Small Cap Value Report (23 Sept 2015) - RGS, GBO, PTO, BEG, WAND, PURI, ECK

Wednesday, Sep 23 2015 by
39

Good morning!

Due to computer problems, yesterday's report ended up taking me most of the day (I lost a large section and had to re-do it). So in case you missed it, here is the link, to where I looked at Regenersis (LON:RGS) and Pittards (LON:PTD), in addition to earlier comments about Boohoo.Com (LON:BOO)

The market so far today has that feeling of a crisp autumn morning, immediately after a big storm - a few bargain hunters are emerging from their battened down hatches, to be the first to collect up some of the debris from the storm!


Regenersis (LON:RGS)

Director buying - a couple of readers thought my comments on the Directors of Regenersis yesterday were a bit harsh, which on reflection they probably were. My main point is that they've been extremely shrewd in loading up with cheap shares at the right time, and dumping a large chunk of them a few months before things started to go wrong.

So, when you see Directors with a track record of timing entry/exits uncannily well, then it pays to take notice of what they are doing with their own money. Sure enough, and on cue, a decent-sized Director buy has been announced today.

Hanover Investors (the key shareholder in Regenersis, connected to  Chairman, Matthew Peacock, and one of the NEDs) has increased its stake by 200k shares, to just over 5.4m shares (6.9% of the total).

As a general point, the only exception to when to follow Director trades (in my opinion), is immediately after bad news. Since, with many companies, such purchases are nearly always just done for PR reasons, to reassure shareholders. Often such purchases only stabilise the price for a day or two, before continued falls.

That's not the case here. As I explained in yesterday's report, Regenersis is starting to look interesting again, as the rather unimpressive, low margin electronics repair division looks set to be disposed of. That would then leave a higher margin, smaller business focussed on data erasure software, which Regenersis reckons is a good growth area.

I really hope management twig that "less is more" with the future accounts. The ridiculously over-complicated reporting, and incredible adjustments to the accounts, should be ditched. Instead I think investors would…

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Blancco Technology Group Plc, formerly Regenersis Plc, is a provider of mobile device diagnostics and secure data erasure solutions. The Company's segments include Erasure and Diagnostics. The Erasure segment focuses on development and delivery of solutions, and includes Blancco, which provides erasure software; SafeIT, which is engaged in cloud and networked data erasure business, and Tabernus, which is engaged in providing software erasure products. The Diagnostic segment includes Xcaliber Technologies, a smartphone diagnostics software business. Its secure data erasure solutions include Blancco Management Console, Blancco Cloud, Blancco File, Blancco 5, Blancco Mobile Solutions, Enterprise Erase E800, Enterprise Erase E2400, Enterprise Erase Mobile and Ontrack Eraser Degausser. Its mobile diagnostics solutions include fault diagnostics, repair and program enablement. It serves manufacturers, financial institutions, healthcare providers and government organizations across the world. more »

LSE Price
106.5p
Change
 
Mkt Cap (£m)
68.1
P/E (fwd)
32.5
Yield (fwd)
n/a


Ingenta plc, formerly Publishing Technology plc, is a provider of content management, advertising and commercial enterprise solutions and services to publishers, information providers, academic libraries and institutions. The Company's segments include Commercial products, Content products, Vista and Publishers Communication Group (PCG). Its Commercial products consist of Ingenta Product Manager, Ingenta Rights, Ingenta Royalties and Ingenta Order to Cash (OTC). Intenga Advertising is a browser-based multimedia advertising, customer relationship management (CRM) and sales management platform for content providers. The Ingenta CMS platform is a hosting solution. It also offers Ingenta CMS GO! and Ingenta Connect. Ingenta E-commerce manages business models. PCG is a sales and marketing consultancy. Vista provides services to support the heritage author2reader publishing management system. Content products help content providers sell their content online. more »

LSE Price
117.5p
Change
 
Mkt Cap (£m)
19.9
P/E (fwd)
n/a
Yield (fwd)
n/a



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20 Comments on this Article show/hide all

kevanp 23rd Sep '15 1 of 20
1

"The market so far today has that feeling of a crisp autumn morning, immediately after a big storm - a few bargain hunters are emerging from their battened down hatches, to be the first to collect up some of the debris from the storm!" Poetry, bloody poetry.

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Gostevie 23rd Sep '15 2 of 20
4

Hi Paul,

I will donate £5 to a local charity for the first person who can tell me how many times WAND uses the capitalised term "Big Data" in this announcement!

27 capitalised "Big Data" and one lower case "big data". :-)

Gostevie

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Paul Scott 23rd Sep '15 3 of 20
4

In reply to post #106949

Thanks Steve!

27 times that WANdisco (LON:WAND) mentioned Big Data in one RNS - how completely mad! That surely must be the most blatant attempt to latch onto & over-use a buzz-phrase in order to promote the share price, that I've ever seen.

I will donate £5 to the girl in my local sandwich shop, who's doing a sponsored month off alcohol in October, I'll let you know what the charity it's for! Her Dad told me that it would "nearly kill her" to go without for a whole month, so it seemed a good challenge, and one that I do myself each Jan (and sometimes Feb too).

Thanks again,
Paul.

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cig 23rd Sep '15 4 of 20
8

Why doesn't Globo (LON:GBO) buy back their own shares instead of new companies? If the numbers are accurate, they're unlikely to find a better deal externally!

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LancashireLad 23rd Sep '15 5 of 20

BEG In addition to its sometimes illiquidity, the spread is 10%+. I agree, long-term, probably worth a punt.

