Small Cap Value Report (Fri 16 Feb 2018) - ANG, HAIK, PIM, CVS, MWE, EKT, ATY, JIM, ALY

16th Feb '18 by Graham Neary

47 comments 18034 reads

Good morning!

These are the stocks I've noticed so far today:

Angling Direct (LON:ANG) - pre-close trading update.
HaiKe Chemical (LON:HAIK) - proposed cancellation
Plant Impact (LON:PIM) - cash offer
CVS (LON:CVSG) - interim report
MTI Wireless Edge (LON:MWE) - final results
Elektron Technology (LON:EKT) - disposal of subsidiary
Athelney Trust (LON:ATY) - annual financial report

I'd also like to give readers the link for an anonymous, 3-minute survey which could help companies to engage with private investors better. It's available here (external link).

Also, time permitting, I will circle back to Jarvis Securities (LON:JIM) and Laura Ashley Holdings (LON:ALY) which reported yesterday.

Angling Direct (LON:ANG)

Share price: 98p (+1%)
No. of shares: 43 million
Market cap: £42 million

Pre-close trading update

We've covered the difficulties at Fishing Republic (LON:FISH) in recent months, so it's a pleasant change to see a fishing-related company that is performing well!

I haven't been able to find any difference in terms of the markets served by Angling Direct (LON:ANG) and Fishing Republic (LON:FISH). So presumably they are in direct competition.

Angling Direct (LON:ANG) is s a recent float, hitting the market last July. We haven't covered it in the SCVR before.

Today's update says that revenue for the full-year ending January 2018 was ahead of expectations at £30.2 million.

Like-for-like store sales are up 10%, which is the same pace that was reported at the interim results.

Scrolling back to those interim results, I see how important the online (e-commerce) platform is to Angling Direct - slightly bigger than store sales, and growing at a massive pace. The year-on-year growth rate reported today in online sales is 54%.

The outlook is "very positive" despite economic…

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matylda

16th Feb '18

Thanks - I think your post sums it up very well.

I am sure the Stocko guys will do what is right for the them and for the community.

Graham Neary

Cheers matylda! You too. Thanks for all your contributions. G

You're welcome, Peter! I'll take it as a compliment that you thought today's article was by Paul.

G

sharw

I agree - I think the original post was probably due to the outburst of advertising for streaming sporting events. Full marks to the people at Stocko who removed this very rapidly.

There are other places where the first few posts are moderated and I think that would be the best way forward at present here.

I am another that was drawn in by the SCVR and would not have subsequently subscribed but for that.

janebolacha

Graham, the FT today said that MUIB, the effective controlling shareholder of Laura Ashley Holdings (LON:ALY) , ought to take it private and put minority shareholders out of their misery. You are on the same page with your comments above.

I wonder whether Laura Ashley could become part of the divorce settlement for Tan Sri Dr Khoo's former wife, Pauline Chan. Or perhaps go as an asset into the religious foundation, presently inactive, that Khoo has set up. Simply speculation, of course.

The writing has been on the wall for years. There were several threads on here in 2015 which foresaw just about every aspect of this management disaster.

Graham-

Many thanks for the link to the Athelney Trust (LON:ATY) report. Brilliant! From the wallpaper tax of 1712 to fund managers unable to sit still via the Corbynista youth's lack of experience of life under nationalised services it had it all. Highly recommended.

rhomboid1

Great report ..re Elektron Technology (LON:EKT) any investor needs to get comfortable with the extraordinary level of remuneration of the BoD & the rather interesting history of the business..it’s not one for me as trust in mgt is essential.

JohnEustace

I did notice that Athelney Trust (LON:ATY) started to invest in Debenhams last year. I wonder how funny the commentary on that will be next time?

jonesj

The owner & only the owner of Stockopedia will decide what is paid & what is free. That's how capitalism should work. Personally, I have read the articles for free for as few years, then when I got ever more disenchanted with the bugs on the free Digital Look site, I subscribed to Stockopedia without a proper survey of the alternatives.

That's a combination of the reciprcocity tendency & knowing this site will be good.

Thanks Graham, for the recommendation to read the the Athelney Trust (LON:ATY) report. It's an excellent read, very informative.

The one part I cannot figure out is their statement that "For those patient investors who subscribed for Athelney Trust shares in the IPO of 1994, the annual return has now risen to 17.8 per cent net of basic rate tax on the capital originally invested."

From normal sources, the price seems to have gone from 78p to 262p in 20 years, so a CAGR of 6.2%. So to get to an annual return of 17.8%, I presume they need a dividend of over 10% or some astonishing performance for the first 4 years, outside my 20 year range. There is no evidence of such a dividend.

I'll be quite happy if someone can correct my maths, since I'm always pleased to allocate capital to anything where the management talk sense AND have a CAGR of 17.8%.

