Small Cap Value Report (19 Sep) - NXR, TMMG, ANP, NWKI

Thursday, Sep 19 2013 by

Good morning, and apologies for running a little late today. So, it's a very strong day today again, with the FTSE 100 up almost 100 points at 6,650, driven by strong gains overnight in the US, something to do with the Fed delaying tapering of QE. Surges driven by this sort of thing make me nervous, as today's euphoria could easily turn into tomorrow's gloom, once things reverse. Anyway, as mentioned yesterday, I'm in careful mode at the moment, top-slicing some things that have gone up a lot, and generally playing it safe, as I want to have spare capacity to buy things on the next dip. Markets feel far too buoyant to me, especially in small caps, and it's very hard (but still possible) to find good value.



I see that the Indian overhang in Norcros (LON:NXR) has unexpectedly cleared, and the Non Exec, Vijay Aggarwal, connected with that former major shareholder (Lifestyle Investments PVT Limited) has resigned. This is good news, as it was a big overhang, and has also increased the free float hopefully, although we'll have to wait and see who discloses themselves as the new holders of the shares. Its re-rating continues, with the shares now up to 20.5p, and still cheap in my opinion. Patience has really paid off here, so I'm pleased to be still holding.




Next I am reviewing the interim results from Mission Marketing (LON:TMMG). This one almost made it into my portfolio, and I reported positively on it here on 10 Jul 2013, given that their profits warning on that day looked fairly mild, but didn't get round to researching it in more detail unfortunately. Pity, as it's gone up about 30% since then! I also noted on 12 Jul 2013 that the Chairman had spent almost £29k buying shares, which is useful in restoring confidence after a profits warning.

At the current price of about 29p the market cap is approx. £22m. So, turning to their results for the six months to 30 Jun 2013, the P&L doesn't look too clever, with turnover up 12.9% to £67.6m, but pre-exceptional operating profit down 30.0% to £1,934k. A £1,486k exceptional item wipes out most of the profit, and financing charges of £380k gets rid of…

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Norcros Plc is a holding company for the Norcros Group. The Company's principal activities include development, manufacture and marketing of home consumer products in the United Kingdom and South Africa. The Company's segments include UK and South Africa. The Company has six United Kingdom businesses, including Triton Showers, Vado, Croydex, Abode, Johnson Tiles and Norcros Adhesives, and three businesses in South Africa, including Johnson Tiles South Africa, TAL and Tile Africa. The Company is focused on showers, taps, bathroom accessories, tiles and adhesives. In the United Kingdom, the Company offers a range of bathroom and kitchen products both for domestic and commercial applications. The Company offers mixer showers and accessories; tile and stone adhesives; taps, bathroom accessories and valves; bathroom furnishings; ceramic wall and floor tiles; kitchen sinks; tile adhesives, pourable floor coverings and tiling tools through its United Kingdom and South Africa business. more »

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The Mission Marketing Group plc (the mission) is a United Kingdom-based marketing communications and advertising company. The Company's portfolio comprises integrated, multi-discipline, multi-sector agencies, specialists in specific marketing/communications activities and specialists in particular market sectors. The Company's segments include Branding, Advertising and Digital; Media; Events and Learning, and Public Relations. The mission includes a network of entrepreneurial marketing communications agencies in approximately 20 offices in the United Kingdom, as well as offices in Asia and San Francisco. Its subsidiaries include April Six Ltd, which is engaged in marketing communications and specializes in the technology sector; Big Dog Agency Ltd, which is engaged in Marketing communications, Speed Communications Agency Ltd, which is engaged in public relations, and Bray Leino Ltd, which is engaged in advertising, media buying, digital marketing, events and training, among others. more »

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Anpario plc is a producer and distributor of natural feed additives for animal health, hygiene and nutrition. The Company operates through two segments: UK and Eire, and International. The Company is focused on the manufacture and sale of natural feed additive products to agricultural markets. Its products for the poultry, pig, ruminant and animal feed markets include acidifiers, enzymes, essential oils, pellet binders, antioxidants, mycotoxin binders, mold control products and a range of nutritional premixes and performance enhancers. It offers natural feed additive/flavor called Orego-Stim. It offers its customers a number of omega 3 & 6 supplements for use in feed. Its products in the aquaculture range include growth promoters, immune enhancers and pellet binders for both shrimp and fish. The Company's trading brands are Kiotechagil, Meriden and Optivite, which trade across approximately 70 countries around the world. more »

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  Is LON:NXR fundamentally strong or weak? Find out More »

30 Comments on this Article show/hide all

Paul Scott 19th Sep '13 11 of 30

In reply to post #77421

Hi Clive,

Hmmmm, that's not really what it's all about though.

