Small Cap Value Report (27 Nov 2014) - TRT, DGB, LTHM, MSI, TRK

Thursday, Nov 27 2014 by

Good afternoon! I'm gradually adjusting to Las Vegas time, hence today's report being later than usual. Can't say I'm particularly enjoying myself here - endless malls full of designer clothes & other trinkets has zero interest to me. Also the casinos simply reinforce my view that any form of fixed odds betting where the house has an edge, is a mug's game. I only really like poker, as you can pit your wits against other players. Trouble is, most poker players here look so unsavoury that I'd rather play online, and can do that anywhere! Still, it's good to experience this place, even if it will be just the once.

Anyway, onto some company results.

Transense Technologies (LON:TRT)

Share price: 4.1p (down 30% today)
No. shares: 295.7m
Market Cap: £12.1m

This company has been around for ages, so it's quite a stale story. It looked to be getting somewhere with its tyre pressure monitoring technology, but checking the archive I last reported on it here on 13 Jun 2014 when there was a mild profit warning.

Profit warning - they've warned again today, with contract delays being the culprit. I'm wary of contract delays, as if a product is really good, customers tend to just buy it. Contract delays can mean the customer isn't going to buy it, but just hasn't got round to telling the vendor yet.

My opinion - I've never looked into the products or markets in any detail with this company, but one has to wonder after so many years trying to commercialise this technology, whether there's really much appetite for it?

The forecast break into profit this year & strong profit growth next year must be increasingly questionable. That said, the market cap has adjusted down to reflect that, and is now only £12.1m, which could end up looking cheap if big orders do start rolling in.

One would need to keep a close eye on the cash position here. The company said it had adequate cash in Jun 2014, but I wonder if it will need to raise more next year? The number of shares in issue has gone up every year for the last 6 years, so it seems to be a continual fund-raiser, and at some point the appetite to keep putting in more money might dry up?

A bit too speculative for me.

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Transense Technologies plc is engaged in the manufacture of electrical switchgear management systems. The Company's segments include SAWsense and Translogik. The SAWSense segment designs and develops surface acoustic wave (SAW) sensor devices that can be used to measure torque, pressure and/or temperature. This technology has a range of uses, ranging from custom applications through to high volume mass markets, such as passenger cars. The Translogik segment designs and manufactures a range of tire pressure monitoring systems (TPMS), products and services for heavy-duty off-road vehicles, commercial and passenger transport vehicles. These consists of the iTrack system, which provides real-time tire temperature and pressure measurements for mine-haul trucks in service, and a range of tire probes and other offerings for the road transport sector. The Company is also engaged in the development of non-contact batteryless sensors and their electronic interrogation systems. more »

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Thruvision Group plc, formerly Digital Barriers plc, is a provider of visually intelligent solutions to the global surveillance, security and safety markets. The Company operates through Solutions segment, which is focused on the surveillance market. This covers image and data capture (standoff passive body scanning and unattended ground sensors), a range of processing and enhancement techniques (thermal image processing, image stabilization and enhancing low light performance), image transmission (both wired and wireless technologies) and a range of analytics algorithms. It specializes in streaming and analysis of secure video and related intelligence over wireless networks. Its solutions include EdgeVis Live, EdgeVis Shield, ThruVis, SmartVis and CloudVis. It provides video content analysis and body scanning to identify threats to life. Its solutions are developed for specialist areas of security and defense, as well as for the protection of locations. 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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  Is LON:TRT fundamentally strong or weak? Find out More »

15 Comments on this Article show/hide all

Fangorn 27th Nov '14 1 of 15

"Can't say I'm particularly enjoying myself here - endless malls full of designer clothes & other trinkets has zero interest to me. Also the casinos simply reinforce my view that any form of fixed odds betting where the house has an edge, is a mug's game. I only really like poker, as you can pit your wits against other players. Trouble is, most poker players here look so unsavoury that I'd rather play online"

Loads to do there PP - get yourself on a chopper ride of the grand canyon, or take in one of the evening shows. Cirque de Soleil was there when I went many years ago.

Hard to not find something to do if you're at all adventurous.

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Paul Scott 27th Nov '14 2 of 15

In reply to post #88121

Hi Fangorn,

Riding choppers is not a great pastime of mine (despite all the rumours lol!!), but we are taking in a drag show later today. Think I'm still a bit jet-lagged, so my natural joie de vivre has been somewhat blunted. Also I lost $200 in roulette yesterday, so am a bit annoyed with myself for being such a mug punter.

