Small Cap Value Report (Fri 11 June 2021) - SGM, NWF, RWA, VANL, W7L, MIND

11th Jun '21 by Paul Scott

72 comments 9777 reads

Good morning, it's Paul & Jack here with the SCVR for Friday. This week seems to have whizzed by in a flash!

Timing - I'm having lunch with a SCVR reader today, so need to be finished here by noon. Today's report is now finished.

Agenda -

Paul's Section:

Sigma Capital (LON:SGM) - well done to shareholders here, it's time to dust off your bunting! Cash takeover bid at 36% premium, 202.1p - an excellent result. Could there be more similar deals, with UK equities clearly looking attractive to USA buyers.

Nwf (LON:NWF) - this business makes most of its profit from distributing fuel, but also sells food & animal feed. Ahead of expectations update today, for FY 05/2021, ~~but no figures given~~ - ~~not even telling us what market~~ ~~expectations~~ ~~were~~. This is a steady, resilient business, paying a reliable 3.5% divi yield. However, I'm worried about ESG, so can't see much upside from here, despite the low PER.

CORRECTION - my apologies, the company actually did include broker forecasts in the update, but it was buried in a footnote right at the end, with a link to the company's website. I didn't see it, sorry about that!

Robert Walters (LON:RWA) - materially ahead trading update, has only had a modest upward impact on the share price. Maybe that's because it's so obvious that current forecasts are too low? The share price is back to pre-pandemic levels, so maybe the recovery upside is in the price? Looks that way to me.

Van Elle Holdings (LON:VANL) - good signs of recovery in a positive update today. Nicely asset backed. Worth a closer look, as a potential recovery share I think. Although its track record is very mixed.

Jack's Section:

Warpaint London (LON:W7L) - positive momentum continues at this founder-led cosmetics operation, which looks to be emerging from 2020 in good condition.

Mind Gym (LON:MIND) - recovering revenue and renewed investment into digital. The company was generating good growth pre-Covid, but does not expect to return to profitability until FY23.

Paul’s Section

Sigma Capital (LON:SGM)

149p - mkt cap £134m (£182m at takeover bid price of 202.1p)

Takeover Bid

A recommended (by the Directors) takeover bid has been announced for this property developer.

The price is…

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Bluesky Ventura

11th Jun '21

kudos to you. Let hope the young who I have much faith in don't lose their drive or sense of equality.

BSV

JimMcLad

Angle (LON:AGL) For anyone who missed the webcast and might be interested in a break from the footy over the weekend a recording has been posted on youtube.

CTCs, what tests can we perform on them and what is the clinical use?

https://www.youtube.com/watch?v=y2RC_mf3mlM

Spookyone

Paul, its fine to comment negatively if a company omits details of previous expectations when it makes an ahead announcement. Yes it is annoying but you need to be consistent. Today NWF and RWA both fail to give details about previous expectations, you happily slam NWF while singing the praises of RWA.

timarr

i can't imagine many of them will be still be woke by the time they get to state pension age :)

I suspect you'll be wrong. My parents' generation come out with statements that simply aren't acceptable to the modern ear. Plus by the time the current young get to retirement age they'll be dealing with the real impact of climate change.

Of course, people tend to move away from social activism towards conservatism as they get older and have more skin in the game, but that happens at the same time as society in general is changing. I mean, when I was a teenager it was considered acceptable prime time TV to have a sitcom based on inter-racial abuse, another that featured homophobic slurs and a variety show full of blacked up male dancers. All watched with children who were sitting in rooms of adults frantically puffing on cigarettes.

Those times aren't returning no matter how old we all get. The vast majority of us are already a lot woker than our parents are. And a bloody good job to.

Funnymoney

Hi Cowlid,

I may be wrong but I don't think Gattaca (LON:GATC) has been mentioned with regard to a takeover. If you look at the share register you see the second biggest holder is MMGG Acquisition Ltd. It is a bit of a coincidence that the folk at MMGG have previously bought out another recruitment company. George Materna who I believe is the founder (and largest shareholder) bought £220,000 of shares yesterday, he may possibly be of an age where he wants out. Gattaca also has a stockrank of 99.

arfournier

Agreed Amazon may not have been profitable but they almost always generated Cash Flow From Operations which isn't the case for a lot of the businesses that "emulate" them.

gus 1065

Hi Funnymoney.