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herbie47 23rd Sep '15 6 of 20

In reply to post #106956

It is high but not quite that much, its about 6% at the moment. Although in thin trading or bad news I'm sure it will increase.

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Splode 23rd Sep '15 7 of 20
2

At its present size I do not think Globo (LON:GBO) can compete in the global space it wants to play in and its cash pile is nowhere near sufficient for its ambitions. The company needs much more money to achieve the land-grab it needs before it gets left behind in its fast-moving space. I do not know whether the company will be able to acquire the resources it is targeting or has the skills to integrate its targets. I do not think anyone knows.

Globo’s Interims next Tuesday will be interesting to review. I am not sure its two pre-announcements this month have been encouraging.

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Paul Scott 23rd Sep '15 8 of 20
1

In reply to post #106962

Re wide spreads - do bear in mind that the real spread is often inside the quoted spread. So if you ring up your broker to ask what the price is on the RSP (the invisible [to us] trading system that brokers use) you often find that the real spread is actually a lot narrower than the quote prices that we see.

If you don't have a telephone broker, then putting in a dummy trade on an online dealing platform will show you the RSP price - shown as a saving that the broker can achieve for you.

So very wide market spreads need not necessarily put you off, as there could well be orders inside the spread that only your broker can see.

Regards, Paul.

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herbie47 23rd Sep '15 9 of 20

In reply to post #106965

Thanks Paul, yes I realise that, I based my prices on actual traded prices, ie BEG was 44.5p to buy, 42p to sell. So about 6%, depends on size of deal though. Quoted spread is about 8% today.

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mrwhits 23rd Sep '15 10 of 20

28 times....

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ericb 23rd Sep '15 11 of 20

The WANdisco (LON:WAND) bloke was on share radio this morning comparing it to oracle when that was just starting out - game changing technology and industry challenging opportunities etc.
Makes the Blur (LON:BLUR) geezer Letts sound like Sir John Harvey Jones .......

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Paul Scott 23rd Sep '15 12 of 20
1

In reply to post #106966

@Herbie,

Ah sorry, didn't realised you had already adjusted the spreads to actual, rather than quoted prices.

Regards, Paul.

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aiminvesting 23rd Sep '15 13 of 20
2

Hi Paul,

About the quick comments you wrote on Porta Communications (LON:PTCM) yesterday, I agree that the Directors must have a good reason to buy shares, but personally I have lost patience and trust and sold yesterday. These are the things that have put me off:

- absolutely unable to turn a profit after several years of trading (even ignoring amortisation and depreciation, Porta is still trading at a loss this HY);

- according to the Director's talk, there is no plan to report a profit in the near future, and they seem happy to target adjusted EBIDTA. Given the level of indebtness, ignoring interest charge seems non sense to me.
- the situation looks good only because of the restatement of HY 2014 results: if you ignore the restatement, revenue is only up 7%, and EBIDTA and adjusted ABIDTA are actually down;

- a big chunk (2.6m) of what was previsouly long term loans are due in the next 12 months and have been moved to current liabilities, moving the current ratio in dangerous territory (71%).

To me, the last point shows that the situation is not turning out as planned. They obvisouly thought that at this stage they would be able to repay the monies borrowed to finance acquisition out of cashflows, and I don't see that happenning. Potentially in for a placing soon.

As always, thanks for your great insights!
Thomas

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Chris Johnson 23rd Sep '15 14 of 20

Hi Paul

Ref BEG "If you look back at previous years, the quality scores look more attractive." How do I do that? Or is that really a question for Stockopedia?

Thanks

Chris

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imranawan 23rd Sep '15 15 of 20
2

In reply to post #106979

Hi Chris

The way I look at previous years is to go to the Stockreport for an individual stock and click on the drop down button next to the Print icon at the top of the page, and select a particular month and year and this provides you with a PDF version of the relevant Stock report. So for example looking at the Begbies Traynor (LON:BEG) Stockreport, the furthest I can go back to is September 2013.

Other users might have found a better way, but this is the way I look at changes in Stock reports.

Best wishes,
Imran.

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FREng 23rd Sep '15 16 of 20

Chris

Click the arrow to the right of the "print" tab on any stock report and you'll see a list of historic reports you can print.

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FREng 23rd Sep '15 17 of 20

In reply to post #106981

Chris

Click the arrow to the right of the "print" tab on any stock report and you'll see a list of historic reports you can print.

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Wayla 23rd Sep '15 18 of 20

Globo: I owned shares in this company for some time but eventually took profit and sold. If the cash is there (maybe its stuck in Greece!) then their actions do not make sense. I asked them directly why they don't pay a dividend (the boss owns loads of shares) but was not happy with their answer.

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Chris Johnson 24th Sep '15 19 of 20

In reply to post #106981

Imran and FREng, many thanks for the pointers, I'll take a look

Chris

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jonesj 24th Sep '15 20 of 20
3

In reply to post #106965

I think it's high time there were some reforms to trading, such as:
1 Why can we not trade directly with other people ? OK, of course we need market makers for those who need to make instant trades. However, why can we not set some kind of limit order, with a price range AND a quantity range? If some other customer matches all or part of the order, a trade can be made directly? Therefore eliminating the spread.
2 An electronic system for holding the shares directly with the stock exchange, not via nominee accounts. Therefore we could route our trades directly or via any broker which we have an account with.
After all, it is the 21st century.

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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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