A little late today, as I had a late night at one of Dave Stredder's monthly "Mello" investment evenings in Beckenham (there is also a quarterly "Mello Central" in London). Of course I remained completely sober all evening for myDryAthlon, and many thanks to the kind gentleman who handed me an £80 CAF cheque for Cancer Research last night, it made my day!

Sanderson (LON:SND)  

We were given a results presentation from software company Sanderson (SND). I liked the straight-talking management, and the company seems to me a nice steadily profitable, if unexciting company. Some growth prospects, but nothing much to get excited about. The price looks about right on a PER of 11.

Also, I would say that you have to be careful about cash balances with software companies - as in this case, and many others, the cash is actually up-front payments by customers for services that have not yet been provided. The clue is to look for "deferred income" in the creditors section of the balance sheet, then deduct that off the cash balance to strip out the cash effect of such up-front customer payments. Sanderson is about cash neutral when you do this. Important to remember this, as otherwise you end up over-valuing companies when you work out Enterprise Value if this adjustment is not made.

However, Sanderson seems a fundamentally sound company, which has repaired its balance sheet, and makes good margins, with a quality customer base. So it's good to have met management, and park it in the section of my investing memory which says: decent company, buy if/when the shares get cheaper, e.g. on a profits warning.

Quite a lot of larger cap trading statements today, so I'll have a quick skim of the retailers, since that's my background (I was the FD of a ladies wear chain for 8 years in the 1990s), and I maintain an interest in the sector.

Ocado (LON:OCDO)

Ocado (OCDO) is a stock I am very bearish on, since their business model is fundamentally flawed - they deliver Waitrose goods, but do not have exclusivity. Plus it's a low margin, competitive area. They require huge capex,…

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