**NEW VERSION** - Small Cap Value Report (10 Jun 2015) - DIA, OPM, SHOE, BOO

Wednesday, Jun 10 2015 by

Apologies, the original report got corrupted, so I'm recreating it from a backup.

I've got loads of companies to report on today, so quite a full report today.

Dialight (LON:DIA)

Share price: 477p (down 36% today)
No. shares: 32.5m
Market Cap: £155.0m

Profit warning - and it's quite a nasty one too, the key parts saying:


The warning signs were very evident in the last trading update in April, indeed I predicted that another profit warning could be on the way, in my report of 15 Apr 2015.

It's interesting how the fall-out from the lower oil price is triggering profit warnings in other sectors. So any company with material sales to the oil & gas sector is likely to be suffering to some extent.

Today's update also says that the new CEO is conducting a strategic review, which usually means closure of factories & offices, redundancies - all of which are usually costly.

My opinion - the sheen has very much come off this share, and it's almost impossible to value at this stage. I shall await broker updates. It sounds to me, from today's and April's updates, that this company is a can of worms, with possibly more bad news to come out.

The new CEO is likely to kitchen-sink things at some point, so I'd rather sit on the sidelines until everything has come out in the wash.

On the positive side, the balance sheet looks fine to me, so I don't see any solvency concerns, and it sounds as if the company will remain profitable, albeit at a lower level. This share is unlikely to regain a high PER any time soon though, it looks permanently damaged now, after being a previous stock market darling.

Note that Matt Earl, a talented analyst & short seller, wrote a piece on his blog in Dec 2014 predicting further problems for Dialight. People may not like it when short sellers flag up problems (or potential problems) in shares they hold, but to ignore such concerns is folly, and very often a costly mistake. In my view, Matt is one of the best shorters in the UK, because he publishes detailed financial analysis to back up his view, rather than just trying to spread fear…

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Dialight plc is a holding company. The Company manufactures and sells lighting products in the industrial market. It operates through two segments: Lighting, and Signals and Components. Its Lighting segment develops, manufactures and supplies light emitting diode (LED) lighting solutions for hazardous and industrial applications, and includes anti-collision obstruction lighting. Its Signals and Components segment develops, manufactures and supplies status indication components for electronics original equipment manufacturers, together with industrial and automotive electronic components and LED signaling solutions for the traffic and signals markets. Its LED lighting solutions include Vigilant Industrial Solutions, DuroSite Industrial Solutions and StreetSense Infrastructure Solutions. Its LED signaling solutions include transportation signals, obstruction signals and SafeSite hazardous area signals. Its indication solutions include Circuit Board Indicators and Panel Mount Indicators. more »

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Shoe Zone plc is a footwear retailer in the United Kingdom and the Republic of Ireland. The Company offers women's shoes, men's shoes, boy's shoes and girl's shoes. The Company's online offering combined with its store network enables customers to shop through multiple channels. The Company operates from a portfolio of approximately 550 stores. Its customers purchase all of the products available in stores, as well as an additional approximately 400 product styles. The Company sells over 20 million pairs of shoes per annum. The Company has operations in various countries, including Germany, Italy, Spain and France. The Company's distribution center is located in Leicester, England. The Company's subsidiaries include Castle Acres Development Limited, Shoe Zone Retail Limited, Zone Property Limited, Zone Group Limited, Shoe Zone (Ireland) Limited, Shoe Zone Pension Trustees Limited, Stead & Simpson Limited, Zone Footwear Limited, Zone Retail and Walkright Limited. more »

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Boohoo Group PLC, formerly boohoo.com plc, is an online fashion retail group. The Company is based in the United Kingdom and has a strong presence in the United Kingdom, the United States, Europe and Australia, selling products to almost every country in the world. The Company owns the boohoo, boohooMAN, PrettyLittleThing and Nasty Gal brands. These brands design, source, market and sell clothing, shoes, accessories and beauty products targeted at 16-30 year old consumers in the United Kingdom and internationally. more »

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

21 Comment on this Article show/hide all

Paul Scott 10th Jun '15 1 of 21

My apologies - the computer gremlins destroyed my original article, so I've recreated it from a backup. That has left all today's comments stranded in an empty post, so sorry about that.

As regards my videos, as from today I am including a tag within the main SCVR not only for the companies reported on in the main article, but also the companies that I review on that day's video. The good news is that it works! So for example one of the companies I looked at in today's video was Ensor Holdings (LON:ESR) and if you look on the Discuss tab for Ensors, then today's SCVR comes up as having mentioned it, even though it's in the video, not the main report.

I mention at the end of each written report which companies are in the day's video, so this should now link together the text report, and the video reports.

Regards, Paul.

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About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for Stockopedia.com on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »


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