Daily Stock Market Report (Wed 21st Oct 2026) - HDD, HFD, SRB, DUKE

The largest merger of all time is currently being considered by special committees at two companies: Space Exploration Technologies (NSQ:SPCX) and Tesla (NSQ:TSLA).

The SpaceX share price is up 8% in after-hours trading to nearly $160, well above its IPO price of $135, after Elon Musk’s comments yesterday in favour of a merger between the two companies.

By market cap, SpaceX is the larger of the two, and the terms of any possible merger have not yet been determined or agreed.

Bloomberg suggests today that the rationale for a merger "lies in their shared ambitions to leverage artificial intelligence for data centers in space, driverless cars and humanoid robots.”

Overnight market movements:

• The FTSE is up 0.1% at 10,740

• S&P 500 is up 0.2% at 7,730

• Brent crude (December) is up 1.5% at $110.40/bbl

• Gold is down 0.2% at $4,120oz

• Bitcoin is down 0.1% at $82,600

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Ed Sheldon jons me today.
The Agenda is complete. Spreadsheet accompanying this report: link.

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Companies Reporting

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Edward's Section

Hardide (LON:HDD)

Up 7% at 111p (£82m) - Year End Trading Update - Ed S - GREEN =

[At the time of writing, Ed S had a long position in HDD]

Hardide, a provider of advanced surface coating technology, has provided a trading update for its financial year ended 30 September 2026 (FY26).

Highlights:

• Revenues for the year more than doubled to £13.5m (FY25: £6.0m).

• EBITDA is expected to be £5.8m (FY25: £1.0m) and profit before tax £4.9m (FY25: £0.2m), both ahead of market expectations*, as a result of improved cost management and continuous improvement initiatives.

• Final quarter revenues were £4.6m, generating EBITDA of approximately £1.9m.

• Gross cash at 30 September 2026 was £3.2m (after making a £1.5m investment in working capital).

Operational news:

• Trading momentum continues to be strong.

• The company successfully delivered the first shipments of coatings for a new generation of parts for its major North American customer, leading to a further US$1.9m sales order covering the period to November 2026, as announced on 14 September 2026.

• The group has recently won further production work in the aerospace sector, together with new customer wins in the energy and industrials sectors, all of which will contribute to revenues in FY27.

• Testing continues across a number of applications with a potential major energy sector customer in the Middle East, as well as customers in the semiconductor sector, with results to date proving encouraging.

• A deposit of £0.7m has been paid for coating reactors with a total expected cost of £3.5m which, as previously announced, is expected to double Hardide’s operational capacity to approximately £40m of annual sales. The new capacity is scheduled to come on stream during the second half of FY27.

Outlook:

• The combination of strong current trading momentum and encouraging recent order intake underpins market expectations and positions Hardide for further significant growth in FY27, consistent with the company’s strategic objective of more than doubling revenues again over the next two to three years.

* Hardide provides current FY26 market expectations of: revenue of £13.5m, EBITDA of £5.5m, and PBT of £4.6m and FY27 market expectations of: revenue of £18.8m, EBITDA of £8.0m, and PBT of £6.6m.

Ed S’s view:

I initiated a very small position in Hardide back in mid-September at 91.7p, despite the fact that the stock was already up 400% year to date at the time (it started 2026 at 18.5p). I was attracted to the prolific revenue growth, surge in profitability, talk of expansion into other industries, and reasonable valuation.

Today’s trading update vindicates my investment decision. This is a company with significant momentum at present.

For the year ended 30 September, revenue more than doubled to £13.5m. Meanwhile, EBITDA and profit before tax are expected to be £5.8m (FY25: £1.0m) and £4.9m (FY25: £0.2m) respectively, both ahead of market expectations, thanks to improved cost management and continuous improvement initiatives.

Looking ahead, the company plans to more than double revenues again over the next two to three years. It’s worth noting here that revenue in Q4 was £4.6m (34% of full-year revenue).

One thing I was concerned about when I invested here was customer concentration risk – a lot of the top-line growth over the last year has come from a North American customer in the energy space. So it's encouraging to hear that the group has recently won further production work in the aerospace sector, along with work in the energy and industrials sectors.

The company also notes that testing continues with a potential major energy sector customer in the Middle East as well as customers in the semiconductor sector. So, it’s definitely trying to diversify its customer base.

Now, the Stockopedia StockRank system doesn’t like Hardide so much – its score is only 50. But I think that will change.

In the past, revenues have been up and down and the company has consistently lost money. This has most likely weighed on its Quality score.

As for the Value score of 4, this is most likely down to the fact that earnings per share in FY25 were just 0.2p. With earnings of 7.7p forecast for the current financial year, the valuation is starting to look a lot more attractive (forward-looking P/E ratio of around 14) so we should see the Value score rise.

The Momentum score is already high at 92. You’d expect that after a 500% year-to-date gain.

