Small Cap Value Report (11 Aug) - OMI, TTG, FAN

Friday, Aug 11 2017 by
59

Good morning,

Thank to everyone who gave feedback yesterday about the formats of these reports. Paul and I each read all of the comments and we depend on feedback to help understand what works best for you, so your responses are invaluable.

For today, company news looks very quiet at first glance. This is one of those moments when micro news gets overshadowed by macro concerns - house prices, N Korea, etc.

I've been trimming my portfolio a little for reasons which have nothing to do with the attractiveness of the stocks I'm holding, so I'm in the unusual situation where I would prefer the stock market to be high rather than low (as a net seller rather than a net buyer, which I had always been up to this point).

My approach to selling has been the mirror image of my approach to buying: gradually, in small pieces, and with a tendency to cut the weeds while letting the flowers continue to bloom (using the parlance of Warren Buffett).

So I'm trying not to get too caught up in the FTSE and Forex movements from day to day. Besides, the market as a whole has been very kind to us over the past 18 months or so. It seems sort of ungrateful to complain about the 1-2% unfavourable movement here and there, when the 10-20% swings have been favourable!

Anyway, that's enough of a preamble.

Comments will be added here later this morning on:

Or if I've missed something else that you think is worth updating on, please let me know.

Thanks

Graham



Orosur Mining Inc (LON:OMI)

  • Share price: 15.25p (-5%)
  • No. of shares: 100.8 million
  • Market cap: £15 million

Oversubscribed Conditional Subscription

This South American gold miner, dual-listed on AIM and on the TSX in Canada, is something I've kept an eye on ever since I invested in it back in 2013-2014.

Those shares have long since been sold but I like to keep an eye on Orosur's progress all the same.

Most of the readership here probably has scant interest in junior miners, since such stocks often tend to be highly speculative, difficult to analyse, and…

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Disclaimer:  

All my own views. I am not regulated by the FSA. No advice.

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Orosur Mining Inc. (Orosur) is a Canada-based gold producer and exploration company. The Company is focused on identifying and developing mineral opportunities. The Company operates in Uruguay, Chile and Colombia. In Uruguay, the Company operates the San Gregorio gold areas in the northern Department of Rivera. The Company is operating the Arenal Deeps underground mine and several open pits in the San Gregorio district. The Company has land holdings with active near mine and regional exploration programs. The gold is produced in the form of dore, which is shipped to refineries for final processing. In Chile, the Company conducts exploration and development activities on the Anillo property. The Company also owns the Pantanillo property, located in the Maricunga Belt and holds interests in the Talca exploration asset located close to La Serena, north of Santiago in Chile. more »

LSE Price
15.25p
Change
 
Mkt Cap (£m)
14.9
P/E (fwd)
3.7
Yield (fwd)
n/a

TT Electronics plc is a global provider of engineered electronics for performance critical applications. The Company's divisions include Industrial Sensing and Control, Advanced Components and Integrated Manufacturing Services (IMS). The Industrial Sensing and Control division offers position, pressure, temperature, flow and fluid quality sensors for a range of end markets, including industrial automation, industrial process control and medical and aerospace. The Advanced Components division creates engineered electronic components for circuit protection, power management and signal conditioning. The IMS division offers electronic manufacturing solutions to the aerospace and defense, medical and high technology industrial sectors. more »

LSE Price
220.45p
Change
-0.1%
Mkt Cap (£m)
358.6
P/E (fwd)
16.6
Yield (fwd)
2.7

Volution Group plc is a United Kingdom-based company, which is a supplier of ventilation products to the residential and commercial construction markets in the United Kingdom and northern Europe. The Company is principally engaged in designing, manufacturing and distribution of unitary and systems ventilation products and equipment. It is also engaged in the designing, manufacturing and distribution of a range of motors and components for use in air movement applications and gas boilers. It operates in two business segments: Ventilation Group and Original Equipment Manufacturer (OEM (Torin-Sifan)). The Ventilation Group segment consists of 11 brands, focused primarily on the United Kingdom, Swedish, Norwegian, German, Belgian and Dutch ventilation markets. The Torin-Sifan segment is a supplier of motors, motorized impellers, fans and blowers for the European heating, ventilation and air conditioning (HVAC) industry. The Company offers Revive, which is a bathroom and kitchen fan. more »

LSE Price
191.25p
Change
0.7%
Mkt Cap (£m)
377.8
P/E (fwd)
13.2
Yield (fwd)
2.3



  Is Orosur Mining Inc fundamentally strong or weak? Find out More »


