Daily Stock Market Report (Mon 6 Jan 2025) - GMS, TRU, HERC, S247

6th Jan by Graham Neary

46 comments 5533 reads

Good morning!

It looks like we are going to have one last day without too much news, before things get back to normal tomorrow.

12:30: all done, see you tomorrow for some more interesting announcements!

Spreadsheet accompanying this report (updated to 3/1/2025).

Companies Reporting

Name (Mkt Cap)	RNS	Summary	Our view (Author)
Gulf Marine Services (LON:GMS) (£164m)	Debt refinancing	Debt refinancing completed, reducing cost of debt & allowing higher dividends.	GREEN (Roland)
Trufin (LON:TRU) (£92m)	TU	FY24 adj PBT expected to be “significantly ahead of market expectations” leading to maiden FY profit of >£0.5m.	AMBER (Roland)
Hercules Site Services (LON:HERC) (£33m)	Strategic Update	Plans to sell “Suction Excavator” business, including its debt, which will raise HERC’s PBT & EPS.	AMBER (Graham)
Smarttech247 (LON:S247) (£10m)	FY update	Results for y/e 31 Jul 24 expected later in Jan. Revenue exps “in excess” €13m, +8%. Adj op profit exps over €750k.	AMBER/RED (Graham)

Summaries

Trufin (LON:TRU) - up 4% to 91p (£96m) - FY trading update - Roland - AMBER

2024 profits are expected to be “significantly ahead of expectations” after a very strong performance from the group’s games business in December. Trufin now expects to report its maiden annual profit one year earlier than planned. I can see attractions in the group’s payment businesses, too. But with management warning that 2025 could be a year of consolidation, I think the share price may be up with events for now.

Hercules Site Services (LON:HERC) - up 2% to 42.9p (£33m) - Strategic Update - Graham - AMBER

I’m upgrading this construction recruitment firm to AMBER as I always appreciate a sensible divestment, and HERC’s proposed disposal of its vehicle rental business sounds reasonable to me. Hopefully we will start to see material profits here before too long, perhaps with the help of some small acquisitions. Existing broker forecasts are for adj. PBT of £1.3m in the current financial year (FY Sep 2025), rising to £1.5m the following year.

Short Sections

Gulf Marine Services (LON:GMS)

15.4p (£164m) (pre-market) - Debt refinancing completed - Roland - GREEN

This offshore support vessel operator completed its debt refinancing on 30 December, as first announced in August. It should be good news for shareholders as debt costs will fall,…

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yiannos1

6th Jan

I study in depth financial statements. All these are irrelevant to me for my investment decisions. I don’t think the FED has an answer to that.

I know that the 3 big credit agencies will at some point downgrade the US debt-I will adjust then. I have 40% now in cash and I will not go below 30% the next two years unless the DOW/S&P correct by 25%.

2025/2026 will be difficult.

All the best

Chris Brown

According to Stockopedia, the top 4 companies in the S&P 500 are on forward P/E ratios of more than 30x currently.

That is Apple (NSQ:AAPL) , NVIDIA (NSQ:NVDA), Amazon.com (NSQ:AMZN) and Microsoft (NSQ:MSFT).

Tesla (NSQ:TSLA) is another mega cap with an even higher valuation.

John Authers' daily email today for Bloomberg had a summary of consensus estimates for 2025. None of the analysts surveyed expect the S&P 500 to decline this year and the average return expectation was 12%. The index has just had two years of >20% returns. I think three consecutive years with double digit returns has only happened once before, in the 1990s.

The S&P 500 could of course have another strong year. But consensus is often wrong and my guess is that it may be flat or slightly down (0% to -10%) in 2025, as the earnings multiples for mega cap stocks cool off a little. There are potential macro headwinds with unemployment data nudging up, yields rising and inflation above target.

I think many value SMID stocks might do better than the main indices in the US. And I'm hoping for a solid return from UK SMID stocks... the FTSE 250 and AIM in particular. Sentiment is quite beaten down on this side of the pond, still, and there is plenty of ground to make up before the old 2021 highs would be reached.

Most UK investors are not familiar with the US multiples-NVIDIA (NSQ:NVDA) trades at the same multiple when it was trading at $3.

US themes for the next 5 years :

Space, eVOTL, Quantum, Robotics, Drones, EV’s/Lidar, Alt Energy.

UK themes for the next 5 years : NHS waiting lists and small boats arrivals (although both can be solved in one day).

PS Yields are rising because of the debt.

