Small Cap Value Report (25 Nov) - NGR, AMO, HDD, STAF, GNG

Monday, Nov 25 2013 by
20

Good morning! The FTSE 100 futures are indicating a buoyant start, with an open up 29 points to 6,702 currently being forecast. However, one share which is likely to be maked down is NATURE (LON:NGR) which has issued a profit warning. The £28m market cap (at 36p per share) group indicates that trading at its maritime division (which provides services such as recycling polluted oil) is under-performing due to a variety of factors, such as delayed planning permission for its Gibraltar facility (which was damaged by fire in May 2011), and higher costs of complying with legislation in Rotterdam.

Their other divisions (Oil & gas, and engineering) are performing better than expected, but the overall group performance for H2 is slower than H1, therefore results for 31 Dec 2013 will be below market expectations.

Broker consensus is for 2.3p EPS this year, and 2.8p in 2014. The company reported just under 2.5p EPS for H1, although that seems to have been boosted by a one-off gain from the disposal of an interest in a former associate (which booked a £912k profit). That created 40% of the H1 profit, so if we adjust down H1 EPS by 40%, then it comes out at 1.5p. So if H2 is expected to be lower, then (guesstimate) we might be looking at say 1p for H2, which means the full year EPS might drop out at around 2.5p perhaps?

Although there is some guesswork in my figures here, this doesn't sound like a disaster, and it's down to clearly identifiable factors, which should be resolved in time. Therefore I would imagine, given that we're in a bull market, the share price here is not likely to be too badly hit today - I'm thinking perhaps a 10% drop in price?

No, hang on that doesn't make sense. If the company is saying it's going to miss FY 2013 market forecast of 2.3p, then that must mean that H2 will be less than 0.8p EPS. Hmmm, tricky one this, as the usual problem is that it's not clear which figures broker consensus refers to (i.e. normalised or not, diluted or not?).

Thinking about it again, this must mean that normalised EPS is more likely to be around 2p perhaps? That would put them on a PER of 17.8, but given that this has been affected by…

Unlock this article instantly by logging into your account

Don’t have an account? Register for free and we’ll get out your way

Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested. ?>


Do you like this Post?
Yes
No
20 thumbs up
0 thumbs down
Share this post with friends



Nature Group PLC is a holding company. The Company is engaged in providing reception and treatment services for oily and polluted wastewaters, the ownership and application of intellectual and proprietary rights related to such treatment, and the provision of reception and treatment plants for oily waste in onshore and offshore locations. It operates through two segments: the reception and treatment of maritime waste, both liquid and solid in onshore locations (maritime), and the provision of offshore treatment modules (oil and gas). Its maritime operations are based in Gibraltar, The Netherlands, Malta, Portugal, Spain, the United States and the United Kingdom/Jersey. Its oil and gas operations are based in Norway. The Company's subsidiaries include Nature Environmental Technologies Limited, Nature Environmental Solutions Limited, Nature International Slop Disposal BV and Nature Oil & Gas AS. more »

LSE Price
3.15p
Change
 
Mkt Cap (£m)
n/a
P/E (fwd)
n/a
Yield (fwd)
n/a

Amino Technologies Plc (Amino) is a provider of media and entertainment technology solutions. The Company works with over 250 operators in around 100 countries. Using Internet protocol (IP)/cloud innovation, it enables operators to meet the challenges they face as broadcast television (TV) and online moves to an all-IP future with managed over-the-top (OTT) offerings. It also helps operators to provide the features and functionality that the consumers are looking for in a multiscreen, multi-device entertainment world. Amino’s products include Amino TV, Amino OS and AminoVU. Amino TV is a multiscreen video platform designed for the subscriber segmentation. Amino OS is the software solutions for deploying and managing connected devices. AminoVU is the Company’s media server suite with home networking features for simultaneous streaming of live and recorded TV to a multiple of TVs, tablet and smartphones through the home using any combination of wired and wireless technology. more »

LSE Price
117p
Change
 
Mkt Cap (£m)
89.0
P/E (fwd)
9.6
Yield (fwd)
6.2

Hardide plc is a United Kingdom-based company, which is a provider of tungsten carbide coatings for critical metal components in abrasive, erosive, corrosive and chemically aggressive environments. The Company's segments include UK operation, US operation and Corporate. It offers a family of nanostructured and low temperature chemical vapor deposition (CVD) coatings, which provide wear and corrosion resistance. The Company's coatings can be applied to a range of metallic substrates, including stainless steels, superalloys, tool and carbon steels, as well as nickel, copper and cobalt-based alloys. It serves customers in various industries, including oil and gas drilling and production, flow control, aerospace, power generation and precision engineering. Its coatings include properties, such as wear and abrasion resistant, erosion resistant, chemical resistant and anti-galling. It has manufacturing facilities in Oxfordshire, the United Kingdom, and Virginia, the United States. more »

LSE Price
71.5p
Change
 
Mkt Cap (£m)
35.1
P/E (fwd)
n/a
Yield (fwd)
n/a



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


16 Comments on this Article show/hide all

adz2k13 25th Nov '13 1 of 16
1

Hi Paul, do you have any thoughts on Summit's acquisition news this morning (SUMM). Thanks! Adam

| Link | Share
Beginner 25th Nov '13 2 of 16
2

I have just topped up on NATURE (LON:NGR). What you say about the company is quite right, but the Gibraltar facility formerly provided about 40% of turnover, so when it comes back on line the company will show a marked improvement in performance. The fact that the company has shown any growth at all while Gibraltar has been down is really quite remarkable. Other branches of the company are performing quite well, and although this year's targets will be missed 2014/15 should be a lot better.

| Link | Share
Funnymoney 25th Nov '13 3 of 16
1

Interesting stuff about Nature, but if there are other announcements in a day it must be better that you concentrate on the stocks where the expectations are positive because statistically these always outperform the downgrades.

| Link | Share | 2 replies
tads 25th Nov '13 4 of 16

Noticed that ZIOC were up 7% this morning but no related news.

| Link | Share
merlin51 25th Nov '13 5 of 16
2

Thanks for your fascinating insight into the world of the MM's, made interesting reading. Enjoy your posts every morning.

