Small Cap Value Report (24 Jul 2015) - SAL, BOOM, GDWN, KBC

24th Jul '15 by Paul Scott

13 comments 17829 reads

Good morning!

It's my last day in Spain today, and have to say I'm very impressed with Sitges - haven't been here for 20 years, and it's improved tremendously in that time - much better quality restaurants, and a lovely long promenade which has free WiFi in places. We've found the people here very friendly & helpful, everywhere we've been, and prices are reasonable. So a pleasant holiday spot, easy to get to (only 1.5 hr flight) which I will definitely be revisiting. No mozzies here either, which is a big plus for me, as I get eaten alive in Greece!

On to today's markets.

Spaceandpeople (LON:SAL)

(at the time of writing, I hold shares in this company)

I see that there has been a flurry of buying today, and the price is up 4p at the time of writing - which is encouraging, as that usually happens a day or two before good news of a contract win is announced.

Thinking about timings, we're due an update on the likely Network Rail contract win, which I hope could become a nice additional earner for this niche marketing company (which manages kiosks and promotions in the concourse space in shopping malls, and other open spaces).

It's sad that we have to rely on insider dealers to flag up that good news is in the pipeline, but that seems to be the way the London market works. So if a share price moves sharply, it's often because someone with inside information is getting in or out ahead of that news being announced. It's very rare for anyone to be punished for this, which makes a mockery of the law on insider dealing.

After the initial flurry of insider deals, you then get perfectly legitimate follow-on buying from other people who have spotted the unusual trades & price movement, and have worked out that the previous trades were probably initiated by someone with inside info.

If I can spot suspicious trades, why can't the FCA?! I think this whole area needs to be drastically tightened up.

Audioboom (LON:BOOM)

Share price: 5p (down 9% today)
No. shares: 533.3m
Market cap: £26.7m

Interim results - this company is a social media website & app, which concentrates on distributing audio content, particularly the spoken word. It's a smashing little website/app, in my view. However, I don't…

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Rustbucket

24th Jul '15

I read SPARK Ventures (LON:SPK) are acquiring 2m SAL shares, not sure if that had any effect on the share price?

Tungsten (LON:TUNG) seem to be on the way up again, up over 20p recently.

Beginner

i think Spark are only acquiring them because they are effectively merging with Gresham Hall, so this should have no impact. (Typing without glasses! Apologies.).

Paul Scott

Tungsten (LON:TUNG) shares are just a gambling chip now. Nobody really knows what it's worth - it's impossible to value in my view.

P.

loudenr

Hi Paul

I find the issue of insider trading depressing. In many instances it is so obvious what is going on - not sure why the FCA can't spot this and take punitive sanctions against those who engage in the practice. It really needs to be sorted out as it is unfair. I have been caught out on the wrong side of it a few times with the share price dropping 10-20% in the days leading up to an announcement and I am sure I one among many.

Ric

Not sure what is happening at Xaar (LON:XAR) share price has just shot up 6%. Insider trading? Can't see any news.

brucepackard

Agree about insider dealing.
I think the problem is PROVING criminal activity. Just look at the problems trying to convict anyone who has rigged libor, and with libor there is a lot incriminating evidence on bloomberg chat msg system that has appeared in the newspapers. Tom Hayes actually originally pleaded guilty.
But the burden of proof to actually send people to prison is a different matter, particularly when they have very expensive lawyers.

Kahledfan

HI Paul

Top slicing query;

you have talked a few times recently about top slicing your holdings where they have been doing well and have reached full value.

What percentage do you sell when you do top slice? `20%, 30%, 50%, more?

Would be interested to know

Regards, and thanks

cig

Well for garden variety cases, it's not too hard to catch insider trades: the authorities can get the beneficiaries for each suspicious trade and then check whether there's some obvious link with company or adviser principals. The SEC does it and catches some people regularly. It is often small fish, but a regular flow of such cases probably has some welcome deterrent effect.

On the other side of the medal, it's tempting for conspirationists to attribute with hindsight any material move before a news release to insider trading. Makes a nice story, regardless of truth. I'm sure some of these moves are just unrelated noise (e.g. fat finger or clunky sellers/buyers) which just happens to be before some news.

Also not all insider trading involves "insiders", there's a number of people involved in a news release, and these days they use computers. Most accountant/ management/ adviser types are not generally technically literate enough to get computer security right (it's hard). For a black hat hacker, it looks like an easy business to be in. I bet executing the trade without leaving obvious traces is harder than getting to inside information.

Devlishcunning

The rise in SAL could be because it was tipped in a thursday afternoon email.

Lucas

let's see what the news will be on SAL in the next couple of days. if you have a reasonable suspicion of market abuse you can contact the FCA market abuse team: http://www.fca.org.uk/firms/markets/market-abuse
market.abuse@fca.org.uk
Market Abuse Helpline: Telephone 020 7066 4900

paduardo

With a stock as thinly traded as SAL with everyone waiting on news I think it is just as likely a few buys shifted the price then people believe there is leak and jumped in shifting it more.I bought £1.5k of stock this morning at 73p when the mid price was 71.5p. Another buy straight after me shifted it more. I hope I am wrong though and there is news early next week.

Thanks Paul for all of hard work doing these reports.

Cheers

Peter

piotrmanczak

25th Jul '15

Thanks for your reports. Keep it up! You are my hero.

Small Cap Value Report (24 Jul 2015) - SAL, BOOM, GDWN, KBC

Spaceandpeople (LON:SAL)

Audioboom (LON:BOOM)

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Paul Scott

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