This Blog is only ever one person's personal opinions - so I'm not infallible by any means, and only have time to have a very cursory glance at most company results. So you really do need to take these as ideas for further research only, that's all they are ever intended as. They're absolutely NOT buy or sell tips. Just ideas for research, to hopefully flag up interesting-looking ideas for people who perhaps don't have time to spend 4-5 hours every morning ploughing through RNSs & interpreting them.

Cheers, Paul.

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Cisk 19th Sep '13 12 of 30

Hi Paul, I think disclosing when you hold / no longer hold a stock is one thing (guess you may have to for regulatory reasons), but I agree with you that it's up to others to time their buys and sells.

Your commentary is extremely informative and always appreciated (even if your view is different to that of the reader!), but it should be no substitute for an investor to do their own research, and they shouldn't slavishly follow exactly what you say (although that would make a good guru screen - take note, Ed!)

Not sure what investor event you went to last night - was it proactive investors hydrocarbons in Mayfair perhaps?

Hearing 4 pitches at the event reminded me how poorly some tiny E&P companies have performed in the past 6 months; whilst they are right in the speculative corner of investing, some (I'm thinking those that already produce) look quite cheap. e.g. Trinity Exploration and Production (LON:TRIN) (not a presenting company yesterday, but an example of share price underperformance, who issued interims this morning) produces circa 4,000 bopd, share price just over 100p, market cap £100m, possibility to double reserves with their drilling programme in the next 6 months etc and the share price has come down from an equivalent of nearly 600p (if memory serves correctly).

And when you scratch the surfce with stocks like this - you sometimes find that production is being held back by temporary issues, when (and if) resolved the share prices could appreciate dramatically.

Not advocating anyone to have a portfolio stuffed with companies like this of course...

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rick 19th Sep '13 13 of 30

In reply to post #77416

You appear to have the balance correct at the moment. i.e. saying you bought or sold (Cohort) or top sliced (Vislink) is helpful. It gives the complete picture.

OK, sometimes if the price then falls (and you are a holder) then it can be painful. But in the long run I think people gain from understanding when you consider a set of results worthy of selling your holding. This is very informative, particularly if you give the reason.

I don't think this should just be a buy side discussion forum. I very much enjoy reading your reports both buys and sells, it is informative and educational.


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HumourMe 19th Sep '13 14 of 30

Hi Paul,

I don't really mind if you say what you are doing, it is interesting though to know what you hold, why you hold them and why you take action. Anything that threatens your frank sharing of information I would vote against. I know from moderating TMF boards in a prior incarnation how careful you have to be.

Sometimes I agree with you, sometimes I disagree but more often I think. Its the latter I value. I personally get much more value from your opinions and reasoning concerning the balance sheet and outlook. Only last week a company (ISG) persisted in getting through my filter (forcing me to evaluate it) and today your prior comments about its wafer thin margins resulted in me tweaking the filter to eliminate it and others like it. Far easier than actually taking any action :)

Seriously, I'm in the camp of give a man a rod and he'll snap it into kindling to cook the fish someone else gave him and he'll be able to catch his own fish, possibly sharing in the future. 

I also like the fact that you are relaxed about the timekeeping. I'm often several days behind in reading your comments and have learnt to not make hasty emotive decisions, so the more you stay away from the 'instant' response, which is almost de rigueur in most social media and news, the more comfortable I am! 


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cig 19th Sep '13 15 of 30

In reply to post #77416

I think you should disclose your sales, if only for consistency: either disclose nothing, or disclose both. Disclosing only one side makes you open to criticism you manipulate the other side -- even if we know you don't!

Besides I suspect non-disclosure wouldn't remove all complaints, these people would probably still find a way to blame you for talking "positively" or "negatively" about a stock (see Quindell Portfolio!) or blame you for imaginary trades (if you don't disclose, you can be blamed for holding something you don't).