Thanks
M51

| Link | Share
Beginner 25th Nov '13 6 of 16
1

In reply to post #79408

Quite right Funnymoney. Heart ruling the head here again!!

| Link | Share
Funnymoney 25th Nov '13 7 of 16

"Heavy Director selling generally on a weekly email I receive on this matter, is another sign of a market that's got a bit toppy in parts." So what is the email?

| Link | Share
V4Value 25th Nov '13 8 of 16
2

Paul, re Gold - I noticed you picked up some Medusa Mining (MML) on the 11 November at 109.5p. Have you sold out of this stock now or holding for the longer term? Looks pretty good value if you believe in its margin of safety and risk v reward profile. Wouldn't you agree?

| Link | Share | 2 replies
maillotàpoisrouges 25th Nov '13 9 of 16

''Whereas in reality they are just intermediaries, who try to skim off a bit of profit on every trade, and are simply adjusting prices in response to supply & demand from investors such as us.''

Paul, Sweett opened 10% up on friday, after it was tipped in the IC on thurs pm. Is this gap-up primarily the MMs deciding the price before the market opens, hoping to tempt take advantage, or is it a response to accumulated orders before the market opened? Chicken or egg first? Anyone?
Keep up the good work
Hedz

| Link | Share | 1 reply
cr6196 25th Nov '13 10 of 16

In reply to post #79415

What do you have for market cap here (I have ~£192m)? Looks to be trading around 7x? A pity they don't give all-in sustaining costs but cash costs are extremely competitive. Interesting though.

| Link | Share
ryanc106 25th Nov '13 11 of 16

Hi Paul

Thanks for yet another informative article.

A bit unrelated but I've been noticing that Vislink (VLK) appear to be slipping a bit recently. What's your view on this? Have you heard/know of any reason as to what is causing this?

Cheers

| Link | Share | 1 reply
DarwenLad 25th Nov '13 12 of 16
2

The recent drop in Staffline's share price is not a complete surprise.

Having listened to a recent investor presentation from Andy Hogarth, Staffline's CEO, I was very impressed by this company and its growth ambitions.

However, a few days later (Oct 21) I watched Channel 4 Dispatches programme - the Secrets of your Pay Packet.(The full programme seems to be no longer available on the Channel 4 website).

It included an undercover reporter interviewing a Staffline executive on how to get round the new agency payment rules which is supposed to mean that agency workers get the same pay as permanent staff after 12 weeks.

It was also brought up at Prime Minister's Questions on Wednesday although the PM brushed it aside.

http://www.channel4.com/programmes/dispatches/4od#3595307

I might be completely wrong, but having seen the Channel 4 Dispatches programme, I am going to steer clear of Staffline for the moment.

| Link | Share | 1 reply
Paul Scott 26th Nov '13 13 of 16
1

In reply to post #79415

Hi V4Value,

No, I sold those Medusa Mining (LON:MML) - it was just a small punt, and I changed my mind.
As mentioned in the report, I've just decided that these geared plays to the Gold price are outside my area of expertise.

Cheers, Paul.

| Link | Share
Paul Scott 26th Nov '13 14 of 16
2

In reply to post #79422

Hi DarwenLad,

Ah OK, thanks for that, I was not aware of the TV programme about Staffline.

There was one comment made by management about a year ago in a meeting which disturbed me. They said that a large supermarket was getting rid of its existing staff who were earning £11.50 an hour, and replacing them with Minimum Wage people through Staffline. That struck me as unethical, and damaging to the UK economy as a whole. Although I could also see that Staffline's other activities, e.g. the welfare to work programme, are on the face of it very socially useful.

I also recall Staffline making a great play about how their approach is very ethical in not exploiting loopholes in the tax arrangements for expenses payments to agency workers. So it struck me that they seemed a pretty sound operation. Although I suppose one should seek third party evidence for that, and not believe what any company tell you.

Cheers, Paul.

| Link | Share
Paul Scott 26th Nov '13 15 of 16
1

In reply to post #79419

Hi ryanc,

"A bit unrelated but I've been noticing that Vislink (VLK) appear to be slipping a bit recently. What's your view on this? Have you heard/know of any reason as to what is causing this?"

It's just background noise, in my opinion.
The very recent Tr Stat was fine, so I'm happy to hold for the foreseeable.

DYOR as usual though!

Cheers, Paul.

| Link | Share
Paul Scott 26th Nov '13 16 of 16
1

In reply to post #79416

Hi Hedz,

I know that the MMs look at tipsheets, etc, to prepare for a tidal wave of buyers or sellers - they would be daft not to!!
But it's primarily the actual trades in the market place that make them move their price quotes.

Cheers, Paul.

| Link | Share

Please subscribe to submit a comment



 Are LON:NGR'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 Stockopedia.com on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »

Follow



Stock Picking Tutorial Centre



Let’s get you setup so you get the most out of our service
Done, Let's add some stocks
Brilliant - You've created a folio! Now let's add some stocks to it.

  • Apple (AAPL)

  • Shell (RDSA)

  • Twitter (TWTR)

  • Volkswagon AG (VOK)

  • McDonalds (MCD)

  • Vodafone (VOD)

  • Barratt Homes (BDEV)

  • Microsoft (MSFT)

  • Tesco (TSCO)
Save and show me my analysis