Re. Gattaca (LON:GATC) as a bid target, this is one of three companies that Robbie Burns/the Naked Trader has identified as a potential bid target in his latest news letter. (Robbie has good form having recently highlighted Vectura (LON:VEC) and Spire Healthcare (LON:SPI) as bid candidates). His other two, Itv (LON:ITV) and 888 Holdings (LON:888) also look good shouts as potentially undervalued businesses that could readily be crunched together with other assets by either a strategic trade buyer or financially engineered private equity player.

Gus.

CamRaid

arfournier - a very good point and again worth noting with Naked Wines that the cash on their balance sheet has grown yet again, appears to be a business where you can be investing for growth and so losing money on the P&L, but cash is being generated on your balance sheet to fund the growth, great model!

Thanks I had a quick look at the accounts and they do generate cash from operations. I'll have a further look.

Rusty2

I use the old site, there is no threaded mode, I don’t get on with the new site. Threaded tried it once, hated it, could not find my posts or replies. I prefer posts in the order they are posted, it is so easy to read.

Can only read in threaded, I thought there was 4 options?

bryans1311

"More seriously, I do understand your hassle point, but IMO there are far more readers on this site that love your style and wit than don't."

Absolutely. But the woke minority sometimes flap so loudly at anything that remotely triggers them, and engage in attempted cancel culture (eg. Emailing the boss of somebody when they see something they don't like). It just isn't worth the hassle.

Welcome to sanitised 2021 (1984).

A bit of banter always comes across as a bit of fun until you’re the one continually being singled out as the butt of the joke. The reason the woke minority/ies flap so much is to try and overcome the latent prejudices of the ochlocracy that tend to go on unchecked until they’re called out for it.

For the record, I’m as guilty as anyone of inadvertently causing offence but with two teenage/early twenties daughters this old dog is gradually being taught some new tricks.

Lion Tamer

Re: threaded vs. non-threaded mode

Dipping in and out during the day, often on different devices (including mobile for which the old site is better), it is much better to use the non-threaded mode so you now where you are up to. Therefore including a clue about the topic is very helpful to those of us who are non-threaded mode users.

"I do write company name each time now."

Thanks! :-)

abtan

Scs (LON:SCS) (no position)

"If my memory serves - recessions have wiped out sofa companies in the past."

I completely agree.

I just can't get my head around how the company crashed and burned with its model the last time.

Surely if it's taking money in advance and paying suppliers much later, then it should never have financial difficulties.

But it did.

It will be interesting to see what impact rising material costs will have in the near future, especially without government support and with so much demand over the last 15 months, which perhaps pushed forward a lot of sales.

12th Jun '21

The woke majority are only asking people not to be racist and sexist. No one is stopping anyone from having such a culture. Don't be surprised when your call out.

Andy Sav

I wonder how much effort it would be to add a comments toggle; in order to give the choice of a threaded / non-treaded view? Possibly another requirement Ed? It may help to move more of the subscription base to the new deployment of Stocko?

(btw, Jacks "Good Idea!" comment below applies to timarrs suggestion about having a comments disclaimer at the top of SCVR, and not my post :-) )

Gosh, i keep finding things that make me feel old! Had to look up the street definition of woke (https://www.urbandictionary.co...). For me, its something I did this morning, before getting out of bed :-)

https://www.collinsdictionary....

Better definition.

sharw

"I wonder how much effort it would be to add a comments toggle; in order to give the choice of a threaded / non-treaded view? "

That is exactly what you have on the new site - in fact two toggles which give you six combinations:

"Jacks "Good Idea!" comment below applies to timarrs suggestion about having a comments disclaimer at the top of SCVR, and not my post"

That tells me you are on the new site because the comment is rubbish to me. I am on the old site where comments are oldest first and unthreaded. Your comment is labelled 68 of 70 and after a search I have found Jack's "Good Idea" pages back above yours at 25 of 70.

CabinPressure

While walking the dog this morning met "Granny Ginn" who lives at the end of the road. She's 90 and no-one knows why she's called Granny Ginn. I assume her real name is Gina.

Anyway she confided she sold her flat in Spain last year after the lockdown and had £100,000 in the bank. She said she's now in the market, following a comment of Warren Buffet : "Buy the dip."

Her favourite site is "Stocko" as she calls it.

Her first buy was BT last October at 100p. Her reason:

" They overcharge me every month, so they must be making money. And they looked like they were in the dip."

I asked what else she'd bought.

She said "Nothing. I'm watching for something else to go into the dip!"

So she's my hero. Waiting, watching, not trading.

And I confess she's made a lot more money than me.

Small Cap Value Report (Fri 11 June 2021) - SGM, NWF, RWA, VANL, W7L, MIND

Paul’s Section

Sigma Capital (LON:SGM)

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Paul Scott

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