1pm (LON:OPM)

Share Price 52p  (up 5.1%)

Bid/Offer 50p/ 54p

Market Cap    £37.1 million                             Normal Market Size  2,000

5929a9bf2b41fIpm_sme.jpg

Value Trap/Adventurous/Micro Cap

The Stockopedia rankings above state it all succinctly.  The word value trap resonates with me as I’m a shareholder in 1pm plc for the past two years. I have regularly picked up small lots of shares below 60p. Liquidity issues and the 3p normal spread don't bode well for short-term investors.  The share price has ebbed and flowed around that 60p mark and basically gone nowhere since 2014. 

So maybe 1pm categorised as a value trap is a fair comment from an algorithm.  As regards adventurous, I always fearful when an algorithm says I'm being adventurous with my choice.  What the algorithm probably means but is digitally too polite to say I'm being foolish.  

To avoid repetition here is the link for my 1pm comment April 13th, 2017

Anyway, back to my flawed human analysis to explain the lack of progress in the share price.

  1. The p/e ratio was already too high for many past years in relation to actual earnings per share. 
  2.  The leading to higher/medium risk type businesses concerns investors intently about future bad debts experience.  This could lead to large write-offs
  3.  The improvement in profitability has happened but broadly at the expense of too many shares being issued.  Money raised to finance the acquisitions and additional shares being issued based on performance targets set for management in the acquired companies over a number of years.
  4. The market cap is far too small for some institutions who can pretty much get the same financial coverage with similar companies and with better liquidity.
  5. Exactly as happened before, there is a share placing at a large discount to the share price which dilutes small shareholders.  This will repeat itself again and again until the appropriate scale of operations is built.

Share Chart

5929ab5f82ed61pm_share_price_chart_May_2


The chart does not give much too much grounds for optimism if you are a chartist.

Broker Forecasts

                                                                 31st May 2017                                        31st May 2018


Net ProfitEPSDPSNet ProfitEPSDPS

(£)(p)(p)(£)(p)(p)
Consensus Estimate3.30m5.800.706.30m7.100.90


One Broker Forecast only.  The previous forecast had a higher eps for 2017 at 6.7p.


Share Placing and Open Offer Announcement May 18th, 2017.

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