Good morning!
Somero Enterprises Inc (LON:SOM)
(at the time of writing, I hold a long position in this share)
I recorded a fascinating interview yesterday afternoon with the CEO & CFO of Somero Enterprises Inc., listed on AIM since 2006. This is a highly cyclical specialist maker of laser-guided concrete screeding machines, which claims to be (by far) the world leader in this niche. The company is based in the USA, where it does most of its business, but is also expanding into China, and has smaller sales in many other countries.
Why it was particularly interesting to interview this company's management, is for their insights on the economic outlook in USA & China in particular, which I focussed on. I was expecting to hear caution, but not a bit of it! They were very bullish about the economy in America right now, and the pipeline for the next 1-2 years.
With regard to China, their feeling is that the market opportunity there is enormous, and so far they have only scratched the surface, that even in more depressed conditions there is still plenty to go for.
This interview has added to my general sense that things are perhaps not as bad as the markets seem to be thinking. For that reason, I closed nearly all my large cap shorts yesterday, and went long of a basket of US large caps with Stockopedia StockRanks in the high 90's. I'm lucky enough to have the US subscription service here, and it's very helpful to see all the key numbers in a format with which I am familiar. Just one successful trade would easily cover the cost of a subscription - it amazes me how people will cheerfully punt on the markets and lose thousands without a qualm, yet baulk at paying a few hundred quid for quality information sources - false economy if ever I've seen it.
This sanguine view is confirmed by a deluge of trading updates in the UK in recent weeks, most of which seem to have been fine, both in terms of 2015 results, but also outlook. I'm seeing a generally fairly confident tone in the outlook comments that UK small caps are putting out at the moment, with obvious exceptions such as embattled sectors like resources & associated service providers.
Therefore, for what it's worth, I'm more a buyer than a seller at…
