Small Cap Report - RGS, VP., TRCS, GAW, KBT, BVS, INL, HOME

Friday, Jan 18 2013 by

Back to normal, apologies for yesterday's failure to produce a report, just ran out of time in the end. I did however attend an excellent investor evening, arranged by Equity Development, which followed the tried & tested format used by David Stredder's excellent "Mello" investors evenings.

Three companies presented last night, being Regenersis (RGS), VP Group (VP.), and Tracsis, then we had excellent canapes, drinks, and networking courtesy of the hosts, legal firm Fasken Martineau in Hanover Square, London.

I was very impressed with all 3 company presentations. It's so useful to meet management, and get a feel for the people who actually run companies that we can invest in.
If anyone does a write-up of the presentations onto a bulletin board (I don't have time, on top of the time it takes me to write these reports), then please let me know, and I will happily provide a link from here.

But very quickly my impressions were these;

Regenersis (LON:RGS)

Regenersis (RGS) - sensible strategy to target high margin growth from emerging markets. Shares have performed very well recently, and in my opinion are probably getting close to being up with events. I could see upside to 200p, but at 169p that doesn't give me enough % upside to jump in now, so regrettably it's one where I've missed the boat. Which is a pity, as I actuallyflagged it here on 25 Sep 2012 as being good value when the shares were 96p! A bit annoying that I didn't follow up my own analysis with a purchase, but never mind.

VP (VP.) - Another company that I was already aware of & liked, they are a niche equipment hire business. The CEO really impressed me with his strategy (proven to be very effective, in how they have coped well with a major Recession), and a keen focus on shareholder value. They have never cut their dividend in over 30 years! It would make a terrific share to just tuck away & forget in a long-term portfolio, being reasonably priced on a PER of about 10, and with a 4% dividend that's likely to just steadily grow each…

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Blancco Technology Group Plc, formerly Regenersis Plc, is a provider of mobile device diagnostics and secure data erasure solutions. The Company's segments include Erasure and Diagnostics. The Erasure segment focuses on development and delivery of solutions, and includes Blancco, which provides erasure software; SafeIT, which is engaged in cloud and networked data erasure business, and Tabernus, which is engaged in providing software erasure products. The Diagnostic segment includes Xcaliber Technologies, a smartphone diagnostics software business. Its secure data erasure solutions include Blancco Management Console, Blancco Cloud, Blancco File, Blancco 5, Blancco Mobile Solutions, Enterprise Erase E800, Enterprise Erase E2400, Enterprise Erase Mobile and Ontrack Eraser Degausser. Its mobile diagnostics solutions include fault diagnostics, repair and program enablement. It serves manufacturers, financial institutions, healthcare providers and government organizations across the world. more »

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Vp plc is engaged in equipment rental and associated services. The Company is engaged in providing products and services to a range of end markets, including infrastructure, construction, house building, and oil and gas, both in the United Kingdom and overseas. Its segments include UK Forks, Groundforce, Airpac Bukom, Hire Station, Torrent Trackside, TPA and TR Corp. The UK Forks segment is a hirer of telescopic handlers and tracked access platforms. Its Airpac Bukom segment offers oilfield services and is engaged in provision of specialist compressed air and steam generation services. Its TPA segment provides equipment rental and installation of portable roadways, walkways and stairways. Its Hire Station segment is a provider of small tools, lifting, safety, survey, press fitting and low level access equipment. Groundforce is a rental provider of excavation support systems and specialist products.TR Group provides technology solutions to corporate, industrial and government clients. more »

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Tracsis plc is a holding company. The Company is engaged in the business of software development and consultancy for the rail industry. Its segments include Rail Technology and Services, and Traffic & Data Services. The Rail Technology and Services segment includes its Software, Consultancy and Remote Condition Monitoring Technology, and also includes Ontrac Limited and Ontrac Technology Limited (together being Ontrac). The Traffic & Data Services segment includes data capture, analysis and interpretation of traffic and pedestrian data to aid with the planning, investment and ultimate operations of a transport environment and it also includes SEP Limited (SEP). It provides software products, consultancy services and delivers customized projects to solve a range of problems within the transport and traffic sector. It specializes in solving a range of data capture, reporting and resource optimization problems along with the provision of a range of associated professional services. more »

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

1 Comment on this Article show/hide all

dangersimpson 18th Jan '13 1 of 1

Hi Paul,

I find the level of short position in Home Retail (LON:HOME) interesting as well. Normally the hedge funds are pretty shrewd and spot stuff that other investors miss however I can't help thinking they've dropped the ball with Home Retail (LON:HOME). Unless they are just playing a pairs trade then the shorting would seem to be a general negative stance against physical retail and Home Retail (LON:HOME) as one of the biggest retailers would seem to be a prime target. However my view with companies like Home Retail (LON:HOME) & Halfords (LON:HFD) is 'never mind the story look at the cashflow.' If you ignored what they did and just followed the cash you'd probably rate them much higher.

And as you've pointed out in the past the balance sheet for Home Retail (LON:HOME) is rock solid. Not just £300m+ Cash but a £450m fully owned store card debtor book. I really wonder if the hedge funds are actually aware of this, it wasn't to me until you pointed it out and I read the annual report.

Probably the one criticism that I have of £HOME's management is that they have been too cautious hoarding cash. I guess this makes sense when trading is deteriorating banks are unreliable and you are the focus of hedge fund shorting however now trading seems to be stabilising I'd really like them to look at factoring that debtor book and returning cash to shareholders. Having to fund say a £600m special dividend would certainly put a short squeeze cat amongst the hedge fund pigeons :-)



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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 on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »


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