Good morning! A lot of my small caps seem to be coming alive again, which is encouraging, as the last year has been generally poor for small caps, with most shares drifting down, even if results have been alright. This is quite surprising, as I had expected most investors to sit on their hands until the General Election was decided. Although personally I think it makes so little difference that UK politics can almost be disregarded - a Labour Govt would just spend & borrow a bit more than the Tories, but it's fiddling around the edges of policy really, rather than dramatic differences. Therefore the GE has certainly not stopped me buying shares I like.

Talking of shares I like;

Avesco (LON:AVS)

Share price: 130.5p
No. shares: 19.1m
Market Cap: £24.9m

(at the time of writing I hold a long position in this share)

Trading update - this sounds encouraging;

54f833e638cd9AVS.PNG

My opinion - there has been increasing evidence of the turnaround strategy working, and today's announcement is the strongest yet. This share also has a terrific dividend yield of over 5%, and the balance sheet has considerable hidden value - apparently the freehold property is worth considerably more than book value, I am told.

I've been adding to my position here in recent months, although it's an illiquid small (or even micro) cap, so I've found it best to only buy on red days, and then ask my broker to approach the market makers and try to buy stock for say a penny or two above the bid price. When that is successful, it negates the impact of what would otherwise be a horrible spread. This morning for example, the price is 127 bid, 134p offer, so that's a 5.5% difference - nasty, as that's creating an instant loss.

My target on this? I reckon 150-200p is what this stock could be worth, if the positive newsflow continues. Note that management have been big buyers of stock recently too - a  good sign if it's spontaneous, but not a good sign when it's done for PR reasons after some bad news.

Chartists might like the breakout to a new high this morning, on today's positive trading update;

54f835d0847e7AVS_chart.PNG


Flybe (LON:FLYB)

(at the time of writing I hold a long position in this share)

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