70 Comments on this Article show/hide all

Aislabie 11th Aug 51 of 70
10

In reply to Edward Croft, post #45

Ed, I very much feared this might be in the works while I hoped it was not.
A) do you get a lot of complaints from users or just your design team (who have no shares)?
B) where ,( apart from aforesaid designers), do you get the feeling that people want the desktop and tablet to look different? Phones with a small screen might be an argument but as long as IOS and Android for tablets and phones are on one system the only question is do you change to just benefit small screen phones?
C) the response that it is just the "nuisance of changing ones habits and really this is going to be good in the end" is always what's offered. This is condescending partly because it rules out the possibility that it actually is worse. I hear the distant echo of the late great Patrick Hutber's oft-quoted observation that " improvement equals deterioration", which produces the wry smile as we recognize it is so often true.
D) if the people who support this site do not support the change who are you trying to appeal to.?

Maybe I should be optimistic enough to assume you will find something better but year after year sites allow design led ideas to overrule information led layouts.
Don't let them do it

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ragnar danneskjold 11th Aug 52 of 70
6

Regarding the new IC on line format I agree with the comments made by many here. It seems to have been designed by people who know little of investing and now resembles the format of a comic rather than a serious aid to investors, and from the comments here and elsewhere, the help desk seems to have been woefully inadequate.
A note to Ed here. A lifetime in business has taught me that every time you change your front end, whatever that may be, you prompt your customers to look elsewhere, so be kind to your busy and time-poor users who probably will not enjoy spending their time learning to navigate a new format unless the payback is considerable. Having said that, thanks to Paul, Graham and all at Stocko, you save me a great deal of time and the site's worth every penny.
Regards R

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dfs12 11th Aug 53 of 70

In reply to Edward Croft, post #45

Hi Ed,
I look forward to the improvements and especially being able to use the site effectively on phones/tablets. I'm confident that you'll manage the changes with little or no downsides (like you have with the charting facilities). However, I'd be wholly in favour of retaining all ranking metrics as they are at the moment, and adding new ones if you feel any tweaks are necessary. That way we have consistency backwards and forwards. Effectively you have done this before by demoting the importance of the Growth Rank - but keeping it on the site. Also I notice that the new risk ratings were added as new features instead of changing existing functions or metrics. I think this is an excellent approach and is the way to go to upset the fewest number of users possible. I think very few will complain about getting additional functionality or info for free - but you never know!

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Graham Ford 11th Aug 54 of 70
4

I use Stockopedia on an iPad a lot. There are one or two glitches but nothing major and no need for a substantial redesign that I can see. Hopefully, if the format changes there will still be a facility to use the old format if you want in the same way as you can use the old charts if you want. (The new charts are one of the things that are simply too fiddly for the iPad).

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Lion Tamer 11th Aug 55 of 70

In reply to Edward Croft, post #45

Hi Ed

Maybe there is some mileage in allowing users to see a preview site, so we can provide feedback, hopefully in time to influence the final stages of the new site development?

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jonesj 11th Aug 56 of 70
2

I briefly subscribed to IC for about 18 months just over 10 years ago. I found my results were better without it.     

If there are some articles in the print magazine that are relevant, I may buy still it on an ad hoc basis, maybe 5~10 times a year.

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Gromley 12th Aug 57 of 70
10

In reply to barnetpeter, post #46

"So if you were wondering why we generally don't cover junior resource stocks here at the SCVR, hopefully that's a good explanation!"

Yes and its the biggest weakness here imo. Many if not most of the biggest risers over this area in the last 18 months have been resource based and your joint expertise in looking at balance sheets and so on could have identified a lot of star performers and the duds.

Sorry Peter, but I could not disagree more.

It may well be true that there have been many big gains in resource stocks and many more to come, but this is simply not the focus here and I think it is wrong to suggest that you can apply the same analysis approach to these as to the companies focused on here.

To cover these kind of investments here would only lessen the focus and overall quality. I'm totally supportive to the idea that Paul and Graham should keep their focus where they think they can add value. There's no reason a junior resource blog cannot be setup by those that think they have the expertise.


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herbie47 12th Aug 58 of 70
7

In reply to barnetpeter, post #46

I totally disagree. Why should they cover sectors they don't invest in or have little knowledge of for a few members who may want to invest in them, that probably gives you the answer if it's so easy why don't they invest in them. There are probably quite a few of these companies, which come and go. Also do you know how many companies Paul covers? Anyway it's not just about balance sheets in these companies, I think it's more akin to gambling which ones will strike oil or gold etc. I did invest in one Metal Tiger (LON:MTR) for a while, seems good company but just too unpredictable for me. If you want more information on them the bulletin boards are full of it. What have resources got to do with electric cars, driverless trains and the robotic world of the future? Ab Dynamics (LON:ABDP) is covered here. Let's hope Paul and Graham stick to what they know best.

