Small Cap Value Report (Fri 15 June 2018) - REC, NXR, BPM, GYM, BWNG | Graham Neary

15th Jun '18 by Graham Neary

42 comments 15069 reads

Morning!

Yesterday was a fun day out at Mello South, as expected. I was too busy to attend the morning sessions, as I was preparing notes on Revolution Bars (LON:RBG) for my own presentation. But I was pleased to attend the afternoon sessions from Titon Holdings (LON:TON) and Non-Standard Finance (LON:NSF), and in particular very happy to hear the presentation by actuary, investor and author Guy Thomas.

Guy's book Free Capital was inspirational to many of us in the investor community. It had a big impact on me, too. It showed that a determined individual, if they put their mind to it, could succeed in the stock market. Furthermore, it showed that there was no single path to success. While successful investors may have certain traits in common, their "edge" tends to be unique to them.

Guy gave a strong presentation on a new topic: fund manager selection. This is more commonly discussed among professionals in wealth management than among the typical private investor who is interested in picking their own stocks. But in the field of finance it is a key issue, and one which has been relevant to my own career. So it was terrific to hear the considered thoughts of Guy Thomas on the matter.

Many other strong presentations were given - too many to mention them all here. Equally as important, however, was the chance to network and to put faces to names. Well done to all concerned.

Right, time for some stock analysis.

Due to the business of the week, I've not covered quite as many I hoped by now.

For today, I'd like to cover:

Record (LON:REC) - final results (I hold this one)

Stocks with news this week I haven't covered yet:

Norcros (LON:NXR)
B.P. Marsh & Partners (LON:BPM)
GYM (LON:GYM)
N Brown (LON:BWNG)

Quick personal note on my own portfolio: I've been nibbling up some more shares in Ranger Direct Lending Fund (LON:RDL). I've realised…

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rpannell

15th Jun '18

A bit off topic but I would just like to say a big Thank You to David Stredder for arranging the first Mello 1 day event. Many great and thoughtful speakers including Graham Norton. A great event at any price.

MrContrarian

My morning smallcap tweet: Laffable speling from LVCG.

Leaf Clean Energy Co (LON:LEAF), Audioboom (LON:BOOM), Inspiration Healthcare (LON:IHC), Live (LON:LVCG), Redstoneconnect (LON:REDS)

Leaf Clean Energy (LEAF) Invenergy Judgement - $1 nominal damages to Leaf but subsequent appeal obliges Invenergy to pay $36.4m by 21 June. Following receipt Leaf plans to announce a compulsory redemption of shares. Don't know what that means.
Audioboom Group (BOOM) 2 new and one renewed ad deals. No guidance on rev. from these.
Inspiration Health (IHC) receives, much later than they expected, regulatory certificates to sell upgraded Patient Warming System. Will "endeavour to make up for lost time and minimise the impact of the delay through putting in place a number of cost saving measures across the Group. We remain confident that the projected full year operating result remains achievable."
Live Company Group (LVCG) - 'Renewal of Soth Korea contract'. They can't even spell it right. 2 yr extension for BRICKLIVE. "New Agreement wavers the previous exclusivity..." Er, waivers? PR is W Communications, for all your poofreading requirements.
RedstoneConnect (REDS) Following sale of Systems Integration and Managed Services Divisions the CEO resigns but will remain employed for hanover. Chmn Frank Beechinor becomes CEO."Frank has significant experience in growing SaaS-based software businesses and is well-placed to implement the Company's strategy."

runthejoules

' Mobile Streams (LON:MOS) Mobile Streams, the emerging markets focused mobile media company [no-hope penny stock that sells knock-off games and gambling to people with no money on non-smartphones], today announces a partnership with Electroneum, a new cryptocurrency, made just for mobile, making it easy for users to trade and earn digital money.'
Hahhahahahhahahhahahhahahhahahahah. Peak 2017. What a joke. I hold.

momentofclarity

Good morning Graham, it might just sneak in Mkt cap wise but (LON: STHR) would be appreciated.

mercury61

I see today that Revolution Bars (LON:RBG) SR 73 has been demoted from Tiny Titans.

Mark Tughan

Morning all,

I'll second Record (LON:REC), where I'm also a holder.

Mark

Gromley

including Graham Norton.

I must have missed that, was it part of the evening 'entertainment'?

Anyway I would echo your thanks to David and the team - an excellent day.