Also, once disclosed, people can just shadow you if they really think you move the market predictably. Even if it's not what you want them to do, the option is there for them, so they have no ground for complaint: either they're right and they can laugh all the way to the bank, or they're wrong and there's no reason to whine in the first place.

To people like StopLossSue, simply tell them that, as you've noted yourself many times, your sales are often too early, so in some quarters they are highly regarded as a bullish signal. For instance, you told us you sold Begbies Traynor (LON:BEG) due to impatience back in May, which reinforced my conviction it was good to hold (I may have got in or added to it had I not been on a full allocation already). It's up 20% since.

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Fangorn 19th Sep '13 16 of 30

Hahaha classic. Those moments are always awkward - great that she took it so well.

I concur on the unreasonableness. It seems that many these days are quick to take their investment frustrations out on the person that gave them - they also tend to have far shorter time horizons which often increases the chances of the aforementioned disappointment occurring.

Enjoy the daily updates - and your insights into the small cap sector are appreciated.

Ah the Pump and Dump brigade. Yes, I'd go further than your "It's just plain dishonest" and have the perpetrators walked through the streets of London with a placard saying such stapled to their chest and back! :)

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NS23 19th Sep '13 17 of 30

In reply to post #77416

Hi Paul,

I'm quite new to this investor m'larky and I really enjoy reading your daily thoughts. It is much more useful to hear why you like some stocks/scenarios and stay away from others. IMO it's then up to the individual to determine whether they feel the same and want to put their money in (after doing their own research of course!). This is soooo much better than the yells of 'Buy Buy BUY!' that a few other bloggers seem to churn out without giving much explanation of why...

One thing that certainly comes across in your blog is an honesty and openess about your thoughts, your holdings, your mistakes... I was quite surprised that it was like this and is the main reason why I'm a daily reader.

Sure, it might be great having your recommendations but if i follow them all then i'm basically having someone else manage my investments and it would be easier for me to just invest in the fund that your provide research to...

Keep up the great work, we appreciate it

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Just 19th Sep '13 18 of 30

Hi Paul,

I agree with Cig, I think it’s important to update readers with sales and reasons for those sales. The information you provide on here is invaluable and gives novices like myself a much better understanding and chance of survival! I’m sure “StopLossSue” started out with some help and guidance!

That said, if top slicing you obviously still have confidence in the stock and understandably wouldn’t want to cause a loss of confidence in that.

Thanks for all your hard work here Paul, it’s very much appreciated.

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Chrisfarrell21 19th Sep '13 19 of 30

To change the topic slightly, I've just been doing some digging on 21st Century Technology (LON:C21) and in particular the investor who bought over 4% the last week. The chap is John Watkins, who appears to be the now Executive Chairman of Trakm8 Holdings Plc Trakm8 Holdings (LON:TRAK) ( It has complementary products to 21st Century Tech in the rail market, and he had this to say in the final results announced on 1 July 2013:

"With its strong balance sheet, good cash generation, and robust business model Trakm8 is in a position to consider augmenting growth through selective acquisitions alongside its current organic growth strategy."

This could just be a private investment or it could be a prelude to something more interesting.

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Jardine 19th Sep '13 20 of 30

In reply to post #77416

Hi Paul

I'd much prefer you said when you are buying and when you are selling and the reasons for those decisions, just like you do at the moment. Then it is up to the individual reader to decide whether they act in unison with you or not. When you are commenting on a share it helps to know when you are "in" and when you are "out".

Good meeting you on Monday and hope to continue our conversation on roll-out formulas another time.

Regards, Andrew

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kevanp 19th Sep '13 21 of 30

Paul, just to add my voice: every now and then you come across an investment commentator whose analyses and opinions just seem to make sense.

That's how I feel about you. There are no black and white decisions in investing, and anyone who thinks otherwise is a fool. But your experience in analysing financial reports, and your personal interpretation, based on what is important to you, I find really helpful in arriving at my own decisions.

I am perfectly happy with the level of information you provide about your own holdings. It's just one more piece of the jigsaw.

Keep up the very good work.


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Paul Scott 19th Sep '13 22 of 30

In reply to post #77426

Hi Andrew,

Thanks for your comments, very interesting.

I'm also wondering about talking to the boss (Ed) about timing, as having to do morning reports means I can't really take holidays. So I'm wondering about maybe taking the odd week off, when I do an evening report of the days news, which would give more time to digest & think, rather than rushing through a tidal wave of news every morning.

