Small Cap Value Report (14 Oct 2015) - MOS, SSY, CNCT, WGB, VTU

Hi Paul,

I wonder if Connect (LON:CNCT) is still on your reporting list. I know you have previously expressed concerns over its balance sheet and debt levels but this morning's results look good and they have started paying down that debt so maybe things are improving.

All the best,

Steve

Re. Mobile Streams (LON:MOS) and RNS. Personally I take the information that an AIM company releases in the same way as the patter of a second-hand car salesman. They are well heeled in selling you the sizzle and it is up to you to ask and research the bits they will not highlight or tell you about. This approach has stood me well.
This state of affairs will continue as long as the regulators continue to adopt a very light touch regulation of the AIM market. The latest scandals haven't done much in changing the FCA's attitude.

I agree that SCISYS (LON:SSY) management seem to be serious and competent. I met them following the earlier profit warning and they were working through all their other contracts to reassure themselves that there were no other lingering problems. They haven't reported any, so I'm confident that this was a special case. I'm currently long, for that reason.

Any software house can have a fixed price contract go wrong. The contractual requirements are almost never written with mathematical precision (or anything close to it) and it is always therefore possible to have a serious dispute with a customer about some particular that turns out to have a profound effect on costs and timescales. Then you face the choice between negotiating a compromise and retaining the client (which appears to be what has happened here) or instructing lawyers, with all the associated costs, impact on management time, and reputational damage.

When I spoke to the management they said they were having to put extra staff onto the troubled contract and that this would have an impact on profitability until the problems were resolved. That seems to be over now, so those staff will be back earning fees.

I see no reason why the SP shouldn't recover to 80p quite rapidly. At the current price, they would be a cheap way to acquire 400 staff with scarce skills, some important clients, and £40m turnover.

Good Morning Paul,
I was searching for discussion on STM (LON:STM) on here but did not find anything recent but I was sure it had been on a recent audiocast, I have now found it, it was on the Edward Roskill one, would it be possible to index those companies so if you do a search there will be link to the relevant report? Just thinking about searching in the future.

Hi Paul,
Animalcare (ANCR) posted its full year results this morning and an RNS statement was showing early on their website but was not on Investegate for some reason. Is this a company you track? Good results this morning and I would be very interested in your comments.

Paul is long in MOS?

NI

In reply to post #108132

Paul please don't answer such a question *shakes his head in dismay*

Aside from telling Paul what to do, I don't understand why you would say that chillax.

NI

Very useful

NI -- oh yes, here we go:

"(Paul holds long positions in MOS, and WGB, and no short positions."

Seems to me he writes the reviews, which then sometimes prompt a purchase, but then does not go back to put an ownership disclosure in the company sub-header.

I saw that Mayn, that's why I was asking! I was questioning if that was correct given his comments on the company earlier in the day.

Buffy

Hi,

The rules are that I have to disclose in each article if I hold a particular stock, and that I can't write about stocks that I'm short about. So that's exactly what I disclose.

I (embarrassed to admit it!) have a small punt on MOS at the time of writing today's article, so I disclosed it.

I had a small long position in WGB when writing the above article, so I disclosed it in the article.

Regards, Paul.

P.S. I'm not going to get into any arguments over this. I disclose what I have to disclose, and that's it.

It wasn't a criticism at all Paul. Mayn took the anticipated discussion in a different direction. I was just interested to know whether you did have a punt in MOS, as my instinct was that it might be worth one. I didn't pick up from the tone of your report that you would have one;that's all.

Regards,

NI

Seems the Mobile Streams (LON:MOS) rampers and de rampers might be coming out of hibernation - must be Spring. Shares are up 32% today, albeit from a very low base. Mutterings on some of the bulletin boards that things are starting to move in India (must have been the Jalfrazi).

Seen it before and possibly back down again tomorrow

Gus.

In reply to post #125122

Hi Gus,

Yes I also noticed that Mobile Streams (LON:MOS) had woken from its slumber. It's a potentially interesting micro cap I think, so bought more at recent lows, as well as holding on to a position from a while back.

It tends to do spectacular moves up, then comes all the way back down again! Bonkers little stock.

Regards, Paul.