I guess today's announcement by Redstoneconnect (LON:REDS) of the CEO stepping down explains why they were unable to present yesterday,

Lloyd Garvey

Alpha Real Trust (LON:ARTL) full year results this morning...
highlights :-

"· NAV per ordinary and A share 172.9p: 31 March 2018 (158.9p: 31 March 2017)

· Basic earnings for the year ended 31 March 2018 of 18.5p per ordinary share and of 23.3p per A share (18.6p per ordinary and A share for the year ended 31 March 2017)

· Adjusted earnings for the year ended 31 March 2018 of 3.5p per ordinary and A share (7.4p per ordinary and A share for the year ended 31 March 2017) *

· Declaration of a quarterly dividend of 0.6p per ordinary and A share, expected to be paid on 20 July 2018"

Brookeda

I think the more interesting thing on BPM is the share placement and new equity partner. Whilst the stock is trading at a discount to NAV the placement is at quite a discount to the share price. I hold and will take part in the placement as I see it has a positive move to grow the company and at the same time add liquidity to the stock.

JohnEustace

My first thought was that it was likely driven by Brian Marsh looking to retire and seeking a succession plan for his business.

Edit - not sure why your post has the thumbs down, it wasn’t from me!

fwyburd

Hi Graham, I'd love to hear your thoughts on Duke Royalty (LON:DUKE) (I mentioned yesterday) if you can fit it in. A new one for you I think and one well suited to your financial expertise.
cheers
Francis

I thought the same..
It says on his website he started more than 50 years ago ..so surely coming up to retirement age!

InvestedGeordie

Graham Neary now to deliver today's SCVR in the style of Graham Norton! Excellent!!!

Edinburgh Investor

Hi Graham, if its a fairly quiet day I would be interested to get your thoughts on the recent GYM (LON:GYM) update and acquisition. Looks like the expansion is going to plan so far.

jonno

Morning Graham

A further vote for B.P. Marsh & Partners (LON:BPM), time permitting. I hold and will participate in the open offer.

Jonno

Fishcake

Paul gave a good writeup to Norcros (LON:NXR) on 11th Apr, concluding "Stockopedia really likes it - "Super Stock" style, and very high StockRank. Maybe this share might suit very patient investors, who might eventually be rewarded with a re-rating;"
Results were issued on Weds this week and escaped comment, but revenue was up 10%, proift up 15% and that seems to have stirred the share price into life over the last few days.
Any comments welcomed.

bsharman

Hi Graham,

If you have the time and the inclination please could you look at the N Brown (LON:BWNG) statement from yesterday.

Thanks.

LeoInvestorUK

As it is really quiet, hopefully people won't mind me mentioning that Bonmarche Holdings (LON:BON) 's FY results are out on Tuesday. Graham covered their last trading update - click on the "Discuss" tab of the stock report to find that and other commentary. I've also gone on about them in comments on a number of occasions, including this comedy moment: https://www.stockopedia.com/content/small-cap-value-report-wed-11-apr-2018-gmd-air-blv-nxr-srt-352043/?page=1#20 - see the reply from Paul.

I'll be looking at a few things in particular in the results: Cash levels, anything about lease cost reductions on renewal and of course an update on current trading. On the last point I feel there is good cause to be optimistic. The last two months retail sales have been good and the weather has continued to be good or very good. It is quite possible that their customers were particularly affected by the earlier wintery weather and so the underlying picture is also not as weak as it appeared.

A few things to note about BON. Obviously it's small, with a market cap of £50m, but it is on the main market so there's stamp duty and no IHT exemption. It is thinly traded, with usually less than 10 trades a day, usually all small and with a market size of only 2000 / £2000. The quoted spread is generally large, but the true spread somewhat better - for example today it is quoted at 97-105 but trades are at 98.65-102.9. These factors may contribute to it being overlooked, and perhaps explain the short-term underperformance against Next (LON:NXT) :). I also have them as XD 4.6p 1st July.

[I have a full-sized position in Bonmarche Holdings (LON:BON) which I will gently trim in the event of a large rise. Furthermore, due to the small market size I might move the market if I dumped them all e.g. on a profit warning.]

Graham Neary

Hi Camtab - I am also a Record (LON:REC) shareholder and will be covering their results. Cheers. G

Norcros (LON:NXR) didn't entirely escape comment: https://www.stockopedia.com/content/small-cap-value-report-wed-13-june-2018-mul-ntbr-cnct-cay-373274/?comment=11#11 (also see the reply and earlier comment)

Small Cap Value Report (Fri 15 June 2018) - REC, NXR, BPM, GYM, BWNG

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