Small Cap Value Report (24 August 2016) - CALL, LTHM, HEAD

Wednesday, Aug 24 2016 by

Good afternoon!

We're having glorious weather in the mornings here in Greece, but thunderstorms in the afternoons/evenings. Therefore I decided to reverse my schedule today, and sunbathe/swim this morning, then write a report this afternoon.

So apologies for this report being a little later than usual. It should be finished by 3pm UK time, so please refresh this page later.

Exchange rates

I'm intrigued to see that sterling appears to be recovering some of its referendum-related losses. To my mind that makes sense, so I've been long of cable (£ vs $US), once it became clear that economic armageddon was actually not going to happen any time soon (if at all).

It's worth monitoring the key exchange rates for UK companies (i.e. £:$US, and £:Euro), because that will affect earnings for lots of companies. Maybe some of the recent share price movements triggered by weak sterling could reverse somewhat?

Cloudcall (LON:CALL)

Share price: 58p (down 2.5% today)
No. shares: 20.1m (after Placing, and additional EIS/VCT placing)
Market cap: £11.7m

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

Result of General Meeting - this is nothing more than a formality really - to approve the issue of placing shares. However, it's always worth reading all RNSs, as sometimes there can be an interesting nugget of information contained within.

So this comment is worth mentioning;

Peter Simmonds, Chairman of CloudCall, commented: "We are delighted with the institutional support we have seen in undertaking this transaction.

We believe we are at an inflection point where the additional funding will enable us to capitalise on the strong pipeline of opportunities that exist by increasing our sales and marketing capacity, particularly in the US where we are seeking to leverage our important relationship with Bullhorn."

I think this is important, because Peter Simmonds has considerable credibility - being a relatively recently appointed, and independent Chairman. He is also credited with having steadied the ship, and helped management focus properly with some important strategic improvements. His track record at dotDigital (LON:DOTD) is of course, excellent. So a credible figure.

Also, I've spoken to a couple of larger institutional shareholders at this company, and have been quite surprised at how bullish they are about the company's prospects. There's a gulf between bullish institutions, and generally exasperated private shareholders.

This company has repeatedly disappointed to date, but…

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Cloudcall Group plc is a United Kingdom-based holding company. The Company and its subsidiaries are engaged in software and unified communications business. The Company provides a suite of cloud-based integrated software and telephony products and services under the name cloud. The Company is a full-service communication provider. The Company designs, develops and operates integrated communication services for customer relationship management (CRM) systems. The Company's CloudCall portal enables to manage organization’s call profiles, configures all settings and manages user and service accounts and access real time activity reports and call recordings. Its automatic call distribution (ACD) feature routes the callers directly to available team members in the organization. The Company’s subsidiaries include Cloudcall Ltd, Cloudcall BY. LLC and Cloudcall, Inc. more »

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James Latham plc is a timber and panel products distributor. The Company is engaged in timber importing and distribution, carried out in approximately 10 locations. The Company offers a range of wood-based panel products, natural acrylic stone, hardwoods, high grade softwoods, flooring, cladding, decking and plastics. The Company also supplies commodity and specialist products to timber and builders' merchants. The Company offers a range of product categories, such as panels, solid surface, door blanks, hardwoods, softwoods, engineered timber, flooring, decking, cladding, modified timber and panels, fire retardant panels and technical panels. The Company caters to door and kitchen manufacturers, shop fitters and other market sectors. The Company's subsidiaries include Lathams Limited and James Latham Trustee Limited. Lathams Limited is engaged in importing and distribution of timber and panel products. James Latham Trustee Limited is a corporate trustee company. more »

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Headlam Group Plc is a United Kingdom-based company, which is engaged in the marketing, supply and distribution of a range of floorcovering products. The Company's operations are focused on providing customers, principally independent floorcovering retailers and contractors, with a range of floorcovering products supported by a next day delivery service. The Company operates through 56 operating segments in the United Kingdom and five operating segments in Continental Europe. Each operating segment is a trading operation aligned to the sales, marketing, supply and distribution of floorcovering products. The Company's activities and facilities are located throughout the United Kingdom, France, Switzerland and the Netherlands. Its business in France operates from approximately two distribution centers and over 20 service centers, and the businesses in Switzerland and the Netherlands each operate from a single distribution center. more »

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

4 Comments on this Article show/hide all

tabhair 24th Aug '16 1 of 4

Some people have been talking about the results that Molins (LON:MLIN) put out today in yesterday's thread. Their main business of running their pension fund took a turn for the worst due to the recent interest rate cut. Their side business of manufacturing packaging machinery also weakened, but in-line with expectations. Paul described this one has a barge pole stock, and I certainly agree. However, I would add the caveat that if we were to ever get a tightening interest rate cycle, then the pension fund will act as a serious tailwind. Will Molins (LON:MLIN) be alive to reach that turn of the cycle though.

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FREng 24th Aug '16 2 of 4

I see £LOOP joined AIM today after what was claimed to be a very oversubscribed IPO. It seems to be a competitor for Cloudcall (LON:CALL). Neither of them are for me - too many free or cheap competitors. Where's the moat?

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JohnEustace 24th Aug '16 3 of 4

If you have an internet connection you can see the lightning strikes in real time on this site. There is some very intense activity in the Ionian Sea at the moment - I would stay on dry land!

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JohnEustace 24th Aug '16 4 of 4

Bioquell (LON:BQE) put out an RNS saying they are no longer looking for a buyer for the remaining business and are concentrating instead on developing their existing bio-decontamination expertise.
I had been holding in expectation of the sale and therefore sold first thing. I hope they do well with their new strategy but I'm focusing elsewhere.

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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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