Small Cap Value Report (17 Mar 2017) - GYM, STHR, IKA

Hi Graham

Just wondered why the Stockopedia Quality rating has jumped from 54 in your report on 12 Jan 17 to 87 now?
Seems a lot to me. Many thanks.


Roly

In a former life I had some involvement in the Bridges Ventures private equity fund which has now disposed of its holding in GYM (LON:GYM), so I can shed a bit of light on their motivations for selling.

The fund started life in 2006 and the intention was always to last for around 10-11 years. As such it has been in wind down mode for some time now with the intention being to have wound down completely by mid 2017. This is in line with the timing of yesterday's disposal so I don't think they have concerns for the future prospects of the business, or at least if they do this is not their primary motivation for selling.

As it turns out, they've sold their final holding at a lower price than they could have realised if they had sold out entirely at the IPO, but they will have multiplied their original investment something like 6-fold so fair play to them.

Hi Graham - Re. GYM (LON:GYM) After my note of yesterday and after taking a long position, there is a placing and the SP drops some 7%.
Never underestimate Donald Rumsfeld's "Unknowns-Unknowns" to trip you up.

Didn't a similar bookbuild sale happen with OTB, and they have since risen above it. Glad I didn't jump into GYM after reading the results and report.... but now watching the price still drift with interest.

Re IKA, I think a Stockopedia rating of 3 says it all

In reply to post #176142

Many thanks for your insight, bestace

Cheers

Re GYM : I have read some very positive reviews of their gyms from happy gym members . Their gyms appear to be busy and well supported . Not been into one myself . Added today on the fall at 172p . Comments from Bestace explain the share sale so this should recover in time provided the business continues to grow profitably as of late

Graham,

Out of interest how many stocks do you hold in your portfolio on average ?

No issues if you prefer not to disclose

Thanks Andy

In reply to post #176172

Just for the avoidance of any doubt, it should be noted there were two private equity funds selling out yesterday and while I may know a bit about Bridges, I don't have any insight into the motivations behind the selling by the other fund, Phoenix Equity, who I think had a bigger shareholding than Bridges.

In reply to post #176136

Hi Roly. I presume the full year results, changing broker forecasts and share price all contributed.

Cheers

Graham

In reply to post #176178

Hi Andy. It varies, historically I've nearly always held less than 10 and often around 6-7, but I'm probably going to start diversifying now with a few more 1%-2% positions where I have less conviction but still want to be involved. I think what matters most is the size of the biggest, high-conviction positions.

Regards

Graham

In reply to post #176184

Thanks

on GYM (LON:GYM), as of yesterday 82% of the shares are held by the City(one of the highest in the LSE) , I am guessing that as some of these unwind their positions then there is potential for price dislocations given the average daily volumes are around 100K . 

In reply to post #176202

dscollard,
Where did you get that pie chart from? I'd be interested to have a look at some of my holdings major shareholders in this view.

Thanks,
Joe

IC has a concern about a PE of 41 and competition risk and has it as SELL.. IMHO barriers to competition are low, clientele renewals uncertain and I cannot see any USP.

i agree that Ilika (IKA) is the bluest of blue sky stocks and I find it too uncertain to get into my portfolio, but I also recognise a certain guilt about that.
This is is exactly the sort of technology pushing company that Britain needs to see succeeding on a world scale. It will take patience, a lot of capital and no small amount of luck but it would be wonderful to have it lead a large new wave of battery technology.
But I strongly suspect that if it does fund its footing and start to grow fast it will become a willing seller to an overseas buyer long before it reachs its full potential. I understand that founders and early backers have to have nerves of steel to turn down attractive deals. But I regret it and it reinforces my concern that even if I decided to take a huge risk here, as a small holder, I would be taken out long before I enjoyed the gains that go with an Amazon or a Facebook.
So I don't invest, and just hope that they can prove my decision disastrously wrong

In reply to post #176208

Hi Joe,

I am not dscollard but the pie chart is from Sharepad, who I subscribe to alongside Stocko. Both are great services and I feel complement each other well.

Richard

I'm a bit confused. Doesn't the pie chart show the top shareholders increasing their holdings?

In reply to post #176265

the pie charts show changes over the past 3 months. recent RNS's show selling in the past few days.