Overall, I remain quite bullish on Hardide, despite its big move higher in 2026. After today’s update, I’m happy to keep the stock on a GREEN rating.

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Halfords (LON:HFD)

Down 7% at 256p (£609m) - Trading update for the 26 weeks to 2 October 2026 - Ed S - AMBER/GREEN ↓

Halfords has provided us with a short trading update for the 26 weeks to 2 October 2026 (H1 FY27):

Highlights:

• Strong trading in H1 supports previously upgraded FY27 guidance.

• Group like-for-like sales grew 7.1%, supporting the FY27 profit upgrade communicated in the trading update on 27 August 2026.

• Retail LfL sales grew 7.7%, with Motoring LfL sales up 7.3% and Cycling LfL sales up 8.3%.

• Autocentres (ex-Avayler) LfL sales grew 6.1%.

“The business continued to perform positively through the first half as we benefited from good execution against our strategic priorities and strong sales of seasonal categories through the warm summer weather. We move into the second half with confidence and look forward to sharing more detail on our progress at our interim results announcement later next month.”

Outlook:

• Continues to expect FY27 underlying profit before tax of between £55m and £65m. The strong H1 performance combined with accelerated investments in marketing and technology in H2 will result in underlying profit before tax being weighted towards H1.

Ed S’s view:

When Graham covered Halfords on 27 August, he gave the stock a GREEN rating. However, he said at the time that if the retailer doesn’t pull another rabbit out of the hat in the next six months with another upgrade, he’d be inclined to take the rating back to AMBER/GREEN.

Looking at today’s update, I think now is the time to take it back to AMBER/GREEN. There are a few reasons why.

For a start, there’s no upgrade to guidance today. The company is still expecting FY27 underlying profit before tax of between £55m and £65m.

Second, accelerated investments in marketing and technology in H2 are expected to result in underlying PBT being weighted towards H1. In other words, H2 PBT could be soft and we could be looking at the lower end of that £55m to £65m forecast.

Third, I suspect that a lot of the recent sales growth has been driven by the incredible weather we had in the UK this summer. I imagine that this significantly boosted demand for bikes, cycling equipment, and camping equipment.

Finally, the valuation looks relatively full, to my mind. With analysts expecting EPS of 20.4p for FY27, we are looking at a P/E ratio of about 12.5 (note that the average analyst price target was only a few percentage points higher than the share price before today’s drop).

Now, the StockRank system does still like Halfords – it has a score of 99 at present (note that the Value score isn’t that high). Another positive is that there’s a near-4% dividend yield on offer at the moment.

I’m just not convinced that the share price momentum here will remain as strong as it has been lately. So, I’m taking the stock down a notch to AMBER/GREEN.

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Graham's Section

Serabi Gold (LON:SRB)

Down 14% at 193.55p (£148m) - Reports Q3-2026 Production & Operational Highlights - Graham - AMBER ↓

Mark covered Serabi's H1 results last month. There were significant cost increases in Q2, leading to a decline in profitability ($9.1m of after-tax profit in Q2 vs. $21m in Q1). There were also some question marks over mine licences.

Today's Q3 update includes a reduction in production guidance for FY26, relating to these licences.

Q3 production was 11,008 oz, the same as Q2 this year, and lower than the level that Mark expected (13,000oz). This was due to "lower-than-expected grades from Palito Complex".

Palito has had a new ball mill installed, now in final commissioning, in anticipation of higher volumes.

Licences: Serabi's Coringa Mine "operates under a 3-year GUIA licence which expires on January 29, 2027... Discussion are ongoing... regarding continuation of the current GUIA". This is from Brazil's federal mining agency.

Under the GUIA, Serabi has permission to transport 100,000 tonnes of ore annually from Coringa to Palito, for processing. 85,600 tonnes out of this allowance had been transported by the end of September, and they now have to stop transporting to Palito - until the GUIA limit is increased, or they get an operating licence.

Two other government agencies are involved when it comes to getting an operating licence. One of them is needed to provide change of land use approval. The other one is the protection agency for indigenous groups. Both of these approvals are "progressing", with the land use approval said to be in the final stage. Inidigenous groups are said to have given their approval.

However:

Due to permitting delays affecting planned production ramp up, FY2026 gold production is now expected to be at similar levels to FY2025, compared with previous guidance of over 53,000 ounces.

It's not clear to me exactly which government agency is responsible for the delay - I would presume all of them that have not yet signed off on Serabi's plans.

The company's gold production last year was 44,169 ounces, so the new guidance is a very large downgrade (17%).

Low grades have kept quarterly production at 11,000 ounces, and it looks like the delay in permit will cap production at that level until it is resolved.

