Small Cap Value Report (12 Jun 2014) - TSTL, RGS, SPH, VNET, VLX, RHL

12th Jun '14 by Paul Scott

13 comments 20723 reads

Good morning! A jolly time was had by all at last night's ED Investor Forum, kindly hosted as usual by lawyers Fasken Martineau in Hanover Square. I enjoyed all three company presentations, brief impressions as follows;

Tristel (LON:TSTL) - Several shrewd investors have urged me to look at this company in recent weeks, so I always sit up and take notice when highly successful investors begin to mention the same company. Checking back on my notes here, it's always looked a tad expensive, but broker forecasts keep going up. In the last year consensus forecast EPS has doubled from 2p to 4p. With another outperformance RNS just a few days ago, I think this company deserves its forward PER of just over 15. One attendee put it politely by suggesting to me that the CEO & FD of Tristel would benefit from going on a presentations skills course! It was a rather peculiar, wooden, scripted presentation, with awkward pauses and almost robotic delivery. Although in a way I find that quite encouraging - if management are hopeless at ramping the share price, then you're more likely to get a bargain! The content of the presentation is what counts, and Tristel are clearly on a roll with their innovative products, which are now being put through an international roll-out.

Regenersis (LON:RGS) - The complete opposite in terms of delivery, which was a super-confident presentation from this electronics repair company. Mind you, the presentations should be slick by now, as they seem to appear at virtually every investor event going! I spotted the value here at 90p, but sold too early at 150p. The shares are now 390p, and growth is being achieved on many fronts, mainly from acquisitions in emerging markets. A fairly large acquisition has been made of a data erasure company, and a very convincing case was explained for this deal. I'm not tempted to buy back after such a big rise in price, but was discussing the company with a large shareholder afterwards, and completely understood his decision to hold for more gains.

Sinclair IS Pharma (LON:SPH) - This was a new company to me. It mainly does cosmetic creams and other treatments for skin. The charismatic CEO gave us a master class in the sector, including some…

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MichaelFBS

12th Jun '14

Hi

Sorry to post this here but any idea why Dart Dart (LON:DTG) is down 10% today. Other airlines seem to have held up and I can find no Dart (LON:DTG) specific news.

Thanks.

shanklin100

purpleski

Take a look at the posts on Paul's article yesterday.

HTH. Cheers, Martin

chillyhill

I assume this is due to the case in the news regarding the Jet2 airline losing a compensation case.

Thanks. Will do

Seems a little excessive when

"how much they can claim depends on the length of the journey, rising from 250 euros (£201) per person on short haul flights to a maximum of 600 euros (£483)."

Oh well we will see.

ryanc106

Hi Paul

You hold QPP as a long position? Really? or is this a typo?

rmillaree

Ref IDOX

I like this company and held for a short period of time. They have reportedly had issues with mixing up the public electoral role with the non public one. This kind of accident is virtually unforgiveable to be honest. I can imagine they will have all the moaners with nothing better to do with their time than complain about getting junk mail giving them grief (via their council). I sold up as soon as i heard this news.

Fortunately for shareholders who didn't panic like me there has not really been any knock on bad news as of yet that i can see, although one wanders if they don't have those markets completely stitched up whether councils may opt to switch at next renewal point simply so they can say they took some affirmative action - the reality probably being that IDOX have probably had their one chance and hopefully learned a lesson.

http://www.dailymail.co.uk/news/article-2623853/Electoral-roll-data-leaked-Millions-names-addresses-illegally-sold-junk-mail-firm.html

ryanc106

Ref QPP - yep Paul really is a shareholder now unless he is playing a late or early April Fool Joke which us and i am sure he is not allowed to do that under site conditions although perhaps he should have in the small print at the bottom that he can tell us porkies 3 or 4 times a year to spice things up a little.

This isn't as nonsensical as it may sound as every business has as theoretical price that would scream as potentially being worthy of a punt. They have cash in the bank and a huge debtor book and have acquired some companies that are deffo legit. Even when RT previously messed up (while shorting the share hmmm - lol - oops what a pity) with TIG there was an underlying business behind the Megalomaniac exterior that RT seems to love to portray with his business ventures. In some respects you gotta admire RT for doing his thing - Freeeeeedom!!!!!!!!!!! and all of that.

I find the rumours doing the round that the Canaccord Broker and QPP (Terry) seem to have had some sort of issues as fascinating - interesting theories as to why the House Broker doesn't have a view on their own clients prospects at present.

PS - Great stuff today Paul - 6 useful write ups in one morning legendary stuff

TMFMayn

I attended a TSTL presentation last year and would agree the board's presentation skills were not super slick. But I find that quite endearing generally because I do not like tip-top salesmen running companies as they tend not to have much substance behind them. Anyway, unprompted and early on into the session I went to, TSTL's rather wooden FD disclosed the group's targets were 17% per annum compound sales growth and margins reaching 15% within three years I think. Info/guidance such as that beats slick public speaking on blue-sky projects any day.

"Personally, I'm always grateful to people who point out the negative points on shares that I hold"

I've heard there's a blogger on this site who has written loads of insightful bearish stuff on QPP -- you should look him up :-)

Fangorn

13th Jun '14

"I've heard there's a blogger on this site who has written loads of insightful bearish stuff on QPP -- you should look him up :-) "

Given the original poster is reading the Small Cap report thread, produced daily by Paulipilot, I'm pretty certain he is already aware of PP's bearishness on QPP!

Hi fangorn,

The original poster of that line of text in this case was actually PP, from his blog post above. I am not sure whether PP is still bearish on qpp if he holds the shares now. I can,t keep up with his views!

Ah misread the whole shebang then Mayn. Apols.

He's still uber bearish as far as I can see. He's consistent in that regard!

Paul Scott

16th Jun '14

Hi,

Sorry for any confusion.

As stated at the end of all articles, if I hold a stock, then it will say so at the end of the article. I did indeed buy some Quindell (LON:QPP) on the big fall to 12p a few days ago, and still have half of them. My view on the company is unchanged (i.e. I don't like it one bit), however as a trading punt, I think there is a short-term profit to be made, hence why I hold a few shares currently. My view is that the disappointment/embarrassment of the Full Listing application failing is likely to fade, and the company's PR machine is no doubt in full flow trying to convince investors that nothing fundamental has actually changed - which in a way it hasn't - where the shares are Listed doesn't alter the fundamental value of the company in the long run.

I think the sign of a commentator with integrity is that they still say the same things about a company whether they are long, neutral, or short. I've been all three in the last year, and am currently long of QPP, yet my message has been consistently the same - that the company & management are poor quality (in my opinion), and they have a lousy business model that doesn't generate cash, and is probably not sustainable in the long run.

So why am I long? Because I think there could be a short term bounce in price. It's not an investment, it's just a trading punt.

Compare & contrast my approach (of telling it like it is), with the devious and manipulative attempts of some people to silence my comments on the company, just because they are long of the shares. I have utter contempt for such people.

Regards, Paul.

Small Cap Value Report (12 Jun 2014) - TSTL, RGS, SPH, VNET, VLX, RHL

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Paul Scott

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