Daily Stock Market Report (Tue 5 Nov 2024) - SNWS, ASC, TCAP, SDR, VOD, MGAM

5th Nov '24 by Graham Neary

160 comments 12065 reads

Good morning and welcome to the Daily Stock Market Report! This is the new name for our daily report, previously known as the Small Cap Value Report. Don’t worry, we’ll still be covering all the small company stories that matter to you. But we’re also aiming to expand the breadth of our coverage - you can read more about the incoming upgrades to our content and analysis here.

This morning we have Graham, Megan and Roland helping to cover today’s news.

Graham writes: we're hanging up our collective pen now (2pm). Thanks for reading!

Explanatory notes

A quick reminder that we don’t recommend any shares. We aim to review trading updates & results of the day and offer our opinions on them as possible candidates for further research if they interest you. Our opinions will sometimes turn out to be right, and sometimes wrong, because it's anybody's guess what direction market sentiment will take & nobody can predict the future with certainty. We are analysing the company fundamentals, not trying to predict market sentiment.

We stick to companies that have issued news on the day, with market caps (usually) between £10m and £1bn. We usually avoid the smallest, and most speculative companies, and also avoid a few specialist sectors (e.g. natural resources, pharma/biotech, investment cos). Although if something is newsworthy and interesting, we'll try to comment on it. Please bear in mind the "list of companies reporting" is precisely that - it's not a to do list. We typically cover c.5 companies per day, with a particular emphasis on under/over expectations updates, and we follow the "most viewed" list of readers, so if you're collectively interested in a company, we'll try to cover it. Obviously with the resources available, we can't cover everything! Add you own comments if you see something interesting, and feel free to discuss anything shares-related in the comments.

A key assumption is that readers DYOR (do your own research), and make your own investment decisions. Reader comments are welcomed - please be civil, rational, and include the company name/ticker, otherwise people won't necessarily know what company you are referring to, if they are using unthreaded viewing of comments.

What does our colour-coding mean? Will it guarantee instant, easy riches? Sadly not! Share prices move up or down for many reasons, and can often detach from the company fundamentals.…

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jamesalastair

5th Nov '24

Our other Paul is an emerging talent as well, and the folks that used to work in fund management and I would also give a shout out to our resident entrepreneurs like PlanetX and the folks that have sat on the Boards of major companies.

sparklyone

Planetx - is as always "considerably richer than yauuughw"

Dairy Farmer

I am so sorry to see that Paul has left Stockopedia. I am a silent member who reads this report every morning without fail but contributes infrequently. The report has been a great learning experience for me.
I would like to wish you all the best Paul and to Thankyou for your tireless volume of quality reports over the years.

I find Stockopedia a great platform. But it will be poorer without Paul. I shall be following Paul’s Substack together with Paul Hills very informative interviews and other investor substacks. I shall continue with Stockopedia. The combination of all these sources of ideas and information will be the basis for my decisions.

Lochinver

This comment has been moderated

Well over two hundred people, probably most also Stocko subscribers, have signed up to Paul's new venture in less than twelve hours.
As opposed to the rather bitter half a dozen who have taken the opportunity to have a go at him after he has left and cannot answer back. None of whom were prepared to do the same when he was here, with the notable exception of Yiannos according to his recent post.

Boon

My view on Asos (LON:ASC) is that it is probably only a matter of time before they merge with Boohoo (LON:BOO) . Both companies are struggling to be profitable, and the operations have a high degree of overlap, so there is lots of cost synergies that can be extracted.

Once that happens, and if the EU and UK government gets their act together and tighten the screws on de minimis parcel shipments, then they probably have a sustainable business model.

There is also an outside chance that Temu and Shein clothing is banned after a public health scandal; bound to be some sort of "baby poisoned and dies wearing baby clothes from Temu that were contaminated with [x]". Its a ticking time bomb just waiting to happen, given that these are marketplaces without rigorous whole supply chain checks and assurances.

