to be signed in the next 12-18 months.”
I compliment analyst Ian Robertson upon his note.
It will be more than interesting to see just how well the group and its shares perform over the next year or so.
They are currently trading at 47.75p.
(Profile 14.09.20 @ 39.5p set a Target Price of 50p*)
(Profile 07.02.22 @ 47p set a Target Price of 60p)
(Asterisks * denote that Target Prices have been achieved since Profile publication)