Small Cap Value Report (Fri 21 Dec 2018) - TUNE, CRW, IDEA

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27th Dec '18 by Paul Scott

46 comments 13400 reads

Good morning, it's Paul here.

I'm putting in one final & unexpected pre-Christmas appearance here, as I had an interesting company meeting this week. So I offered to write this (Friday's) report, and give Graham the day off, incorporating my company meeting with Ideagen (LON:IDEA) this week. Plus any other company news which might appear on the day itself.

Incidentally, both Graham and I are pleased that the readership count has held up here, in such dire market conditions. You do sometimes wonder if it's worth bothering to write anything, when seemingly everything is tanking every day, regardless of newsflow.

Focusrite (LON:TUNE)

Share price: 472.5p
No. shares: 58.1m
Market cap: £274.5m

AGM trading update

Focusrite plc (AIM: TUNE), the global music and audio products company that trades under the Focusrite and Novation brands around the world...

This is a brief, but positive update;

"When we announced our full year results on 20 November 2018, we commented that trading for the year to date was broadly similar to the prior year.

November 2018 was a strong month and our revenue for the financial year to date is now ahead of the comparative period last year."

If we look at the Stockopedia graphs, the current forecasts (lighter blue blobs below) show a flattening of revenue & earnings. Clearly that is not enough to justify a forward PER of 26 (which implies much stronger growth);

My opinion - this is a good update, from a good company. However, in current more sceptical markets, the company needs to deliver stronger growth (hence more forecast upgrades) to justify the current valuation, let alone an increase in share price.

I think this is why the share price did not react positively to this announcement - partly due to people winding down for Xmas perhaps, but also that continued good news is already baked into the existing share price.

Craneware (LON:CRW)

Share price: 2305p
No. shares: 26.7m
Market cap: £615.4m

Trading update

21 December 2018 - Craneware (AIM: CRW.L), the market leader in Value Cycle solutions for the US healthcare market, notes the…

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Effortless Cool

21st Dec '18

Hopefully "insightful", rather than "inciteful"?!

The latter is likely illegal.

Happy Christmas to you too, Mark, so long as you do not let Paul and Graham encourage you to too many acts of violence.

cojode

Dear Paul and Graham
I would like to echo the view that the value, insight and humour you both to bring to this site on a macro but particularly on a share specific basis is both enlightening and entertaining in equal measure. After 35 years of investing this is the only commentary I read. The rest (and there are plenty of them!) can't hold a candle to you guys. Best wishes and I hope you and your families enjoy the festivities. I look forward to catching up when the market re-opens.
PS Paul I am pleased to see that your twitter feed is still running. I think you threatened to close it down. Your late night/early morning revelations should be compulsory reading for all insomniacs.

truegent

nice reassuring trading update from Craneware (LON:CRW) since the sp has tanked with everything else recently, however when it peaked at £36 a few weeks back it was trading on a p/e of over SIXTY times so i think even after the fall its still highly rated at twenty quid. i sold half at £24 and still hold the rest. fantastic company, proper warren buffet business. highly cash generative, so much cash on the balance sheet and no debt. quality. merry xmas !

gary3980

Would echo the sentiment that these reports are most definitely worth writing - possibly even more valuable in these times. "Be greedy when others are fearful", indeed! Easy to say in good times, harder in bad!

Merry Christmas to all the community at Stockopedia and many thanks to Paul and Graham for these brilliant reports throughout the year. They would be missed if they stopped, and I don't think there will be many- if any -readers who haven't benefited from them in one way or another.

barnetpeter

Would be interested in thoughts on SGI the stamps people. Remember going there at Xmas over 50 years ago. Late news today

5 million loan at 5 per cent....repayable in 2023....gives them a chance

gbjbaanb

I have a sulk on :-) "shareholders" didn't reject the proposal to finish winding the company up (which has been on-going for over a year), Thalassa (as a major shareholder) did. Nobody quite has a clue why they'd do this - LSR have a handful of properties left to sell (9 IIRC), so they're just going to make the lawyers rich.

Mind you, Thalassa Holdings (LON:THAL) are issuing preference shares to existing holders that come with 10 votes per share, that lose the entitlement once sold. So the voting rights will migrate to the point where the board (or I assume Duncan Soukup) can outvote the rest of the shareholders. Its all looking rather dodgy.

herbie47

Merry Christmas to Paul, Graham and everyone else who is on here, hope 2019 is a better year than this one.