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peterg 12th Aug 59 of 70
3

In reply to herbie47, post #58

Let's hope Paul and Graham stick to what they know best.

Certainly Paul and Graham should stick to what they do well. That doesn't mean that it would not add value to these discussion boards to add some analysis of resources stocks.

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Howard Marx 12th Aug 60 of 70
3

In reply to herbie47, post #58

Agreed Herbie that stocks such as Metal Tiger (LON:MTR) are more like lottery tickets than conservative investments.

As such I guess you need to hold at least five of such stocks in a portfolio - fully aware that four will end up worthless.

I think barnetpeter's point about "electric cars, driverless trains and the robotic world" is relevant though. For example, if all new car/LCV sales will go electric over the next 30 years, that's 90 million more batteries required each year i.e. a lot of cobalt & lithium. In addition, recharging infrastructure investment will demand a lot of copper. Certain resource companies will hence be in a sweet spot.

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herbie47 12th Aug 61 of 70
2

In reply to Howard Marx, post #60

I think you are asking for too much. Paul is struggling covering the companies he reviews already and Graham has already given a reason for not covering junior resource stock.

I do see some connection with certain resources for electric cars, oil demand will no doubt diminish.

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JonBirdy 12th Aug 62 of 70
3

In reply to Edward Croft, post #45

Hi Ed

I only subscribed this year and use Stockopedia on an iPad Pro, PC desktop and an iPhone 6 (i.e. not the biggest smart phone screen available)

I find that a site 'optimised' for a smart phone or tablet can often result in reduced functions and poorer navigation. I hope that does not happen here.

Personally, I prefer organisations offering the same site design, irrespective of how I view it.

Good luck with the developments and thanks for letting us know.

Jon

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Howard Marx 12th Aug 63 of 70
2

In reply to herbie47, post #61

I didnt ask for anything Herbie!

I simply agreed with barnetpeter's point that there will be a significant rise in demand for certain natural resources in the next 30 years as a consequence of electrification of the vehicle fleet.

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Graham N 12th Aug 64 of 70
2

In reply to clarea, post #43

Hi clare,

Strangely enough, I've proven better at managing other people's money than my own - the diversified institutional portfolio which I managed achieved 9.5% annualised over its period under management 2013-2015, strongly beating the FTSE.

My personal portfolio by contrast has only owned a few stocks at a time. It has produced a positive return though it hasn't quite managed to keep up with the FTSE over the last couple of years. It has taught me more than managing the diversified portfolio did, however.

Graham

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Graham N 12th Aug 65 of 70

In reply to Ternheim, post #37

Thank you, I updated the article to reflect this. It's annoying because I had noticed the part of the statement where they were discussing the movement into net cash the first time I read it, but still managed to get the article comment wrong! Cheers anyway.

Graham

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Graham N 12th Aug 66 of 70
2

In reply to peterg, post #59

Hi peter,

I don't mind discussing a resource stock if it is producing (not just exploring) and if it will pay dividends and produce a positive return for long-term holders of the stock, not just a return for people who manage to sell it at a higher price than they bought it at.

It is my view that such stocks are rare but I'm open to tips about which ones they might be.

Thanks v much,

Graham

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Mrken 13th Aug 67 of 70

Message for Mr Crusty (29 March 2017 comment) and others who have a IHT AIM portfolio.

I have just commenced building such a portfolio and have have just started accessing this website. Any advice on building a IHT AIM portfolio would be much appreciated.
Mrken.

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dfs12 14th Aug 68 of 70

In reply to Graham Ford, post #54

I use stockopedia on a lot of android devices (tablets and phones) and there are only a couple of issues there too... zooming in (via pinching) works very erratically (best to get to a part of the screen that has no content) and strangely the new charting doesn't work.

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runthejoules 14th Aug 69 of 70
2

Ed, would it be possible to just generate an early placeholder blog every day, so we users can get chatting even before Paul & Graham start adding to it? I learn a lot from the discussion here.Ta.

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Tanglands 14th Aug 70 of 70

One of the best short and direct explanation as to why to avoid mining stocks and certainly the smaller end of the market. I would probably add smaller oil stocks in their as well!

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 Are Orosur Mining Inc's fundamentals sound as an investment? Find out More »



About Graham N

Graham N

Full-time investor and independent analyst. Prior to this, I spent seven years in the financial markets as an analyst and institutional fund manager. I'm CFA-qualified and hold an audited, FTSE-beating investment track record.  Away from finance, my main interests are recreational poker and everything to do with China, especially Mandarin Chinese. more »

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