Small Cap Value Report (19 Oct 2016) - MOTR, FOXT, HOTC, ONEV

Wednesday, Oct 19 2016 by
70

Good morning!

CEO/FD Interviews

I've decided it's time to do another batch of audio interviews, with CEO/FDs of interesting small caps. I'm generally doing them free now, as I think charging a company creates a conflict of interest. Also, as questions are sourced from the private investor community, then the questions are genuinely independent. All of which makes for interesting & unique interviews.

I'll usually (but not always) hold a position in the companies concerned, or at least will be considering taking a position. Otherwise the company wouldn't be of interest to me, and hence I wouldn't want to waste mine or their time doing an interview in the first place.

The interviews are a good way for me to learn more about a company, so why not publish it, and let everyone listen in? People seem to like them, so I'll try to find the time to do more of them.


Begbies Traynor (BEG)

(at the time of writing, I hold a long position in this company)

My next interview is with Ric Traynor, of £BEG . This is an interesting one, as it's the UK market's only listed pure play insolvency practitioner. I am wondering whether sterling weakness, Living Wage, and various other headwinds might tip the UK into recession next year?

With this in mind, I thought that Begbies could be a good hedge for my longs, as theoretically it should benefit from a recession. Although that's what people thought in 2008, but ultra-low interest rates prevented the wave of insolvencies that was expected.

I'm looking forward to asking Mr Traynor what he thinks about the outlook for the UK economy, impact of Brexit/sterling, etc. Should be interesting. So I need some questions please!

This is the link for submitting your question for Begbies, through an online form, which collates them all into one place for me, saving lots of time. The deadline for questions is midnight of 23 Oct 2016, as I'm conducting the interview on the 24th. Please don't put questions in the comments section here, as that messes up my system.


Staffline (STAF)

(at the time of writing, I hold a long position in this share)

This interview is a bit further out - I'm interviewing Andy Hogarth, CEO of Staffline, on 9 Nov 2016. So please submit your questions (deadline midnight of 8 Nov 2016) using the form here.

Staffline shares have sold off heavily, and now look…

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As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


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Motorpoint Group plc is an independent vehicle retailer in the United Kingdom. The Company's principal business is the sale of vehicles, of which are approximately two years old and which have covered over 15,000 miles. The Company sells vehicles from brands representing vehicle sales in the United Kingdom, with models from Ford, Vauxhall, Volkswagen, Nissan, Hyundai, Audi and BMW. The Company operates from over 10 retail sites across the United Kingdom. The Company has a national contact-center dealing with online enquiries. In addition to sales of vehicles, the Company operates Auction4Cars.com, a business to business online auction platform for vehicles. The Company also offers ancillary products to customers, including customer finance packages, vehicle guarantees, insurance products and vehicle protection treatments. more »

LSE Price
222p
Change
2.8%
Mkt Cap (£m)
216.4
P/E (fwd)
10.9
Yield (fwd)
3.0

Foxtons Group plc is a United Kingdom-based company, which operates as an estate agent. The Company and its subsidiaries are engaged in the provision of services to the residential property market in the United Kingdom. It operates through three segments: Sales, Lettings and Mortgage Broking. The Sales segment generates commission on sales of residential property. The Lettings segment earns fees from the letting and management of residential properties and income from interest earned on tenants' deposits. The Mortgage Broking segment receives commission from the arrangement of mortgages and related products under contracts with financial service providers and receives administration fees from clients. The Company offers its residential property sales and lettings services through its network of approximately 60 branches. It offers independent mortgage advice and other related services through Alexander Hall. It offers corporate services, property management and other services. more »

LSE Price
80.2p
Change
1.4%
Mkt Cap (£m)
217.6
P/E (fwd)
25.5
Yield (fwd)
1.7

Hotel Chocolat Group plc is a chocolate company. The Company is engaged in manufacturing and retailing of chocolate in the United Kingdom and overseas. The Company operates in three areas: the United Kingdom, Europe and Rest of World. The Company offers chocolates under the brand, Hotel Chocolat. The Company sells its chocolate direct to customers though subscription, online and its approximately 83 stores. The Company's product ranges include self purchase, gift and occasion, rare and vintage, and other. Its product types include boxed chocolates, luxury boxed chocolates slabs and batons, enrobed fruit and nuts, chocolate hampers, ribbon bags, wine and spirits, hot chocolate and cocoa cuisine. Its chocolate types include dark, milk, white, bean to bar, boozy, caramel, cocoa gin, coffee, fruity, marzipan, mint, nut, patisserie, praline and truffles. The Company owns a cocoa plantation in Saint Lucia called the Rabot Estate. more »

