Fyffes, Tricorn, Expansys: Quick-fire thoughts

Thursday, Apr 04 2013 by

Looking at interesting companies and then hitting a roadblock is always a bit disappointing, but perhaps there's something to be said for being extra prudent with your money when the market has risen lots. A rising tide lifts all boats, as they say, and some of those boats are liable to sink rather more quickly than the marker might expect. Since I've spent the last couple of hours looking at three companies, then, I thought I might as well go through where I got to.


Expansys popped up in my screen as it's now trading at what is, apparently, a discount to its tangible assets. The online retailer and SIM card distributor now trades at 0.48p, about a quarter of where it sat a year ago, and significantly under the 14p per share it reached in 2010. The latest cliff the share price dropped off of came about because of a trading update on the 21st of March, noting that trading had been significantly below expectations, with the usual chatter about cost saving initiatives being implemented and a strategic review being undertaken. I was a bit confused by this:

The Board is undertaking a strategic review in order to accelerate its objective of becoming an end-to-end solutions provider to MNOs, MVNOs and OEMs. This is not currently envisaged to involve a sale of the Company.

My understanding of the business was that a large chunk of their revenues, as well as their previous capital expenditure, has gone on the retail side of things - their expansys.com website and the regional operations. Their previous half yearly report was talking about double digit growth rates. Is being involved in retail a part of being a 'end-to-end solutions provider to (hang on while I google these) Mobile Network Operations, Mobile Virtual Network Operators and Original Equipment Manufacturers'? There's also potential legal trouble in the SIM card segment, apparently with O2.

I just don't really get it. Management's narrative confuses me - which may very well be my own fault by being too easily confused - but I can't help but feel there's far too much stuff I'm missing that's relevant to the valuation. I'm pretty sceptical of online retail businesses anyway given the way Amazon seem to operate. If they're shifting into other segments for that reason, fine - but I don't want to pay ~1.5 times net assets for…

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Tricorn Group plc is a holding company. The Company holds interests in companies that develop and manufacture pipe solutions. The Company's principal activities include high precision tube manipulation and systems engineering. The Company operates in two segments: Energy and Transportation. The Energy segment includes manipulated tubular assemblies for use in power generation, oil and gas, and marine sectors. The Transportation segment includes ferrous, non-ferrous and nylon material tubular assemblies for use in on and off-highway applications. The Company also offers rigid, nylon and hybrid tubular products for engines, braking systems, transportation lubrication, fuel sender sub-systems and hydraulic actuation in a range of on and off road applications. The Company offers brazed and welded assemblies, tube hose assemblies and diesel injector lines for medium and heavy duty truck engines. It offers hydraulic tube assemblies and precision tubular products for the agricultural sector. more »

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Fyffes plc is a marketer and distributor of tropical produce. The Company operates through Tropical Produce activities segment. The Company operates through two divisions: Tropical Produce and Property activities. Its Property activities include its investment in Balmoral International Land Holdings plc (Balmoral), an international property company. Its Tropical Produce division is a distributor of tropical fresh produce, comprising three product categories: bananas, pineapples and melons. The primary activities of the Tropical Produce division include the production, procurement, shipping, ripening, distribution and marketing of these products. They are produced in Central and South America and distributed to the Company's customers in Europe and the United States. It owns and leases over seven banana ripening centers in the United Kingdom, Germany and Ireland and a melon distribution center in Florida. It offers product under Fyffes Blue Label brand. more »

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  Is LON:TCN fundamentally strong or weak? Find out More »

1 Comment on this Article show/hide all

Davy97 6th Apr '13 1 of 1


An e-commerce retailer should intrinsically have an efficient fixed cost base yet management embarked on a strategy to outsource core functions to turn what should be low fixed costs into expensive variable costs - making profits even more elusive.

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About ExpectingValue


Private investor turned hedge fund analyst, looking predominantly at global small caps. Sector agnostic.


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