I Read The News Today Oh Boy! 23-Jul-2018

Monday, Jul 23 2018 by

Morning all!

SRT Marine Systems ( SRT Marine Systems (LON:SRT) ) – 26.25p – £36.7m – PER 13.8

Final Results For The 12 Months To End March 2018 – Revenue down from £11.0m to £5.3m, resulting in a Loss Before Tax and exceptional items of £4.3m (2017: Profit £ 1.2m) – The rest doesn’t sound any more inspiring either.

I said last time I looked at this that I couldn’t see how a PER of 22.4 was justified and I am not even sure a PER of 13.8 represents an investment case here, for me it doesn’t.

Microgen ( Microgen (LON:MCGN) ) – 385p – £234.4m – PER 19.8

Trading Update For The 6 Months To End June 2018 – Revenue up 23% with Profits/EPS up about 10% each (the Interim Dividend is also increased by 10%).

This had dropped down to my Watchlist price (440p) but I wanted to wait and see how an update looked – I sense things may be slowing down here a little and on a PER of 19.8 I am going to go Neutral for now.

McColl’s Retail ( McColl's Retail (LON:MCLS) ) – 210p – £241.9m – PER 9.52

Interim Results For The 26 Weeks To 27th May 2018 – Revenue up 19.2% (to £601.7m) but down 2.7% LFL. PBT £2.3m (2017: £4.5m), Basic EPS 1.3p (2017: 2.8p) with the Interim Dividend maintained at 3.4p (2017: 3.4p).

The Net Debt remains high at 50% or so of Mkt Cap and sub industry average Operating Margin still put me off. I remember watching the rise of McColl’s last year wondering what I had missed, watching it’s slow but steady fall this year, I am not quite sure it’s ready to stop just yet – I remain on the side-lines.

SThree ( SThree (LON:STHR) ) – 347.5p – £452.2m – PER 11.4

Interim Results For The 6 Months To End May 2018 – Encouraging H1 with Revenue up 11% but reported PBT is down 7% and there’s now Net Debt of £6.2m (HY 2017: Net Cash £5.2m).

Stockopedia (StockRank 92) still likes this more than I do – I…

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

5 Posts on this Thread show/hide all

MrContrarian 23rd Jul '18 1 of 5

My morning smallcap tweet:

Escape Hunt (LON:ESC), Kromek (LON:KMK), SRT Marine Systems (LON:SRT), Biome Technologies (LON:BIOM), GetBusy (LON:GETB), Shield Therapeutics (LON:STX)

Escape Hunt (ESC) signs five year exclusive licence agreement with BBC Studios to create Doctor Who themed escape rooms in the UK. Opening December to follow the autumn launch of new series. Sounds great but that license won't be cheap.
Kromek Group (KMK) New contracts to develop next generation radiation detection solutions for US Gov't. The two contracts are worth a $2.6m min., to be delivered over the next three years with a potential two-year extension to $3.3m total.
SRT Marine Systems (SRT) Diabolical FY as warned in contract cancellation RNS. EPS -4.09p (1.14p). "I recognise that we are measured on the profits that SRT delivers and to that end expect SRT to measure up to expectations in the near future." DO you know any other tunes Simon?
Biome Technologies (BIOM) Q1 £4.3m, up 43%. Board remains confident in the Group's outlook for the remainder of the year. Is that in line?
Getbusy (GETB) is not aware of any reason for the price movement. It's up a third in a week.
Shield Therapeutics (STX) Yet another director change as a 2nd interim CFO joins. Lost Chmn in June and CFO in Sept

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mrosbiston 23rd Jul '18 2 of 5

Matylda - often your watchlist prices are below current market prices - out of interest, what circumstances would make you pay up for the current market price?

would it be: fwd P/E is fairly priced relative to sector + announces a great set of earnings/v positive trading statement?

would you pay up for a company if they had great results and opened up 10% on the morning?

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Beginner 23rd Jul '18 3 of 5

Re Mission Marketing (LON:TMMG) , every time the company seems to be progressing well management grant themselves a shedload of shares. Best avoided.

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matylda 23rd Jul '18 4 of 5

In reply to post #384224

Hi mrosbiston,

Previously I used to typically set entries for a retracement (for stocks I was interested in from a fundamental perspective), always being one to hate paying up. This cost me dearly on too many occasions and having read the Minervini books I recently changed to being a buyer on technical criteria too. This is probably the only aspect of my investing I have changed in 20 years. So, to answer (or at least try to), I usually now pay up on good news (trading update/results) for stocks meeting my technical and fundamental criteria.

Main technical criteria is 52 week high 50% 52 week high and price and price within 25% of the high + having some MA's in-line too. Minervini uses cups and handles etc. Me, I can just take an Entry on good news confirmation of my Fundamentals.

Main fundamentals - I kind of like to see Revenue and EPS growing more than the PER or at least in-line. Also like to Cash (or little Debt). Also like good ROCE and Op Mgn (above industry mean).

There's obviously a little more to the Tech and Fund but high level, that's the kind of starting point for both.

Would I pay up for something that's gone up 10% - A tough one but in some cases yes. For me, this is more of a personal/gut call and specific to each situation and individual, I am not sure it could be defined with any clear yes or no.

Hope it helps.

Blog: Briefed Up
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mrosbiston 25th Jul '18 5 of 5

thanks Matylda, always interesting to read the processes of others

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