CEO comment:

Our immediate priority during FY2026 has been, to secure the outstanding approvals at Coringa, primarily the LO [operating licence] and in the near-term the continuation to operate under the GUIA trial mining license. These approvals would have enabled us to process additional Coringa material through the expanded Palito plant in the fourth quarter. As these approvals have still not been received, we are unable to deliver the previously anticipated increase in Q4-2026 production

Cash is strong at $63m, but there's a wide gap to reach the $100m that Mark estimated by year-end (on the basis of prior production guidance, which is no longer in force).

A word on dividends/buybacks:

The Board announces the 2026 shareholder return policy will be a targeted return of up to 20 - 30% of the Group’s free cash flow to shareholders through dividends or buy-backs.

Graham's view

As a rule I don't invest in miners, so perhaps I'm not the right person to talk about this stock. But it seems to me that the risks faced here are rather inscrutable: how long might it take various Brazilian federal agencies to provide their approval for Serabi's plans? I have no idea!

One particular risk that I'm wondering about is the potential for production at Coringo to come to a complete standstill, if the GUIA doesn't get extended before it expires in January, and if there is still no operating licence by then. I'd hope that the risk of that happening is almost nil.

The good news is that the company has the $64m cash balance to protect it.

In terms of profitability, today's update doesn't provide AISC (all-in sustaining cost) information but for context, AISC in H1 was $2,682. Even if it's a high-cost producer, it does still have a margin against the current gold price of $4,100.

We were moderately positive on this last time, after Mark studied the effect of higher costs on profitability.

With the addiition of permitting delays into the mix, I'm going to take us down another notch, to neutral.

This might still be a bargain - assuming high gold prices and the rapid receipt of permits. It had previously been forecast to generate net income of $95m and then $110m, this year and next year. But for today, I'm going to sit on the fence.

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Duke Capital (LON:DUKE)

Up 4.5% at 22.48p (£115m) - Response re. Share Price: Operational Update - Graham - AMBER =

The DUKE share price has seen some drama this week, on above-average volume. It fell nearly 20% yesterday, on no official news:

This is how Duke responds:

• Total cash revenue for the quarter ending September 30th was £7.0m, in line with the previous quarter

• H1 dividends were covered by free cashflow

This bit seems more substantive:

The portfolio reorganisations referred to in FY26 accounts have made substantial progress, with materially loss-making divisions in two Duke investments now exited. As the UK market continues to be challenging, we do expect lower recurring revenue to be generated within our UK portfolio in H2 with the key focus of the investment team currently being on improving the performance of the UK portfolio into next year.

There are also two capital partners (a fancy word for borrowiers) who are "in late-stage processes for exits which, if concluded, could have a material positive impact on market expectations for FY27 total cash revenue."

Finally: "The Directors believe that the current share price sits at a material discount to the current NAV."

Graham's view

The only explanation for the fall that I can find is on the well-known bulletin board ADVFN. A poster there yesterday morning said that they had sold their shares, and they highlighted losses at inTEC, an IT managed services company based in Manchester.

inTEC is still listed as a "current" investment on Duke's website, with £31m+ invested.

The latest accounts for inTEC Business Holdings were published about a week ago. They do not include a going concern warning from the auditors. They do show the company making an operating loss in 2025 of £7.8m, on revenues of £21.7m. They were loss-making the prior year, too.

The loss in 2025 included less than £2m of goodwill amortisation, so this is not a situation where the company was loss-making but cash flow was strong - operating cash flow was in fact negative.

Also, the balance sheet was deeply in the red with negative tangible equity of £38m. The main item here is Duke's loan which is shown with a value of £31.5m, charging an interest rate of 13.5%. Duke is also the "ultimate controlling party" - I think it owns 100% of inTEC.

As this is a "buy-and-build" situation, it's not so unusual to see highly negative balance sheet equity (due to high levels of goodwill).

However, it's always important to check that acquisitions are followed by profitability before too long, particularly where there is leverage involved.

We can only hope that inTec has had a much better 2026, and/or that it has been successfully reorganised (it has sold some of its subsidiaries in 2026), and/or that Duke is exiting it completely, without making a loss.

Last year, Mark did some digging into another Duke investment, and concluded by taking our stance on the company down by one notch to neutral.

I have some history here, as a former shareholder. I've not been tempted back in. I've accepted that Duke tends to invest in businesses that are not of the highest-quality, but I've been impressed by its ability (so far) to dodge any serious losses.

It has done this by successfully exiting some troubled investments. It also frequently ploughs money into its existing portfolio.

Duke's total investment portfolio at the end of FY March 2026 had an accounting value of £263m. After taking Duke's own leverage into account, net assets were £175m.

So if Duke's £32m position inTEC was worthless, it would cut Duke's net assets by 18%, to £143m.

The Duke market cap is at a c. 20% discount even to that low figure.

I'm going to leave us on neutral here. I don't see the need to take a negative stance when the share price has already taken such a heavy hit.

The share price is saying to us that there are likely to be multiple problem parts to the Duke portfolio. It might well be right about that. I'm still not tempted to buy back in here, even at a 13% yield.