Treacle2

Athelney Trust well worth a read. Thanks Graham.

peterclothier

Aghh apologies Graham

Athelney Trust (LON:ATY) started at 50p and floated on AIM the following year - see page 9 of

http://www.hubinvest.com/AIMPDFJune2015_69.pdf

Custom charts on MoneyAM will take you back to the first quote at 53p.

My spreadsheet tells me that is CAGR of 7.1% but takes no account of dividends. Perhaps the 17.8% is with dividends reinvested.

A 10% dividend would be rather unusual. I'm not seeing how they get to 17.8% CAGR yet

bestace

He's not making a point about capital gains or CAGRs, he's just saying that the 8.9p dividend represents 17.8% of the 50p IPO price.

timarr

17th Feb '18

Hi Si

'Fraid I ain't got a clue ... still hopeful of more volatility though. Back in the old days spikes like last weeks only really shook out private investors in small caps but now the insane robots algorithmically ensure even large cap stocks get hit. I really don't think there's ever been a better time to be a fundamental focused private investor, even allowing for the FCA's ongoing mission to exterminate us.

And on top of that we have Stockopedia, offering factor based analysis for pennies a day. I used to spend hours doing what I can do here in minutes.

The only surprise last week was that no one popped up and started lauding gold. Perhaps all the gold bugs have switched to Bitcoin? :-)

timarr

simoan

Hi timarr,

'Fraid I ain't got a clue ... still hopeful of more volatility though. Back in the old days spikes like last weeks only really shook out private investors in small caps but now the insane robots algorithmically ensure even large cap stocks get hit. I really don't think there's ever been a better time to be a fundamental focused private investor, even allowing for the FCA's ongoing mission to exterminate us.

Of course, it's knowing you haven't got a clue that's the most important thing! My question was tongue in cheek because I never had my tin hat on in the first place and I've been buying more than usual recently - topping up existing positions and opening a new one. Who knows what the future holds, all I know is that I've been buying some quality small and mid cap companies at reasonable valuations.

And on top of that we have Stockopedia, offering factor based analysis for pennies a day. I used to spend hours doing what I can do here in minutes.

Yes, I agree. The StockReport is a thing of great beauty and I hope it doesn't get changed too much in any site upgrade. I live in hope about that, but my opinion of website software developers is such that my expectations are low, so the good news is that it will not be difficult to exceed them :-)

Whilst on the subject, the one thing that slightly annoys me is the number of trackers there are following us around the Stockopedia site. I have no problem with this if people are using the site without paying up for a subscription, after all, nothing in life is free, but if you're paying your subs I'm not sure you should be followed around by advertising trackers. As I write there are 11 trackers on this page, including 4 advertising trackers. To a certain extent I can live with the site analytics and interaction stuff, but I don't believe it's fair for paying users, especially those of us who take their on-line privacy seriously, to be followed around quite so much. Hopefully, this will be taken into consideration as part of any site upgrade.

All the best, Si

Si,

It is my belief that the upgrade is taking a wee bit longer than anticipated as the Stocko guys wish to ensure the "old" version remains available "as is" for those not wishing to use or those that do not like the new version.

As I say, this is just my belief.

Hi Si

Yes, I'm a selective buyer at these levels - topped up Jarvis Securities (LON:JIM) on the falls this week and opened positions in Relx (LON:REL) and Hargreaves Lansdown (LON:HL.) - I can't say I'm hugely comfortable with the latter, but I do buy the Nick Train argument of the increasingly dominant franchise. We have a mini-boom for financial advisors going on, and increasing uncertainty in a low interest rate world plays into their hands. MiFID, in my view, is a red herring - if affects everyone and the better companies will deal with it better. And it all helps to drive private investors into managed platforms.

There's plenty of other stuff on my watchlist, but I dislike paying over the odds for future growth and even with the pullback I'm struggling to justify some of the multiples. I'll happily hold overpriced shares but I'm less happy buying them.

I'm not sure why, but I don't see the trackers. I had to switch from Chrome to Firefox recently, and I haven't had a problem with either browser.

timarr

The only tracker that Ghostery is detecting for me in Chrome as I type this is Heap.
"Heap automatically captures every user action in your app and lets you measure it all. Clicks, taps, swipes, form submissions, page views, and more."

Edit: If I go to the dailymail site, then Ghostery sees 41 trackers there. Then when I come back here there are 25 showing. So presumably some are loading from other sites and staying active while the browser window is open? I am not an expert.

Another edit: The 25 seem to be here still when I close the browser and return. There are 17 advertising trackers, 2 customer interaction, 5 site analytics, and Facebook Connect.

samanddee

19th Feb '18

Thanks Graham for the post on JIM

Small Cap Value Report (Fri 16 Feb 2018) - ANG, HAIK, PIM, CVS, MWE, EKT, ATY, JIM, ALY

Angling Direct (LON:ANG)

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Graham Neary

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