Another week kicks off with mostly trading statements as opposed to results.
H.R. Owen (LON:HRO)
Small top-end car dealership, H R Owen (HRO) puts out an (unusual these days) "exceed market expecations" trading update today. They flag Ferrari, Lamborghini, Rolls-Royce, and Bentley as having done well. Somewhat surprising, but perhaps good times are back for the rich, whilst the rest of the country chugs along in first gear?There is however caution about 2013, saying H1 is expected to be quieter, due to the timing of new models, so that might limit any upside today on the shares.
The mkt cap is £16m at 67p/share. The PER on current 2012 forecast EPS of 5.8p is 11.6, so as we know they are going to exceed that figure (but don't know by how much), then the PER looks reasonable.
I'm not so excited by the balance sheet, which has a lot of debt on it, although that's par for the course with car dealers, to fund their stock. Margins are also wafer thin. There might be some merit in buying into the upturn, but on my admittedly very brief glance at it, value doesn't jump out at me.
Also I would be concerned at the impact that higher interest rates will have once the economy does improve, on a low margin business which needs a fair bit of bank debt to operate. So it's not for me.
A share in my portfolio, Begbies Traynor (BEG) issues a statement saying that it is launching "BTG Financial Consulting". I'm a bit confused as to what is actually new, it sounds like some kind of rebranding exercise, so doesn't seem to have any potential impact on the share price. Do let me know if I've misunderstood.
SCISYS (LON:SSY)
Scisys (SSY) is a company that has been on my watch list for some time, but I've never pushed the button and bought any shares in it. Anyway, they've put out a reassuring, in line with expectations update for calendar 2012. They also mention improved margins, and that strong cash inflows underpin their progressive dividend policy. The pipeline for 2013 sounds healthy.
Even though the shares are up about 50%…
