Daily Stock Market Report (Fri 31 Jan 2025) - VNET, TRB, AVON, TUNE, SMIN, BBOX

31st Jan by Graham Neary

50 comments 4899 reads

Good morning! We have a section from Mark on Vianet to kick us off today

1.05pm: I've run out of time, have a fantastic weekend everyone. And thanks for all the constructive feedback in the comments in the last few days - plenty to ruminate on!

Companies Reporting

Name (Mkt Cap)	RNS	Summary	Our view (Author)
Smiths (LON:SMIN) (£6.4bn)	Strategic Update	Focusing on John Crane/Flex-Tek. Other businesses to be divested or demerged. £500m buyback.	AMBER/GREEN (Graham) I like it when companies simplify. Also there is great shareholder orientation on display with the company using its strong balance sheet to enrich shareholders as much as possible.
Tritax Big Box REIT (LON:BBOX) (£3.5bn)	TU	Contracted rent increases by £22.7m. LTV falls to 29%. Enters 2025 with confidence.	AMBER/GREEN (Graham) A pleasant increase in annual contracted rents, coming from both rent reviews and new developments. I don't see anything to dislike and the shares trade at a 20% discount to book value.
James Halstead (LON:JHD) (£736m)	TU	H1 sales are slightly below last year. PBT comparable. Full year PBT expectations are in line.
Avon Technologies (LON:AVON) (£441m)	AGM Statement	In line.	AMBER/RED (Graham) Nothing too objectionable here but shares are already pricing in a good deal of success over the new few years. Has the potential to grow into its market cap.
Alliance Pharma (LON:APH) (£331m)	TU	“The Board continues to anticipate that underlying Group profit in FY 2024 will be in line with FY 2023.”	PINK (Takeover planned at 62.5p).
Focusrite (LON:TUNE) (£123m)	AGM TU	Content Creation division: channel de-stocking in H1, expected H2 weighting. Audio Reproduction: headwinds in a softening market.	AMBER (Graham) Statement fails to indicate the full-year outlook vs. expectations. Superficially offers value. Profit warning risk.
Tribal (LON:TRB) (£84m)	TU	FY24 revenue ahead, adj. EBITDA substantially ahead of exps. Continued ARR growth for FY25.	AMBER/GREEN (Graham) We've been AMBER/GREEN on this before. Looks interesting on valuation against ARR. Overall growth will be held back in short-term but could improve again from 2026.
Maintel Holdings (LON:MAI) (£40m)	TU	Rev £97.9m (below exp?), EBITDA £10.5m “broadly in line”. Outlook: revenue warning for 2025.
Ground Rents Income Fund (LON:GRIO) (£30m)	Response to possible offer	37.5p “materially undervalues” the company. PUSU deadline is 5th Feb, extension not granted.
Oncimmune Holdings (LON:ONC) (£14m)	TU	Revenue warning for FY August 2025. £4m expected. Seeks finance to extend cash runway.

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Mark Carter

31st Jan

AI I've been a long-term sceptic. So, there was a big hoo-haa about DeepSeek recently. For the first time in my life I decided to dip my toe in. I thought I'd share what I discovered.

There's a program called "ollama" that interacts with "models". There are plenty of models out there, one of them being DeepSeek. There's more than one DeepSeek, too. Using ollama it is easy to install many models from many different sources.

I chose "deepseek-r1:1.5b". This involved downloading 1.1GB of data. I'm still trying to figure it all out, but the "b" is important. It tells, in general, how many "parameters" the model uses, assuming I've got that right. So 1.5b means 1.5 billion parameters. More parameters, the better the model will behave, but the bigger it will be in purse disk space (have fun loading a big model!), and the slower it will be.

So I start my adventure in AI by typing "ollama run deepseek-r1:1.5b" on the Linux command line. You can use Windows if you like, but where's the leetness in that? Pfft, n00b.

You get shown a "command prompt", which is a line you can type your question on. A fairly standard question to ask is "why is the sky blue?"

I did that, and it returned "The blue color of the sky is called **turbulence** and is caused by light
scattering off tiny particles in the air. Specifically, sunlight passes ..."

OK, let's ask some investing questions: "What are the best UK stocks to buy right now?" It responded

"As of my last update in July 2024, I don't have real-time data access. For
the most accurate and up-to-date information on which UK stocks to invest
in, please check with financial news websites, stock market apps, or
reliable financial services. They can provide detailed analysis and
rankings based on current market conditions."

You're actually better off asking that sort of question on Grok, on your Twitter account.

I found deepseek to be poor at answering specific technical questions. It goes off at a tangent and misses the point. Better models are likely to produce better results.

I wondered if more tailored models could be created for more tailored problems. There appears to be two mechanisms for doing this: RAG (Retrieval Augmented Generation), and I think the other one is called "custom". "Custom" is easier: on some things you just drag a PDF somewhere and it will use that for the current session only. RAG is more sophisticated, whereby it incorporates the new information into its AI.

At least that's what I can make of things so far. I've literally just had like 30 minutes of playing with it, but I thought it worth telling you guys so you get a gist of things from a potential investment viewpoint.

Hope that helps. If I discover anything more, I'll let you know.

Dragon

I've used models to help with coding. qwen2.5-coder:32b 20GB locally and GPT-4o via duckduckgo. Locally I asked it to provide a python script to get me a list of S&Ptickers into a txt file and the duckduckgo I ask it to provide some python to process a TCPDump and also output from a Wireguard connection to let me know what IP addresses were trying to connect to the Wireguard server. With some tweaks, both scripts are now running.

boringchess

Thanks for taking a look Graham!