Aislabie

The price of Cohort (LON:CHRT) has been walloped for 5.8% drop today which appears to reflect a sale by Liontrust of half its holding , taking it down to 4.8%. Does anyone know if this has been discussed elsewhere, in particular does this throw some doubt on CHRT, which I have viewed as a sound stock opportunity for 2025?

doctor dave

"US debt is of great concern and sooner or later one of the big 3 credit rating agencies will respond." I've also been saying this for a while to an empty room haha. It's got to happen though.

Monty Carlo

7th Jan

Except that the rating agencies are followers rather than predictors - agency analysts need at least some published evidence to back up their rationale for a politically sensitive downgrade, which means market yields reflect the downgrade long before it happens.

US Treasuries have lost 2 of the 3 AAA ratings from the majors already.

Of course if a government's debt ceases to be accepted as liquid collateral, or the repo market freezes up then it is a different story, but what would you rather accept instead of US Treasuries at the moment?

Rhodie Jonners

I like Cohort too and have sat on the sidelines all 2024 because I just thought the price was up with events. Even with the price drop today, I don’t think it’s cheap and I will look for a softer entry point. Of course it could just keep going up and I will miss the boat, but that’s investing life

What’s your point?

Coming from a country and having experienced so many downgrades (not needed).

They hit when everyone is asleep!

Howard Adams

Hi yiannos1

I agree with you US themes. I hold all of those except Lidar (will look into options).

I also think Agentic AI will offer investment opportunities.

As will AI data centre build out (the full supply chain of the sub-sector from chips to water cooling etc ....)

Regards

Howard

Yes ZJK Industrial Co (NAQ:ZJK) was up about 30% yesterday!

You said:

"I know that the 3 big credit agencies will at some point downgrade the US debt-I will adjust then."

My point was that there is absolutely no point in waiting for the ratings agencies before making whatever adjustments you are considering. A certain yield level or spread to comparators perhaps, but the ratings agencies are lagging indicators.

Sovereign ratings are largely ignored or even ridiculed in the bond markets, unless they are emerging markets or there are collateral implications.

I use VIX futures and this was shared in a previous post on another thread -the point of entrance and the point of exit and the 4.5% that was made on the portfolio.

I try to engage with your posts but I find them irrelevant to the discussion. We were discussing about the market and the US debt.

No need to respond again.

All the best

Ref LiDAR .... Innoviz Technologies (NAQ:INVZ) up +32% pre market 07/01/25 14:19 GMT

NVIDIA (NSQ:NVDA) partnership

Innoviz Technologies (NAQ:INVZ)

Surprise surprise!

They were buying those $2 and $2.5 calls yesterday like there was no tomorrow. Well there wasn’t!

8th Jan

To quote your own words from today's comments, "It’s difficult to understand if you have no experience...."!

This comment is under review

No - not a troll, just someone who was there on those dates and lived it in a professional capacity within a major fixed income institution.

I seem to recall there was rather a lot going on, like the threat of a govt shutdown and a game of chicken over the debt limit.

Correlation isn't necessarily causation.

Indeed after the S&P downgrade bond yields actually fell, believe it or not.

Have a read of the ECB's Financial Stability Review from back in Dec 2011:

https://www.ecb.europa.eu/pres...

Personally I had my doubts about extracting too many conclusions from sovereign CDS spreads though - don't assume I agree with all of the analysis.

Monty

I AM GREEK!

Nothing anyone can teach me about spreads government debt and interest rates. The first time the Greek debt was downgraded and the economy collapsed, the debt/GDP was far better than the current US one ratio.

UNFORTUNATELY I have experienced all of them to the max.

You have moved the conversation to something totally irrelevant that I am not interested.

There was a downgrade in the US debt and a 20% correction in 2011. This will happen again and this was the TOPIC of my discussion with other fellow contributors.

Most of your posts are book material that Cambridge University nerds read.

I am not interested so no need to tag me again.

I can remember trading Greek debt points up front.

We gave up on spreads as the numbers got too big...

They were long days, but fascinating days.

By the way - were you aware that Yanis Varoufakis taught at Cambridge in the 1980s and produced some of those nerds?

The IDIOT that wanted to bring back the drachma-this is what I am talking about!

Have a break mate have a Kit Kat!

Someone tells you to stop tagging them but you still go on trying to teach a Greek the Greek history and its FAILED politicians.

Daily Stock Market Report (Mon 6 Jan 2025) - GMS, TRU, HERC, S247

Companies Reporting

Summaries

Short Sections

Gulf Marine Services (LON:GMS)

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Graham Neary

46 comments

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