Small Cap Value Report (15 Sep 2016) - NXT, CRAW, FRP, IND

Paul, I wonder whether you have noticed the results from the newly listed Franchise Brands (FRAN). This is an interesting company mostly because of the team running the show- Nigel Wray and the team that developed Dominos Pizza into a giant franchise.
They have now listed this business that runs 3 separate cleaning and repair franchises that seem to be growing very nicely with EPS growth of 18%, net in cash, and even with this growth has a PER of c16.8. No dividends yet, but has promised an announcement on their first dividend in the coming months.
The calibre of the team is what makes this particularly interesting IMHO and the relatively undemanding PER for a quality growing business.

Declaration: I hold FRAN

Paul, Could you ask all your readers to phone the FCA and complain when a pre announcement price move like Crawshaw's points to insider dealing. The number is ......... "Call us on 0800 111 6768 (freephone) or 0300 500 8082 from the UK, or +44 207 066 1000 from abroad. We are open Monday to Friday, 8am to 6pm and Saturday 9am to 1pm." It is only pressure from us that will get them off their backsides!

Sometimes I come across something that I feel is important but don't have the where-with-all to grasp it and apply the knowledge elsewhere. That is where I am with Next (LON:NXT). In their PDF version (graphics etc) http://www.rns-pdf.londonstockexchange.com/rns/8845J_1-2016-9-14.pdf a great deal of useful information is presented especially relating to the online business development and currency exchange rate effect (pages 12-16).

Overall it gives me the impression that they have finally woken up to how important this is but because they are so late to the party their experience has left them short on what exactly to do and how to implement it. At times it reads they are a bit lost and not in total control. Whereas the likes of Boohoo.Com (LON:BOO) appear to have that side of the business banged to rights and Boohoo are concentrating on scaling the business up.

These results from Next provide confidence that it is the likes of Boohoo who are the better investment (in terms of share price) over the next 2-5 years.

I wonder if 2016/17 will be looked upon in years to come as confirmation that high street fashion shops are going the way of traditional butchers ;-)

Paul,
I'm surprised that you didn't cover GFRD results yesterday considering your coverage post-Brexit and purchase therein.
Andrea

Morning Paul.

Thanks for the thorough and timely write up on both Crawshaw (LON:CRAW) and Next (LON:NXT) . Good to see it out so early given the volatility in the two stocks covered. Personally, I didn't think the Next report was too bad - as ever the quality of the information is spot on and I've got used to the rather dour tone of their headline summaries; since the headline is what tends to be reported by the likes of the BBC business coverage, there seems to be a pattern of immediate sell off then claw back on due reflection of the numbers. One big plus seems to be the strength of their online offering if this is the way fashion retailing in the UK is headed.

On Crawshaw (LON:CRAW) not sure what to make of the release, other than it reads like a piece of homework dashed off by someone on the bus on the way into school without too much care or attention. I sense maybe it had to be rushed out early because of news leaking to the market yesterday afternoon. Glass half empty says they're clutching at straws to find excuses for a broken business model. Glass half full says they're on the ball and are adapting the model to continue recent growth success. Falling knife or a bargain?

I've been watching the stock for a while but been put off by the very high premium. For better or worse, I've given management the benefit of the doubt and taken an entry position this morning at a c.50% discount to the price this time last week.

Best,

Gus.

Ricardo (LON:RCDO) are up 10% on strong full year results today.
I gave in to the temptation you resisted in July and bought a few to tuck away so thanks for highlighting them.

In reply to post #150438

Andrea,

Re Galliford Try (LON:GFRD) - I only cover large caps by exception, if there's something particularly topical going on. Plus of course retailers, as that's my sector specialism.

So just because I've mentioned something here once, doesn't mean that I'll necessarily mention it again.

Each day I skim through lots of RNSs, then pick ones to write about here that I think look the most interesting/topical, and which have most potential upside, or downside risk.

I always try cover small cap profit warnings, so we can all learn from them, and identify any read-across to other stuff in our portfolios.

My general theme of buying bombed out housebuilders after Brexit has been very successful, but personally I've moved on now. Other fish to fry!

Regards, Paul.

In reply to post #150450

Paul, I see Fairpoint (LON:FRP) half year report is out today, they report slowdown in housing market and mortgagees.

Crawshaw (LON:CRAW) - Disappointing to see an experienced Chmn like Richard Rose & ex-LIDL CEO issue an RNS that doesn't ring true.
Would have to be much cheaper for me to buy now.

In reply to post #150432

Or email market.abuse@fca.org.uk

"aggressive meat promotions" that sounds very scary!

In reply to post #150453

I think that's the blame for the fall in SP today isn't it? (All the other bad news was known before as far as I can make out). Personally I am not worried about the fall in conveyancing business as I think that will be short-term.