Interesting Shares: Suggestions and ideas (pt. 1)

Friday, Jan 10 2014 by

Since I'd been out of the loop for a little while, I decided in my last post to put together a little list of the stocks that were currently piquing my interest. That's not a huge list - I confess I'm a little short on inspiration at the moment - so I also put a call out on Twitter. Along with that, a touch of snooping around over the last few days and a few e-mails from readers, I have something of a list of stocks to get me started in the new year. Researching some of these - alongside catching up with the bits of my portfolio that need more analysis - should keep me busy for the next few weeks.

To keep the post relatively short but hopefully interesting, I'll list the stocks, along with a short description of what they do and my initial impressions. Most of these I haven't looked at before in any real detail, if at all. The list is in no particular order. Scattered like my thoughts, I might say.

The list

Finsbury Food (LON:FIF) - This bakery company, I recall, was recommended to me in an email by a reader a while ago - probably a year and a half. I turned it down then, and it's a little more expensive now, but it's also significantly less indebted, restructured and - probably more importantly - I try not to put too much stock in my past judgements given how my criteria evolve and analysis improves. At first glance, it looks relatively cheap on a P/E basis, and I like management's tone in the annual report. More negatively, the company still looks rather commoditised. I'm not sure where their competitive advantage is.

Pennant International (LON:PEN) - Looks profitable and has grown quickly. Seem to have their finger in a lot of pies, and it took me a little while to figure out where they make their money - mostly, it turns out, with 'specialist training systems'  to the defence sector. This apparently includes 'software emulation', 'hardware simulation' and 'virtual reality', which all sounds rather exciting. They also develop public sector software; rather a 21st century business, by the sounds of it, and they won a massive contract last year - a good thumbs up. Looks like…

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Pennant International Group plc is a United Kingdom-based company engaged in the provision of management services. The Company operates through three segments: Training Systems, which provides and supports specialist training systems based on software emulation, hardware simulation, virtual reality and computer-based training in the defense sector; Data Services, which provides media, graphics, virtual reality software and technical documentation to the defense, rail, power and government sectors, and Software, which owns the rights to the Omega suite of software used by defense contractors and by defense authorities in Canada and Australia. It offers services that cover training equipment and related support, technical documentation, media development, software development and related consultancy. It markets in rail transportation, defense, aerospace, government, oil and gas, petro-chemical, power, retail, consumer goods, information technology and telecommunications industries. more »

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MS INTERNATIONAL plc is engaged in the design and manufacture of specialist engineering products and the provision of related services. The Company's segments include Defence, Forgings and Petrol Station Superstructures. The Defence division is engaged in the design, manufacture and service of defense equipment. The Forgings division is engaged in the manufacture of forgings. The Petrol Station Superstructures division is engaged in the design, manufacture, construction, branding, maintenance and restyling of petrol station superstructures. The Forgings division is producing a range of original equipment fork-arms for the forklift truck, construction, agricultural and quarrying equipment manufacturing industries together with after-market products. The Petrol Station Superstructures division is engaged in the business of design, manufacture and construction of petrol station canopies, convenience stores and car-wash buildings across the United Kingdom, Eire and Eastern Europe. more »

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CareTech Holdings PLC is a provider of social care services. The Company's segments include Adult Services (Adult) and Children Services (Children). The Adult Services segment consists of the Adult Learning Disabilities (ALD) and Mental Health (MH) divisions. The Children Services segment consists of Young People Residential Services (YPR), Foster Care (FC) and Learning Services (Learning). ALD provides solutions for people living in their own homes, residential care or independent supported living schemes. MH includes a community-based hospital, adult residential care homes, independent supported living and community outreach. FC provides for both mainstream and specialist foster care across England and Wales for children with disabilities. YPR includes facilities for children with learning difficulties and emotional behavioral disorders, and small specialist schools. Learning comprises employment and training services to young people and adults. more »

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

2 Comments on this Article show/hide all

TMFMayn 11th Jan '14 1 of 2

My 2p

Finsbury Food (LON:FIF) -- nothing special here. Carries not immaterial debt and is a low margin business. Best not to be tempted by a low P/E only.

Pennant International (LON:PEN) -- Powell family I think own 39%. Your 70%-plus figure probably stems from the annual report, or info based on the annual report, which indicates two Powell family members own 10m shares each (but which are duplicates). I like this business and own a few shares.

MS International (LON:MSI) -- I could never find any annual reports on its website, but the firm has recently moved to AIM which dictates under rule 26 that annual reports should be published online. Still, the very uncommunicative nature of the board during their main-market days is not a plus point. Has net cash though, and is a boring engineering business, and heavy insider ownership, so could be worth another look.

Caretech Holdings (LON:CTH) -- I too would be wary of government funded-dependent firms. All too often the politics change and such firms end up in trouble.

Games Workshop (LON:GAW) -- I would be wary of stating loyal customers here, as customers are often boys aged between 8 and 14. Quite a unique business though, and I recall the board no longer visits the City to undertake presentations and the boss often quotes Buffett, which I quite like.

I would look at PEN, GAW and MSI in that order. I am looking forward to the next five.

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TMFMayn 11th Jan '14 2 of 2

Me again

With MSI, you will have to look at director pay and general corporate governance and take a view whether the board is looking after the interests of external shareholders (or themselves).

Firm has two non-execs, both of which have worked at the firm since the 1980s. Plus, one of the non-execs retired from exec duties last year and was paid £250,000 for 'loss of office' and becoming a non-exec.

I suppose this fiefdom could be lived with if the board had delivered wonderful growth over the years, but the firm was first quoted in 1965, the current boss was appointed in the 1980s and the market cap is still less than £40m.

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About ExpectingValue


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


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