Edward John Canham

Thalassa Holdings (LON:THAL)

The MV of this company is £15m - as far as I can see there is no logic to moving up to the main market. I conclude this is all about ego.

The preference shares are a profound issue. If they are allowed to move to the main market with this in place then any distinction between AIM and the main market is invalid.

Phil

mustwatch

During these interesting times of great buying opportunities we need your posts more than ever. Keep up with the great professional work and all the best

rkells

Paul - keep writing. It is equally important to analyse and comment on the way down.

tony akram

"You do sometimes wonder if it's worth bothering to write anything, when seemingly everything is tanking every day, regardless of newsflow."

I would say that it is even more important when markets are so volatile as both of you offer valuable insight .

To both of you keep up the excellent work that you do I would be lost without you guys

Merry Christmas

Armorduck

Yes please keep the reports coming. They are very much appreciated, in good times and bad. Perhaps more so in bad! The different perspectives from Paul and Graham are I think really useful for us followers to try and find our way in this exciting but dangerous investing world. Happy Christmas and New Year!

DJCP

Paul,
"You do sometimes wonder if it's worth bothering to write anything, when seemingly everything is tanking every day, regardless of newsflow"
This may give you some insight into what to do ... If it's good enough for the BBC ! lol
https://www.bbc.co.uk/news/entertainment-arts-39633603
... on 18 April 1930, the BBC's news announcer had nothing to communicate. "There is no news," was the script of the 20:45 news bulletin, before piano music was played for the rest of the 15-minute segment.

@Mark Clenshaw #26
"Others have already said it but a further sincere word of thanks to P and G for their excellent and inciteful analyses."
On a share-related website, mentioning 'P and G' immediately bought 'Procter & Gamble" to mind ! lol ... perhaps Paul and Graham should now be jointly referred to as 'The Cleansers' - you may have to be >50 years old to understand that, but who would be Roger Moore, and who Tony Curtis ! lol

Docharty

22nd Dec '18

Paul and Graham - just to add my thanks to you both for your excellent work. I agree with some of the comments above that we need your analysis now more than ever. If we're to success as investors it's important to make the distinction between speculating on price movements, and investing in quality businesses. If we're truly doing the latter, then we need your help to identify those businesses and to buy into them when the prices are most attractive - which, in many cases, is right now.

Camtab

23rd Dec '18

A very happy Christmas and Prosperous 2019 to both of you and your families. Many thanks for being my constant companions, weekday mornings wouldn't be the same without you. I still have to work a lot on my discipline but generally I think you are slowly making an investor out of me. All the best.

matylda

Paul - I've had many a long "working lunch" but seriously !!!!

Only kidding - Much thanks and appreciation for all you and Graham do - Have a great great Xmas and New Year. Long may you both continue...

ps - I am sorry for doubting you cycled home that night :)

stargate2009

Greetings to all.
Just starting out and find Graham and Pauls articles very interesting especially in this bad climate, I have only known markets generally going up so this is an sobering time, if I can learn something who knows I may come out of this better prepared for next time.
Happy new year.

croftboy

26th Dec '18

Dear Paul and Graham, I look forward every day to your reports. You have helped my investing enormously over the years and it's very much appreciated.
Hope you both have a lovely Christmas and new year.
I look forward to reading your reports again next year.

MichaelFBS

28th Dec '18

Dear Paul and Graham

Just wanted to echo various other comments here today (as well as giving them a thumbs up) and thank you deeply for your superb analysis and commentary in the SCVR this year and past years. For me it is when the market conditions are dire (the past three months have been the hardest of 4 years investing - watching Fevertree Drinks (LON:FEVR) halve for instance when it is your largest holding) that I find reading your and Graham's columns the most useful and calming!

Your column is the ONLY investment blog/comment/article I make sure I read every day since I joined Stockopedia in May 2012.

Frankly I am amazed at how you find the time and focus to do these reports every day and if in 2019 you feel like a duvet day or do take them! You would be missed but not nearly as much as if you stopped writing all together.

You might find the book "Why We Sleep" - Matthew Walker interesting and really reinforces the importance of sleep and rest.

https://www.amazon.co.uk/dp/B06Y649387/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1

Best wishes for the New Year.

Michael

Paul Scott

6th Jan '19

I've just seen all these lovely reader comments.

Thank you everyone & it's much appreciated!

Regards, Paul.

Small Cap Value Report (Fri 21 Dec 2018) - TUNE, CRW, IDEA

Focusrite (LON:TUNE)

Craneware (LON:CRW)

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Paul Scott

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