Small Cap Report - STAF, NPT

Monday, Jan 07 2013 by
3

Good morning! Here is my usual trawl through the morning's RNSs, looking for the undervalued and overlooked.

Staffline (LON:STAF)

Recruitment/outsourcing group Staffline (STAF) has issued a short & sweet trading statement, saying that 2012 earnings will be in line with market expectations. They reiterate they are, "well placed to continue to capitalise on a number of strategic opportunities that exist across our business", the biggest one of which is the  Govt's welfare to work programme (which could become pretty lucrative for STAF in the next 5 years).

Morningstar shows the broker consensus EPS as 33.6p for 2012, so that puts STAF on a fairly cheap PER of 8.9 times 2012 earnings. There is also a 8.3p forecast divi, giving a yield of 2.8%. So it's no longer amazing value, but certainly good value. However, if EPS grows as forecast to 40p (with a 9.5p divi) then the 2013 forecast PER falls to 7.5, and the yield rises to 3.2%, which is looking a lot more interesting.

STAF has been heavily tipped by the Mail on Sunday, so I suspect that pulled in a lot of the recent buyers, so personally I shall sit this one out, and look to buy back in any significant pullback to say the 260-270p area.

On 4 Sep 2012 I published a report here following a private client broker lunch I attended with Staffline's Directors, and was very impressed. I bought shares at 226p, although have recently sold them at c.300p, in order to recycle the money into something that hasn't yet moved up (Vianet), but looks like it will once the overhang from a large seller is cleared.

Incidentally, I also made Staffline the "share of the month" for Sep 2012 on my sister site, Small Cap Value, which I'm pleased to say is now up & running again after some major IT problems (had to recreate the website from scratch, but have installed proper automatic backups now, so should be fine in future).

NetPlay TV (LON:NPT)

Netplay TV (NPT), the interactive gaming company, puts out a strong Q4 & full year trading statement, indicating that they are confident of exceeding full year market expectations. So that means they should deliver over 1p EPS for 2012, therefore these look potentially good value at 12.2p.

They note that mobile/tablet is a strong area of growth (isn't it everywhere?!).
I'm not terribly keen on gaming companies, as they are essentially preying on people with addictive personalities, so it's not for me. But purely based on the numbers it looks like a potentially interesting growth company.

OK, that's it for today. Not much else to report, other than that my training runs for the Brighton Half Marathon on 17 Feb are going well - am going out 3 or 4 times per week now, and managed about 5 miles last night with relative ease. Thank you to everyone who has sponsored me for either MacMillan cancer care, or the Sussex Beacon charities. The Justgiving link is here if you wish to donate. I'm at 59% of target funds raised so far ...

Also, I'm doing the DryAthlon for Cancer Research, which is to renounce alcohol for the whole of January. People who know me acknowledge that I (harrumph, coughs!) enjoy a drink occasionally, but so far so good. If you fancy sending me a virtual diet coke (for the benefit of Cancer Research), then please click on this different Justgiving link. Thank you to "Ajay" who kindly donated £20, much appreciated!

Have a good week!

Regards, Paul.


Filed Under: Smallcaps,

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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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Staffline Group plc is a holding company. The Company is engaged in the provision of recruitment and outsourced human resource services to industry and services in the welfare to work arena. It has two operating segments: the provision of temporary staff to customers and the provision of welfare to work services. The contractors are supplied to, food growers and manufacturers, logistics and distribution businesses, call centre and administration staff, and many diverse manufacturing businesses producing items from motor vehicles to garden tools. Its brands include Staffline Express; OnSite; Driving Plus, which offers professional drivers; Elpis Training, a national training and consultancy organization; OSP, a recruitment call centre; Techsearch, which supplies graduates, and Select Recruitment Ltd. In July 2014, Staffline Group PLC announced the acquisition of of Softmist Ltd, based in Leicester, which trades as Skillspoint. more »

Share Price (AIM)
812p
Change
-13.5  -1.6%
P/E (fwd)
12.3
Yield (fwd)
1.7
Mkt Cap (£m)
229.1

NetPlay TV plc, along with its subsidiaries, is engaged in providing interactive casino services to customers in the United Kingdom. The Company operates interactive gaming services under an Alderney gaming license, including Supercasino.com and Jackpot247.com. The Company operates in Casino segment, which consists of all online casino products and ancillary income. The Company has operations in British Virgin Islands and United Kingdom. In October 2013, Sportech PLC sold the assets of its United Kingdom facing e-Gaming business, Vernons.com to the Gaming division of NetPlay TV plc, NetPlay TV Group Limited. more »

Share Price (AIM)
8.38p
Change
0.1  1.5%
P/E (fwd)
6.3
Yield (fwd)
7.8
Mkt Cap (£m)
24.5



  Is Staffline fundamentally strong or weak? Find out More »


1 Comment on this Article show/hide all

StrollingMolby 7th Jan '13 1 of 1

I bought shares at 226p, although have recently sold them at c.300p, in order to recycle the money into something that hasn't yet moved up (Vianet), but looks like it will once the overhang from a large seller is cleared.

You must have published this minutes before Vianet (LON:VNET) started moving today, up 15p to 118p, on news that New Solera had reduced to sub-3%.  Thanks for your research posted on this elsewhere, which led me to DMOR and buy at 102.5p on New Year's Eve.  Onwards and upwards from here...

SM

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About Paul Scott

Paul Scott

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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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