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

Friday, Jul 24 2015 by

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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SpaceandPeople plc is a United Kingdom-based media specialist company. The Company is engaged in marketing and selling of promotional and retail licensing space on behalf of shopping centers and other venues throughout the United Kingdom, Germany, France and India. The Company's segments include Promotional Sales, Retail, Head Office and Other. The Company markets, sells and administers promotional space in a range of footfall venues across the United Kingdom, including shopping centers, theme parks, garden centers, retail parks and airports. The Company offers a service covering from consultancy services to the provision and management of retail merchandising units in shopping centers. It enables venues to market, administer, promote and sell their promotional space. Its subsidiaries include MacPherson & Valentine Limited, SpaceandPeople GmbH, Retail Profile Holdings Limited, POP Retail Limited, Retail Profile GmbH, SpaceandPeople India Pvt Limited and S&P+ Limited. more »

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Audioboom Group plc operates an audio platform for hosting, distributing and monetizing content. The Company works with approximately 2,400 active broadcasters, content creators and podcasters around the world, and hosts in over 7,400 content channels. The Company's hosting and distribution platform allows partners to embed, share through social channels and re-syndicate their content. The Company receives over 40 million listens per month. It also works with its partners to monetize their audio through live in-reads, the dynamic insertion of pre and post roll audio adverts and video advertisements. Its audio, cloud-based, software as a service (SaaS) platform enables the creation, broadcast and syndication of digital audio content across various devices, networks and geographies. Its subsidiaries include Audioboom Limited, Audioboom Inc, One Delta Limited and Audioboom Pty Limited. more »

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Goodwin PLC is a holding company. The Company operates through two segments: Mechanical Engineering, which is engaged in casting, machining and general engineering, and Refractory Engineering, which is engaged in powder manufacture and mineral processing. The Mechanical Engineering segment produces a range of dual plate and axial nozzle check valves to serve the oil, petrochemical, gas, liquefied natural gas and water markets. Its mechanical engineering markets also include high alloy castings, machining and general engineering products, which form part of construction projects, such as power generation plants, oil refineries, high integrity offshore structural components and bridges. Within the Refractory Engineering segment, through its subsidiary, Goodwin Refractory Services (GRS), it focuses on developing, manufacturing and selling investment casting powders, waxes, silicone rubber and machinery for use in various operations, such as jewelry casting, aerospace and tire molding. more »

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

13 Comments on this Article show/hide all

herbie47 24th Jul '15 1 of 13

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

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herbie47 24th Jul '15 2 of 13

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

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Beginner 24th Jul '15 3 of 13

In reply to post #103520

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.).

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Paul Scott 24th Jul '15 4 of 13

In reply to post #103522

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.


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loudenr 24th Jul '15 5 of 13

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.


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herbie47 24th Jul '15 6 of 13

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

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brucepackard 24th Jul '15 7 of 13

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.

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Kahledfan 24th Jul '15 8 of 13

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

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cig 24th Jul '15 9 of 13

In reply to post #103534

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.

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Geoffclark 24th Jul '15 10 of 13

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

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Lucas 24th Jul '15 11 of 13

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:
Market Abuse Helpline: Telephone 020 7066 4900

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paduardo 24th Jul '15 12 of 13

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.



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piotrmanczak 25th Jul '15 13 of 13

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

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 Are LON:SAL's fundamentals sound as an investment? Find out More »

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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