Small Cap Report (4 Feb) - WGB, CRE, MUR, EGS, SAA, KBC, NXR, IND

Monday, Feb 04 2013 by
14

I'll start with two companies whose shares I hold. Firstly, Walker Greenbank (LON:WGB) which is an up-market wall coverings & furnishings group, which had a market cap of £46.7m last night. The shares are up 8% to 86p this morning, on a very good trading update.

Incidentally, it's worth pointing out that most websites update key information (such as market cap) overnight, so often that won't reflect a sudden increase or decrease in share price during the day. So it's always worth finding the number of shares in issue (which is situated near the bottom left of the StockReport on Stockopedia) and multiplying that by the current share price, to be sure that you are using the very latest market cap after a big move in share price.

Also, if a recent Placing or Rights Issue has taken place, then you should always double-check that the number of shares in issue is correct. If you find an error (which is very rare, but can happen), then flag it up by raising a "green ticket" using the help & feedback button on the right hand side of the page. I recently found a glitch in the data on DP Poland (due to a large recent Placing), flaggged it, and Stockopedia had corrected it, via Reuters who supply the data, within 24 hours.

The key phrase in the WGB trading update (for the year ended 31 Jan 2013) is that, "pre-tax profits will be ahead of the top end of analyst forecasts". This is where the guesswork starts, as of course most investors don't have access to the full range of broker notes. So the only figure I have to work on is the market consensus, which is shown as 8.77p, so perhaps we might be looking at c.9p EPS? That's a big improvement on last yea's 6.7p EPS, so a share price of 87p, giving a PER just under 10, seems pretty reasonable to me. I shall therefore continue to hold these shares, and expect them to continue rising. A price under about 110p looks good value to me. Results are due to be released on 15 April.

Buying into reasonably priced companies which are trading well, is an excellent investing theme at any time, but especially at the moment, where value is becoming harder to find. The market seems to (sometimes)…

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As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


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Walker Greenbank PLC is a United Kingdom-based international luxury interior furnishings company. The Company is a designer, manufacturer and distributor of furnishings, fabrics and wallpapers. The Company manages its operations in two reportable segments: brands and manufacturing. The Brands segment comprises the design, marketing, sales and distribution, and licensing activities of Sanderson, Morris & Co, Harlequin, Zoffany, Anthology and Scion brands operated from the United Kingdom and its foreign subsidiaries in the United States and France. The Manufacturing segment comprises the wallcovering and printed fabric manufacturing businesses operated by Anstey and Standfast respectively. The Company sells in around 85 international markets. It operates through wholly owned subsidiaries in the United States and France and its own sales operations in Holland and Dubai. Its brands are targeted at the mid to upper end of the market. more »

LSE Price
193p
Change
0.8%
Mkt Cap (£m)
115.2
P/E (fwd)
16.6
Yield (fwd)
1.7

Creston PLC is a United Kingdom-based marketing communications company, which delivers a range of digital technology-based marketing solutions to blue-chip clients. The Company operates through two segments: Communications & Insight, and Health. The Company's Communications & Insight division's services include advertising, brand strategy, customer relationship marketing (CRM), digital and direct marketing, local marketing, market research using qualitative and quantitative face-to-face, telephone and online data collection techniques, social media marketing and public relations. The Company's Health division provides an integrated communications solution to the healthcare and pharmaceutical sector and offers services, which include advertising, advocacy, digital and direct marketing, public relations, issues and reputation management and medical education. more »

LSE Price
90.5p
Change
1.7%
Mkt Cap (£m)
52.2
P/E (fwd)
7.4
Yield (fwd)
5.1

Murgitroyd Group PLC is a United Kingdom-based company engaged in providing a range of intellectual property advisory services through its trading subsidiaries Murgitroyd & Company Limited, Murgitroyd SARL and Murgitroyd LLC, which are European patent and trade mark attorneys. Patent services span the sectors of the global economy, including engineering, electronics, chemistry and biotechnology with clients ranging from multi-national corporations to individual inventors, and both in-house and external Patent Attorneys. The practice services include Trade Mark clients from the personal care, clothing, food and drinks, tobacco, pharmaceuticals, chemicals and oil industries together with service sector, sport and entertainment and retail industry clients. Trade Mark services are also provided to other private practice Trade Mark Attorneys. It operates in various geographic markets, including the United Kingdom, the United States, Republic of Ireland, Germany, Japan, China and Canada. more »

LSE Price
545p
Change
 
Mkt Cap (£m)
49.0
P/E (fwd)
14.1
Yield (fwd)
3.1



  Is Walker Greenbank fundamentally strong or weak? Find out More »


4 Comments on this Article show/hide all

Boros10 4th Feb '13 1 of 4
3

Another great piece Paul.

I agree with your comments on e.g solutions. The Company has been treading water for some years now. Profits have been tiny. Also around £1m of software development has been capitalised. Had this been expensed as incurred we might have been seeing small losses. Before today's announcement the valuation at over £15m was just too high given less than £5m of revenues, no growth and little or no earnings.

The strategic partnership with Aspect might be the catalyst for the business to move forward in the US and Asia. It is an important step in the right direction and makes a bit more sense of the valuation. I'd want earnings potential of £1.5m in the next couple of years to justify an investment here but I can't judge whether the Aspect deal will be able to deliver this kind of punch.

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madmix 5th Feb '13 2 of 4
1

Of the shares in my own portfolio, which can be found on the relevant page on my Blog, the ones that are still in buying range for me, are KBC Advanced Technologies (LON:KBC) (big contract win, reasonable valuation against forecast earnings)

Another contract win was mentioned on their website last week :

http://www.kbcat.com/newsflash/newsflash.asp?id=28&Mode=View&articleid=1785&Category=Industry

(31 January 2013) – KBC Advanced Technologies plc ("KBC"), a global provider of software and consulting solutions, today announces that it has signed a contract with TonenGeneral Sekiyu K.K. ("TonenGeneral").

Under this multi-million US dollar contract, KBC will provide a five-year licence for Petro-SIM™, selected SIM models and software services to TonenGeneral. The contract will include initial software implementation services.


FWIW, I bought some on the day of the trading update, and have added more since.

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PhilH 12th Apr '13 3 of 4

Walker Greenbank (LON:WGB) appears to be making some strong moves in the run up to the preliminaries next week.
I've held them since Aug 2011 & I've done well off them doubling up. I've recently sold 50% banking my profit and I'm letting the rest run for now. Be interesting to see how the preliminaries go down!

Professional Services: Sunflower Counselling
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Paul Scott 12th Apr '13 4 of 4

Hi Phil,

I know, am kicking myself for selling my WGB too soon. Was just over-stretched & needed to cut back on a few things. It's a very good company I think, that has traded well in difficult times, so likely to do very well in better economic times.

P.

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About Paul Scott

Paul Scott

Paul trained as an accountant, then spent 8 years as FD for a ladieswear retail chain.He became a professional small caps investor in 2002 to date.Paul writes a small caps report for Stockopedia.com on weekday mornings. He joined Fundamental Asset Management Ltd as a research associate in 2014, as part of their Small Cap Value Portfolio team. more »

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