The view from the 53rd floor of the Vdara is so spectacular, that this is the best entertainment needed - myself and my eccentric travel companion are both great aviation fans, so we love seeing planes taking off & landing, and we have a great view of the airport approach. Indeed, the flightpath has moved very close to our hotel today, so fantastic views of planes taking off & panoramic views of the mountains behind, and the whole city. We must be able to see for 20 miles, easily, in over 180 degrees from up here.

I've also been taught how to "twerk" (fuelled by apple vodka), but don't think I'll win any prizes!

Regards, Paul.

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Hydrus 27th Nov '14 3 of 15

There is lots of great food in Vegas, ranging from Joel Robuchon's 3 michellin star restaurant to SW steakhouse and Scarpetts for excellent Italian food. The Picasso is also pretty good and it's fun looking at the paintings whilst eating, especially if you are like me and can't help thinking what would happen if you flicked your mash per potatoes up onto one of them.

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Hydrus 27th Nov '14 4 of 15

'Mashed' of course, stupid auto correct

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AlanJenkins2 27th Nov '14 5 of 15

To my mind,the news from Transense illustrates the dangers of believing companies when they indicate suggest or imply that they may either turn a profit,or at least get close to breakeven when they never have.

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Paul Scott 27th Nov '14 6 of 15

In reply to post #88131

yes, yes, I'm not really interested.

I love being on 53rd floor of VDara, and looking at the planes!

Vegas generally seems ghastly to me, not interested.


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Metier9 28th Nov '14 7 of 15

I was in LV for a trade show a year ago and didn't 'get' Las Vegas. I was wondering if i was because I'm British? Mind you, I did not have team to see any shows.

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jraitt 28th Nov '14 8 of 15

If the poker gets boring try the attractions on the Stratosphere Tower

Let me know which you enjoyed most however I doubt as much fun as watching QPP SP.

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pep 28th Nov '14 9 of 15

I was in Vegas in 1986 and liked it....all that old atmospheric gangster stuff, casinos with history etc. Went back two years ago to see the new rebuilt version and like you, I thought it pretty ghastly. As expected, the wife loved the shopping malls!! I went to a gun shop where I could 'hire' a variety of weapons that I hadn't yet got round to using, and blast away with on their indoor range. Good crack. There is a very good Italian restaurant in the Tuscanny Villas Casino that does an ice cream cake that is absolutely the business. There is also a gravity-free facility where you can float about weightlessly.

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OsullivanB 28th Nov '14 10 of 15

Do they still do the light aircraft ride down the Grand Canyon? If so, I recommend it.

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purpleski 28th Nov '14 11 of 15

If I was you spend the money you will probably lose:-) over the next few days on hiring a car/air fare and head off to San Fransisco which I am sure has more to offer than LV. Sounds like hell.

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valueman 28th Nov '14 12 of 15

A very well run family controlled company that's only problem that I can see has been a low 13% return on capital .VP used to make a higher return pre-recesssion and I have been waiting for it to improve.It relies quite heavily on bank debt for reasonable returns .However ,the return is nearly 15% now and hopefully will continue to improve as their pricing power continues to increase in their key UK divisions .That ,coupled with a lowish valuation of a PE of 13x y/e Mar 15 makes for a compelling buy .

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julesone 28th Nov '14 13 of 15

Hi Paul

One of the strangest flights from LV airport is the plain marked JANET 737 that flies to Area 51. I picked up the schedule from the National Atomic Testing Museum which is one of the most interesting and unusual museums I have to. It's within walking distance of the strip.

Julian Shute

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DarwenLad 28th Nov '14 14 of 15

Much better than a flight along the Grand Canyon is to hike to the bottom and stay the night at Rattle snake ranch before returning the next morning. It is much easier than it looks (especially if you stay overnight at the bottom). The colours of the rock formations are fantastic, and the sense of achievement as you sip your first beer at the Rattle snake ranch, far exceeds (temporarily at least) finding a "ten bagger" .

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Dendyver 28th Nov '14 15 of 15

VP the headline figures do look good, however the negatives as I see them:
Current Assets 57.7 only exceed Current Liabilities 51,7 by 11%
Current Assets 57.7 only 20% of Enterprise Value 300.4
Free Cash Flow is minus 1366 out of which is paid the dividend
24786 + 4 - 24346 - 923 - 887 = (1366)
Anybody dis-agree with these figures, as valueman says VP is a compelling buy.

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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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