6th Nov '24

Rusty2

What happened to Associated British Foods (LON:ABF), not sure there much interest in Vodafone (LON:VOD), don't think that is adding any value to the content.

The Jayman

Hi Paul. Completely agree re PS and I am following him on Substack.

Someone told me you also publish through a Substack account - what is your username please? Thanks

Helvellyn

Big hat tip to yiannos1 re Gulf Keystone Petroleum (LON:GKP) and the potential of an SP bump up if there was news of the opening up of the Kurdish oil exports.

Up 8% on the news this morning.

threeputt

Just wandering back through these screens and I came across your post and felt inclined to air my own recollection:

I made a post one morning requesting an SCVR and I got this reply from PS

"What a boring comment. I'm happy to stand down if you think someone else
can do a better job. But am I going to waste my time writing about
rubbish/boring companies? No. find someone else to do that."

I was shocked at the rude reponse and commented that Robbie Burns informs us that boring companies are often the best winners. PS went on that day to extol the virtues of RBG Holdings (LON:RBGP) at 20p, one of those rubbish companies he doesn't want to waste time on

I have never forgotten that comment

Smiths News (LON:SNWS) a director, CEO, has just sold over a million shares. You may want to reconsider your holding.

john2

Where did you get that information Rusty?

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

Thanks I hadn't seen that. That's getting on for half his holding.

Viz

Considering he has been in and around the company since 1994 and been CEO since 2020 (when the price tanked) this would represent his first sale and I wouldn't be overly concerned.

DaviStoVest

I don't think politeness and/or tolerance were among Paul's principal virtues. I think he enjoyed having a strong and loyal band of personal followers and, maybe, came to believe that this gave him licence to be somewhat rude and disdainful towards people who questioned his approach and priorities.
It doesn't matter whether you think Paul was right or wrong regarding the merits of the company you requested he looked at. You are his customer and should be treated with respect.

Fantastic comment Sparkly , absolutely spot on

12th Nov '24

I joined the online Mello yesterday and saw the Smiths News (LON:SNWS) presentation and asked the CEO about his disposal. He got divorced last year and that was part of the agreement that he had to sell these shares. Otherwise he had no intention and is fully committed.

Other takeaways were that the move to recycling seems a good idea. They deliver newspapers and then pick up recycling at the same time. They are 'better' than current local authority or private conntractors as the rule generally is that this needs to be cleared from the pavements by 8am. Generally, they are out before 6am so works well for them.

They are trying to get new customers (who don't already have deliveries made to them) to take up their recycling offer. They believe the profit of the addressable market is £160 million, so whilst they haven't given figures of how much they are after, this could be material if executed properly.

I asked whether there was a danger of productivity of deliveries dropping, i.e. if they are picking up recycling, will deliveries suffer. I was impressed with their response, they monitor every single delivery run every day to ensure KPI;s are met. Not only do they not have an 'AM/PM' delivery slot they narrow it down to 15 mins (as a former newsagent who was up every morning at 3am, I can vouch for this), they stated if they felt deliveries were slowing down, simply they would get the drivers to pick up the recycling on the way back after their deliveries as they basically have to get back to the depot by and large the same route they took as they had to return the unread newspapers from the day before.

Also, they confirmed that they charge for picking up recycling and then when these are processed, they are a commodity which can be sold, albeit like all commodities prices change.

The figures were repeated which we knew last week - debt dropping, FCF increasing, divis have a massive runway ahead of them, but interestingly, they do see themselves as a growing business. Whilst the core business of deliveries wan't expand, they are seeing uptake of the recylcing and are also looking for new opportunites.

I was more than confident that this is a business with more to give rather than the opposite and with the huge divi on offer, it's one of those that the price needs to catch up with events. Even without the special divi, if the price doubles from here, it still puts the yield above 4%? Happy holder.

sharw

26th Nov '24

Deleted (wrong board)

Daily Stock Market Report (Tue 5 Nov 2024) - SNWS, ASC, TCAP, SDR, VOD, MGAM

Explanatory notes

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Graham Neary

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