LSE Price
327p
Change
1.4%
Mkt Cap (£m)
366.7
P/E (fwd)
32.6
Yield (fwd)
0.8



  Is Motorpoint fundamentally strong or weak? Find out More »


37 Comments on this Article show/hide all

purpleski 19th Oct '16 18 of 37
1

In reply to Fangorn, post #11

HL being quoted is reassuring. You can certainly deal in US and Swiss stocks with HL as I have done not sure about the others. And certainly HL is better for funds. Both front ends of their platforms leave a lot to be desired.

Pretty certain I will move across to HL.

Kind regards

Michael

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purpleski 19th Oct '16 19 of 37

In reply to Fangorn, post #17

Not particularly concerned with eggs in one basket where HL is concerned more with:

- costs
- quantity of marketing material!!
- getting use to platform

What other online execution only brokers do people use?

Thanks

Michael.

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Fangorn 19th Oct '16 20 of 37

In reply to purpleski, post #18

I use IG group as well...

Tempted to split my TD account - move the ISA to HL, Trading Account to IG.

I prefer the IG platform to the HL but ultimately don't trade that much...odd speccy spreadbet, otherwise it's LTBH mainly for me.

Suspect IG has a wider global stock remit

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purpleski 19th Oct '16 21 of 37

Thx. Will look at IG as well.

Michael.

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NCarbarns 19th Oct '16 22 of 37

Does the IG platform support OEICS/Unit Trusts or is it just shares?

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laurie 19th Oct '16 23 of 37
2

I’ve used Interactive Investors, TD Waterhouse and Hargreaves Lansdown for years. I haven’t had trouble with any of them, although HL’s customer service has been especially user friendly.
Interactive’s pricing model is often the least expensive. They charge £80 a year for a NISA, and £10 per trade. This includes 8 free trades a year and no platform fees for holding Unit Trusts. HL’s platform fee is .45% and £11.95 for share trades (funds free). Both fee structures have a use.
Do note that Interactive offers spread betting, too, which is an added financial risk as far as the safety of your money is concerned.
From Interactive’s website:
Please note that the Interactive Investor Share Dealing Service is operated by Halifax Share Dealing Limited, which is part of the Lloyds Banking Group, under the Interactive Investor brand. Halifax Share Dealing Limited provide the clearing, settlement, custody and brokerage services to you.
Interactive Investor plc and its group of companies are registered in England and Wales (registered number 4752535)

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jonthetourist 19th Oct '16 24 of 37

Share Centre are quoted, well-capitalised and very helpful. No concerns and a satisfied user.

Jon

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investimouse 19th Oct '16 25 of 37
2

I looked at Motorpoint (£MOTR) about a month ago and decided against them - not for any financial reasons but because they are mainly a web business, I thought I'd check TrustPilot. Their reviews are mind-blowingly bad! https://uk.trustpilot.com/review/motorpoint.co.uk
Put me off instantly - lucky escape I think.

I was with iii but they massively increased fees a few years ago so moved to iWeb. Less frills and frippery but better costs and always helpful.

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ROGraham15 19th Oct '16 26 of 37
2

Paul, I like your reports very much but I have two requests
1. Please consider stating every Company if it is an AIM share as I am investing in them for Inheritance tax relief as I am 87
2. Many of the shares you review none of would wish to invest in. Could you comment on Tristel and Fevertree when there is any news from ???

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JohnEustace 19th Oct '16 27 of 37

My SIPP is with HL and I have US, Canadian, and European shares in my portfolio. They don't seem to support Asian shares. My only gripe would be that the exchange rates are not good at all when buying and selling foreign shares so you need to be looking at longer term holdings as opposed to trades. As others have said they are best for funds with no dealing fees. Their customer service is good with intelligent helpful people answering the phone which I am happy to pay a bit of a premium for as opposed to chasing the cheapest provider.

I also have an ISA with Halifax Share Dealing and am happy with them. Their user interface is a bit dated but the ability to trade North American and European shares is there also and I have stayed with them out of a combination of inertia and not wanting all my eggs in the HL basket.