On the other hand, deadlines & some adrenalin really get the motor pumping, and it is nice to be able to take the foot off the gas at 11am, and have a kip on the sofa!

Anyway, bottom line is that most people seem to like my output, and I really enjoy producing it, so let's keep going!! I'm very grateful to Stockopedia in giving me a platform to hopefully put out useful stuff.

Cheers, Paul.

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Cleeve 20th Sep '13 23 of 30


Interesting comments on both sides. I personally think the more information the better. Take helphire its up around 50 odd percent since you bought in, is that one for top slicing or is it the market re-rating itself? I bought Smiths news and sold 80% when the shareprice doubled now its doubled again so clearly I sold too early, so there is a scenario to keep adding as share prices tend to re-rate themselves over time. I bought Anpario at around £1 however the reason why I bought the share has not changed so should I top slice, or should I add more now others are seeing the story behind the share? I know that you can't answer these questions but I am just giving scenarios.
I like to know what others think, even if its wrong, so for example, you saying "I sold 50% of my shares in stock X as it has moved up 40%" or "stock y is falling for no apparent reason so am adding as it comes down" (maybe ZIOU or VNET are good examples). If a new investor goes to your stock pick excel sheet could they look at it and buy the shares and not know that you have already sold a percentage of your holding.?
I agree you are not a Tipster and DYOR is vital but on balance I would much rather know how you are currently thinking rightly or wrongly as if I were an investor in a stock that you top sliced it would make me look at my reasons for investing again.
Many thanks for all your thoughts and analysis far better than most of the rubbish one reads in the financial magazines!!

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Katewarren 21st Sep '13 24 of 30

I have been reading your reports Paul for about 3 weeks and I'd say you've got the balance right. I have created a "tips from Paul" page on my IPad..........but it does't include any stocks ! It is simply snippets of what you look for (positive and negative) from Financial Reports. For me, you are source from which I can learn and improve my own skills when it comes to reading Company Reports. We all make mistakes, and ultimately, we learn from those mistakes. Those investors out there who want to follow buy/ sell recommendations lack confidence, and perhaps are looking to make big profits quickly and avoid losses ! It is much more satisfying when you DYOR and buy on that basis.

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steveross2112 12th Oct '13 25 of 30

ANP, your EPS query, no one offs. They had quite a lot of carried forward tax losses. Tax charge will increase I.e they will have to start paying some. That won't be all the 3p difference in your eps figure vs consensus but some. What I like is the degree of operational gearing they have. A good stock, and good people.

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lightningtiger 16th Oct '13 26 of 30

I am new to this stockopedia and still finding my way round it having made a few blunders on the way. I have and still do use stop losses.Hello Stop loss Sue. When to sell seems to be one of the most difficult things to do. We cannot be right all the time. I have held ARM for many years both top slicing it, selling all & buying back again. The stop loss works well for me. When it hits the mark sell it & get out. Drummed into my head is cut your losses and let your profits run. If you can double your money & sell, well done, leave a bit for someone else. I did that with OXIG this year, & re invested into CLIN & ASOS , Having sold a big chunk of TEP (that has doubled for me as well) as well, to do this with. There is plenty of fish in the sea. Have I done the right things? Looking back I could have left ARM alone and just added to it as time went on & left TEP alone & not had CLIN & ASOS , but TEP did breach the stop loss. The director Wigidor , of TEP has never sold any TEP shares since he started the company. It is all buy, buy, buy. The key to his business works. In a nutshell .......Do you want to save money? or do you want to make money? This system over the years works consistently well for him.There is safety in numbers, & for me has done well. You can look at these screens and say yes but, what if etc. At the end of the day we have a choice. Look at PTO, can this still keep going up at this rate of knots? If in doubt ,leave it out. On my travels around Stockopedia I noticed OPAY last night had one company of the year award. So today I have done a third increase to my holdings in OPAY. It still looks good to me, but I might be wrong. My tip ,Buy on an up, sell on a stop loss, if in doubt leave it out. I could not believe all the chat with SOCO! It, is not my kind of share. My preference is tech stocks and pharmaceuticals generally, but you may well prefer something else. Hope this is of some help to some of you. I have sold my Royal Mail shares ,but you can still buy or sell if you want to. Have I sold to soon? I am happy with the profit. Cash is king .'Had a look at a lamborgene (spelt wrong sorry) today second hand for £118k. any discount for cash? £1000 only, so no deal. The new one over£300k I think. Anyway my Hyundai is more comfortable.
Cheers from Lightnintiger

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rhomboid1 16th Oct '13 27 of 30

In reply to post #78167

Hello lightning tiger

I don't wish to be rude but I've got to ask , are you a creation of some post modern comedian?