PastPerformance

very strong director buying yesterday!

Rusty2

Some interesting views by Paul Scott, regarding trading updates, he is saying, many of them are misleading or inaccurate. You need to check the broker forecasts to see if they tie up. It may explain some of the price movements on the day.

Graham Neary

You're welcome! I prefer exciting chess, though! G

No worries Jeff! and thanks for all the constructive comments that I will be reflecting on. Have a good weekend. Graham

John O' Gaunt

How do I find the monthly Investment Trust discussion thread please?

timarr

RE: Tritax Big Box REIT (LON:BBOX)

Also thanks to Graham (and team) for the coverage both today and previously.

I've ended up as an unwitting shareholder in BBOX after the UKCM takeover last year. But there didn't (and doesn't) seem to be any reason to dislike them so I kept the stock in the vague hope that something interesting would happen.

And lo, something of mild interest has occured (at least to me, it seems to be very interesting to the board): a recent announcement of a large data centre development at Heathrow that effectively short circuits the grid connection problem that's delaying many similar developments:

https://www.stockopedia.com/sh...

They obviously believe that the prime location will be of particular interest to high value clients (well, the hyperscalers, so AI by any other name). With the government's urgent focus on growth it's hard to see the planning on this being rejected - especially as data centres like this have now been designated as critical national infrastructure.

It looks like it will go live in 2027 but it's going to cost BBOX a cool £365 million to develop - although that ought to be manageable, it's about 10% of current market cap.

There's no point in trying to compare this to the US data centre (sorry, center) REITs but for amusement it's worth noting:

Digital Realty Trust (NYQ:DLR) is trading at 2.56 times book value; and
Equinix (NSQ:EQIX) at over 6 times book value.

I haven't spent much time looking at this, so it's not clear to me what the potential value would be, although the company gushes about the "exceptional returns" on offer. Behind the initial development, with an unnamed low carbon energy company, is a pipeline of similar opportunities across the UK.

I've seen too many "transformational" programs (usually code for "we're going to spend a lot of shareholders' money to satisfy the ego of the CEO") to get overly excited about this, but I do approve of the ambition, it looks like a thoroughly sensible development. And it's a lot more interesting than leasing warehouses!

I just went Discuss > All posts, then it was the 2nd post down: https://www.stockopedia.com/co...

doctor dave

Que?

Cool beans. 20G is a bit bigger than I wanted to download, but I did try ChatGPT via duckduckgo. It was actually pretty good at giving a response. Quite neat, actually.

I think what he's saying is that qwen2.5-coder is a model tailored towards programmers. It can answer programming questions.

Amazing! I asked "How do I reverse an array of integers in C?" It actually spat a correct answer. It wasn't quite optimal, but I'd be happy enough with it.

I asked the same question to deepseek. It waffled on a bit - oh how it waffled - but eventually did give me a function that would likely to run a bit faster. It did use a "swap" function, mind, which C doesn't have.

We perhaps shouldn't judge too harshly. ChatGPT is likely to have had a lot of training, and the version of deepseek I used it more generalist and smaller so I was undoubtedly expecting too much.

There is a site called Stack Exchange that provides answers to technical questions such as this. It seems to have been acquired for $1.8b. Having tried ChatGPT and Stack Exchange, I'd say that the latter's business model has just been rendered obsolete. There were a number of problems with it beforehand. Now it's got even more problems.

eParo

Is there a way to see historic p/e ratios (and other ratios if available) from within the Stocko database? Eg I want to know average historic p/e for Fevertree Drinks (LON:FEVR) by year

john2

If you hit the Print tab at the top of the StockReport you will see a series of dates underneath allowing you to see historical data.

Alkmund

I have encountered Tribal at work and was not impressed and subsequently have not invested, or will be investing. I have heard similar from some of those on the ground that have used Sage accountancy software. Experience by those that have to use the product may not necessarily affect profitability, of course. However, I would suspect that long term success is likely to come from generally well received, as well as profitable, products.

Charles Mitchell

Gemini advanced Deep research is pretty good. Deep search is shallow in comparison I find.

WarrantStar

About half way down every stockreport there are five little charts which include historic PE ratio & yield.

Harry Hindsight

2nd Feb

In a tech sector world, real companies doing real things and being stamped on.

James Halstead (LON:JHD) floor coverings - principally 'Polyflor' a product in every social housing bathroom, hospital, office & warehouse.

ER - no not nowadays. It used to be an oil based product 'linoleum' which lasted for 50 years and was anti-microbial - what happened to them - plastic turned up and killed it off?

Polyflor a 'go to' product out there, none other but outside of fund squeezed social housing budgets who will put it into their house over say cheaper wood effect laminates which the DIY'er can do him/her self.

Not DYOR so don't know what else in the toolbox but a Great British company for sure.

Love the tech guys doing their stuff. Grandad - what does this mean - have no clue buy re-insurance companies and gold and learn Mandarin :)

All relies on Data.

Shares to its credit highlighted London Stock Exchange (LON:LSEG) who create and hold the data on our Stockmarket and the Russell Indexes.

Of course they are not alone so Bloomberg and S&P Global are out there and others.

Data 'holders' are also important - the cloud storage and infrastructure guys - this is Alphabet, Amazon, Meta and Microsoft.

Something the PRC covets. Funny DeepSeek turned up close to the Stargate venture announcement. And do not search Tiananmen etc - data censorship, like the old Twitter.

Daily Stock Market Report (Fri 31 Jan 2025) - VNET, TRB, AVON, TUNE, SMIN, BBOX

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Graham Neary

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