I attended UP Global Sourcing Holdings (LON:UPGS) site visit 7 Feb. There will be trading update on Monday 11 Feb.

I wrote this note when share price collapsed sub 40p:


I was buyer down into the 30s as despite the post-IPO blues and disappointments I felt that their woes were understandable and non-critical. So far so good in that trading seemed to have recovered despite the tough background.

If you are interested MD Andrew Gossage gave a useful presentation at Equity Development event which can be watched here:


Anyway, what follows is my update following the site visit. In conclusion I believe this stock has the potential to travel a long way from current 57p. How far depends on some factors that need to be proved out that I detail below. if the proving is good then I can envisage holding this for many years as it continues to surprise to the upside, grow earnings and push up its valuation rating.

Information and views on UPGS

The origin of UPGS was Simon Showman in the 'close out' business 20 years ago. That is buying product from known brand at below cost (c.40% of cost) as the seller needs to shift product out of the way for some reason. UPGS still do some of this (I can't remember if 5 or 10% of revenue) and for example have bought stock from Alessi to punt at discount.

Senior team have been together for a long time and have shown the ability to be both opportunistic and strategic. On site met with founder Simon Showman (I get the impression he's not really keen on doing the external stuff like this as he wants to get on with business...he's going to have to show more of himself over time to take UPGS up in investor eyes and help the stock into a teen multiple). He's your real deal entrepreneur left school at 15 to make money. 

My sense from meeting is well balanced team with Showman the guy that pushes boundaries and key relationships and the others around him keeping the show on the road and preventing overreach and missteps. There seems to be mutual respect and trust. These are things that can never…

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