Think Al Murray or Borat.

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lightningtiger 17th Oct '13 28 of 30

No that is the truth, the garage is in Pangbourne Reading Berkshire. From a practical point of view that sort of car is not for everyday use & is difficult to get in & out of. Who in the world is Al Murray or Borat?
Cheers From Lightningtiger. Anyway it is only a car.

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Paul Scott 20th Oct '13 29 of 30

In reply to post #77455

Hi Cleeve,

I'm constantly adjusting my portfolio, so it's safe to assume that if a share I hold has gone up a lot, then just assume I will have top-sliced some of my holding, as that's what I normally do in order to keep my portfolio weightings right (i.e. not to become too overweight in a stock that has gone up a lot).

I'm not going to get into publishing a blow-by-blow record of exactly what I buy & sell, and when I do it, as then some people will just slavishly copy those trades, and the point is we're trying to encourage everyone to Do Their Own Research, not blindly follow tips! Also I find that level of detail into my own financial business too intrusive.

As regards the daily reports, I'll always disclose in every report if I have a long or short position in a stock, and will always tell it like it is, as regards that stock - it never even enters my head to skew the commentary according to what I might be planning to do in terms of buys & sells, I just don't think like that, and in any case have not seen any evidence that my reports move share prices anyway.

So my reports will continue to shoot from the hip, and try to cover the good & bad points as I see it in terms of every company. The litmus test is this - I'm often critical of companies that I hold stock in, which can't be said of many commentators - most people relentlessly pump their own stocks, whereas I at least try to be even-handed, although obviously if I hold a stock then it stands to reason that I like the company, or I wouldn't hold any stock in it!!

Also, you've got to remember that all my commentary is free, not a paid-for service, so it's just presented warts & all!

Cheers, Paul.

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lightningtiger 20th Oct '13 30 of 30

I am always looking at companies and try to see why they are successful. Regarding the garage trying to sell me an expensive car, I noticed H R OWIN on the number plates. From that the actual company is HRO , a franchising operation, and the shares are still going up. Someone has recently bought over 50% of the shares , so yet another opportunity for someone to look at.
My local garage owner was also at the expensive Owin dealer & he does the MOT's for them & said "It's only another car" , & he is right. For him another MOT for £40.00 irrespective of the car price. This Norcross looks good to me, but my problem is how many stocks do you hold in a portfolio? I am holding 20 at the moment, and wonder if that is too many. The reason for that is safety in numbers. Weightings are another thing I have been juggling with, trying to catch the timing right.
Some interesting figures from my favourite 700 club comes 4684 letters, 6338 telephone calls, 167,985 tex messages, which seems to signify not so good news for Royal Mail shareholders. Also available from the club this month is a CD discussing money & how we should live. I know I am not supposed to advertise, but joining the club is the best thing I have ever done. For £15.00 you can get one if you want to. Some more lifesaving figures. 13,858 water wells have been dug and operational throughout the world for people with no fresh water. Food & shelter provided from disasters from 5,514,467 people. Regarding value, with only 3 trades last week my commission charges were £53.06 including in that figure is £17.21 stamp duty tax. Now assuming we all pay income tax, any money that goes to the club gets an immediate 25% gain on it because of gift aid. Can we afford that £17.21 tax?. we have to pay it unfortunately. That same £17.21 gift aid becomes immediately £21.51,and does a load of good. Another tip from the club was dividends and where to get the best returns. With a bit of time researching I managed to get 7.9%, which is better than The Royal Mail I think? Based on the figures loads of people are communicating with e-mail & telephone, the telephone comes out with more usage. From the stockopedia ADT,my first stockopedia trade looks good for me. We have a choice, buy sell or leave it. Again from the club comes information where the best tech stocks come from. With Stockopedia I have just come across what I am looking for. Sometimes you have to act fast, but I always like to do some research first. For me there is too many red screens in the oil sector currently. Information for the club is accessed via my profile.
Cheers from Lightningtiger

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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 on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »


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