Small Cap Value Report (9 Dec) - ABM, TET, RWS, DRV, APC

Monday, Dec 09 2013 by
15

Good morning. The backdrop is positive this morning, with the FTSE 100 Futures currently indicating an open up 27 points at 6,574. Of course the FTSE 100 has really been going sideways for a while, obscuring the fact that small and mid caps have had a remarkably strong year. Personally I think there's very little (if any) scope for further across-the-board increases in small cap valuations, but there are always stock-picking opportunities in any market. Also when you do find something that's under-priced, it tends to re-rate very quickly in a bull market. So it's been a pretty exciting & successful year overall. Capital preservation is my main theme for 2014, whilst also taking advantage of attractive stock-picking opportunities that do arise.

It's a quiet morning for news today. Troubled pawnbrokers, Albemarle & Bond Holdings (LON:ABM) has issued its final results for the year-ended 30 Jun 2013. They don't look that bad, with the business still decently profitable (albeit down sharply on the prior year). However, the sting in the tail is that (as reported before) they are now trading at an EBITDA loss. So results have really fallen off a cliff in the last year, driven they say by the fall in the Gold price. There has to be more to it than that. I'm wondering if, after 5 years of squeezed living standards for the poor especially, the supply of gold to pawn has simply dried up? There must come a point where people stop redeeming their gold pledged against loans, and run out of things to pawn? Maybe that point has been reached now?

I'm steering well clear of this share. The company is in a formal sale process, but it seems to me the logical next step for anyone wanting to buy the business would be to do a pre-pack Administration, thereby only buying the profitable shops from the Administrator. That possible outcome would leave nothing for shareholders. Who knows though, maybe the 30% shareholder will put in an offer for the whole company in its current form? The timing looks to be early Feb 2014 as crunch time with the Bank, who have currently been supportive. With gold stock being smelted down, and lending reduced, in order to keep within the Bank facilities, it looks pretty grim.

 

 

 

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Treatt PLC is a United Kingdom-based ingredients manufacturer and solutions provider to the flavor, fragrance and consumer goods markets. The Company's geographical segments include United Kingdom, Rest of Europe, The Americas and Rest of the World. The Company's products include Essential oils, Citrus, Treattarome, Functional ingredients, Chemicals, Organic essential oils, Vegetable oils and Treatt brew solutions. Its Essential oils include Amyris Oil, Angelica Oil and Aniseed Oil. Treattarome products include Pineapple Treattarome, Honey Treattarome and Cucumber Treattarome. Its Citrus products include citrus oils, CitrustT, TreattZest and Citrus add-back range. Its Functional ingredients include beverage specialties, fragrance ingredients and sugar reduction products. Its chemicals include aroma chemicals, natural chemicals and Treatt Flavour Wheel. Its Vegetable oils include Borage Oil and Baobab oil. Its organic essential oils include Organic Aniseed Oil and Organic Lime Oil. more »

LSE Price
479p
Change
-0.2%
Mkt Cap (£m)
278.7
P/E (fwd)
25.2
Yield (fwd)
1.1

RWS Holdings plc is a holding company, which provides patent translations, intellectual property support services, technical and commercial translations and linguistic validation services, through its subsidiaries. The Company's segments include Patent translation division, Life science division, Commercial division and Information division. The Patent translation division provides patent and technical document translation and filing services with offices in the United Kingdom, the United States, Europe, Japan and China. The Life science division provides technical translations and linguistic validation to medical and pharmaceutical sector. The Life science division includes Corporate Translations Inc., and medical translation and Pharmaquest linguistic validation businesses. The Commercial division provides non patent technical translation and localization services. The Information division offers patent search, retrieval and monitoring services, and patent database service, PatBase. more »

LSE Price
507p
Change
1.6%
Mkt Cap (£m)
1,387
P/E (fwd)
25.3
Yield (fwd)
1.7



  Is LON:ABM^J17 fundamentally strong or weak? Find out More »


4 Comments on this Article show/hide all

iwright7 9th Dec '13 1 of 4

Paul

DRV have announced results today - If not already could you add to your review list please?

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dosh 9th Dec '13 2 of 4

Paul,
Alternative Networks year end results came out today, I see you made a reasonably "could be worth a look" comment when they issued a trading statement on 3rd October. To my view, as a holder, they look ok if not particularly inspiring plus have a decent dividend and cash. However, price seems to be about right in my view at present.

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jraitt 9th Dec '13 3 of 4

Paul,
Just listened to half hour programme on Radio4 - Riding the graphene wave - very interesting
http://www.bbc.co.uk/programmes/b03kpnjx. Might be of interest to you.
John

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rheiner 11th Dec '13 4 of 4

Paul, Dementia a subject on radio 4 this morning and on Newsnight yesterday and also the G8 meeting with PM Cameron today. Has IXI [dementia specialists] with only 15m shares in issue come to your attention ? Love to know what you think.

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

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