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LongbeardRanger 19th Oct '16 28 of 37
1

I use HL and Halifax Sharedealing, both of which are fine. The HL interface is better and HL seem to have better service (though my needs have been quite basic as I don't trade in exotica and am almost exclusively a buy and hold investor). But overall both fine.

I have recently opened (but not yet funded) an IG stockbroking account which I am planning to use to buy North American shares (both US and Canadian) as IG offer more competitive forex rates. The service seems excellent so far, but obviously I haven't tested it in anger yet.

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RichardK 19th Oct '16 29 of 37

I use iDealing.com (£10.03/trade), Beaufort Securities (£8/trade) and X-O.co.uk (£5.95/trade). Not sure about management charges off hand, but one onerous. X-O is owned by Jarviis which is AIM listed.

All OK but X-O a bit slow at times. I am though a simple buy and hold investor with just standard and ISA accounts - nothing fancy. Not had any difficulty buying foreign stocks but only have a few.

Thank Paul for your suoer reports. They are compulsory (and compulsive) lunch time reading.

Richard

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RichardK 19th Oct '16 30 of 37

In reply to RichardK, post #29

I meant 'none onerous' in my previous post.

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Samsgrandad 19th Oct '16 31 of 37

In reply to purpleski, post #19

I use Jarvis Investment Management's Sharedeal Active very good service at £9.50 a trade.

http://www.sharedealactive.co.uk

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gus 1065 19th Oct '16 32 of 37
5

Hi Paul,

I think you are being remarkably charitable to Motorpoint (LON:MOTR) and their advisers in your write up. The performance in the few months since the IPO seems a million miles away from that indicated in the prospectus forecasts. The UK motor retail sector generally seems to be in a bit of a funk with investors at the moment despite many ( Vertu Motors (LON:VTU) Cambria Automobiles (LON:CAMB) Inchcape (LON:INCH) Lookers (LON:LOOK) etc) coming out with decent results in the recent past so no surprise Motorpoint got caned today. Also, as a pure retailer they presumably have neither the higher margin ongoing service business nor the asset backing of substantial show-room freeholds so it's no surprise they are under pressure. Given the country mile between what was promised and what has been delivered since the IPO I'm not sure I would be rushing to them for my next second hand car. Definitely looks like this one was clocked before sale!

Best,

Gus.

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purpleski 19th Oct '16 33 of 37

In reply to laurie, post #23

Thank you Laurie.

KR
Michael.

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doug2500 19th Oct '16 34 of 37
1

In reply to laurie, post #23

Are you sure you're up to date on this? I thought II swapped from HSDL to their own platform a couple of years ago and I couldn't find anything in their t & c's saying Halifax operated things. I'm happy to be corrected though.

I've just left II so I'm not exactly delighted about the news, although at least the transfer out of TD will not attract fees.

FWIW I really didn't like II's quarterly fees, or their inability to produce a tax voucher for months after the year end, and finally I felt they were slow and disorganised during the transfer out, although given each broker blames the other one it's hard to be positive about the culprit.

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laurie 19th Oct '16 35 of 37

In reply to doug2500, post #34

Greetings, Doug,

This is where I found the information about Halifax operating Interactive's service: http://www.iii.co.uk/sharedealing/privacy

I assumed that it was accurate. Halifax operates iWeb's service, too.

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doug2500 19th Oct '16 36 of 37

In reply to laurie, post #35

Hi Laurie,

That seems quite clear. I hadn't looked at the privacy section.

I'm not sure what happened a couple of years ago then, maybe they went from their own system TO HSDL? Anyway it caused me to loose all my previous history which was a bit of a pain.

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gus 1065 19th Oct '16 37 of 37

For an initial trawl through the various fund platforms, you might like to take a look at the "Compare Fund Platforms" site. There is also quite a useful write up describing what fund platforms do and some of the features that may be offered. Here is the link:-

http://www.comparefundplatforms.com/

I can't vouch for its accuracy or comprehensiveness but of the platforms I have looked into it appears to be there or thereabouts as an indication of what they provide and charge. Likewise, I don't know its provenance (e.g. whether it is sponsored) so please use it with care and do your own due diligence. Any comments welcome.

Best,

Gus.

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About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for Stockopedia.com on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »

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