Good morning!

 

 

Vislink (LON:VLK)

Vislink is a group that I've written about a lot here in the last year, as it has always struck me as being very good value, and still does. My rationale for buying the shares at 30.5p was set out here on 25 Mar 2013, and that remains a good summary of the current investing case.

The shares re-rated to about 50p later last year, but have since slipped back to about 40p (for chartists note that is a 50% retrace, which apparently can be a good point to look at buying, once something has stopped falling anyway). The only reason I can find for the share price weakness is the company's decision to move from a full Listing to AIM. This strikes me as an entirely logical step for a £47m market cap (at 41p per share), acquisitive technology company to take - i.e. it was an anomaly having a full Listing in the first place. However, this move to AIM seemed to spook some private investors, who invented conspiracy theories about management's motives for the change, and will also have probably triggered some Institutions into becoming forced sellers (those whose remit means they are not allowed to hold AIM Listed shares). Some  private investors also have an aversion to AIM, which is understandable, as it is arguably the unregulated Wild West of the investing world - plenty of very good companies are on AIM, but there's a lot of dross too - because wrong-doing is rarely punished, sadly, which attracts wrong 'uns.

Vislink has an ambitious Executive Chairman, John Hawkins, who has been following a strategy of rationalising the existing businesses to make them more profitable, then growth by acquisition (something he's done many times before). The longstanding strategy is to build Vislink into an £80m turnover group, making £8m profit by the end of 2014.

This strategy seemed to be counter-productive with investors, since people seemed to fret over whether the company could achieve this target on time, rather than being pleased with the progress being made to date.

 

Vislink has put its excess cash to work today, with the announcement of a takeover for £14.9m of Surrey-based Pebble Beach Systems, which is a "leading developer and supplier of…

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