Good morning.
Proactis Holdings (LON:PHD)
Share price: 92.3p (up 10.5% today)
No. shares: 39.4m
Market cap: £36.4m
(at the time of writing I hold a long position in this company)
Midas article - I don't usually mention share tips, but the Midas column in This Is Money can be very good, and has mentioned some interesting companies in the past, so it's worth looking at. It also tends to cause moves up in share prices, as it's widely read, and people who follow newspaper tips often buy "blind", without DTOR, which of course makes us shudder here at Stockopedia!
Although I suspect most of us probably started out investing by blindly following newspaper and and magazine tips, until you realise that it's a mugs game. Mainly because so many of the stories have been planted by PR companies, eager to get the share prices of their clients up - in advance of a Placing, or to provide liquidity for a major shareholder (or Directors) to sell some shares.
When I last reviewed the figures here on Proactis, in Oct 2014, I couldn't see any appeal. However, I've since changed my mind, whilst still having some concerns about the weak balance sheet.
As the Midas article explains, Proactis is launching a similar product to Tungsten (LON:TUNG) - invoice discounting for e-invoicing, through its established customer base. The major difference between Proactis & Tungsten is that Proactis is already profitable, whereas Tungsten has been a bit of a disaster so far - arguably trying to run before it could walk, and incurring heavy losses, and seemingly increasing difficulty in finding new investors prepared to fund the continuing losses.
The closing comments by Midas are very specific, so clearly the company and its advisers presumably want us to look at the next trading update, indicating via Midas that it will be good;
Proactis’s financial year ended on Friday and a trading statement should be out this week or next with the full results due in the autumn. Analysts expect a 66 per cent increase in sales to £17million and a more than doubling of pre-tax profit from £1.1million to £2.9million. Encouragingly, Proactis pays a dividend, expected to rise from 1.1p last year to 1.2p this.
Midas verdict: Proactis is a fast-growing business and the management is determined to make a success of it. At…
