Small Cap Value Report (Fri 24 Dec 2021) - SNWS, MEAL

23rd Dec '21 by Paul Scott

127 comments 15005 reads

Good morning, it's Paul here with the SCVR for Christmas Eve.

Preamble from Paul

We're hearing increasingly positive news on covid, and I hope readers have taken advantage of the relief rally this week. It's certainly straightened out (partially) some of the problems in my portfolio. Also, as mentioned in Mon & Tues SCVRs, I've been buying this dip on the basis that reliable data from South Africa seemed to be pointing towards omicron being less deadly than delta.

Rather than being a Santa rally, the surge in some shares this week looks more like a relief rally re omicron, judging from travel & hospitality shares which seem to have rallied particularly well. I nipped in at the opening bell on Tuesday, and bought some Carnival (LON:CCL) and Jet2 (LON:JET2) both of which I think are good companies. Plus of course Saga (LON:SAGA) (I hold) has bounced strongly. Even Boohoo (LON:BOO) (I hold) has come off the recent lows, and I've doubled my position size there this week, despite sitting on running losses which would have paid for a nice 4/5 bedroom house in a pleasant area down South. Never mind, luckily I don't need another house, so have got to be philosophical about these things, there's no point in crying over spilt milk, and I think the share should recover, at least partially.

There are still plenty of bargains out there in my view. Although I continue to see the risk of more profit warnings. We've got ongoing supply chain problems, plus the large number of omicron infections means that lots of companies are struggling with many staff being off sick. More importantly though, it now looks as if the UK (and gradually other countries) should be reaching herd immunity through vaccinations of c.80% of adults, and the remaining 20% having recovered from covid naturally.

There are also now much better treatments for the sick coming on stream, including new anti-viral drugs. Vaccine makers have said they can adapt the vaccines for new variants in about 100 days. Hence could we tentatively be looking at the end of this pandemic? That would be very bullish for shares. Or possibly it changing into something that can be managed, like seasonal flu, with updated jabs each year for those that want them? I think that's how it's…

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DaviStoVest

24th Dec '21

Like before, Stocko blocked my initial message and tried to lose me in the ether in its time-honoured infuriating fashion ... but, for once, I out-foxed the system. This time I made a copy as reposted below.

OK, Paul, unfortunately that flippant response is what I expected. It's your way.

Seriously, it's not about you (are you able to see that?), because you do a great job in relation to a thin sliver of the UK stock market. It's about Stocko. Stocko's bandwidth is incredibly narrow compared with the investments of the community that it aims to serve.

I am interested in 'small caps' and I hold a good few. But my 'strategy' is a lot broader (I imagine yours is too) and I'd like to be able to get the same sort of support in relation to my wider actual/potential portfolio. Edmund's really interesting and thoughtful stuff is the closest that Stocko gets to what I would expect. But it's a sideshow as things stand.

Whenever I make this argument ... which I fairly often do ... I'm patronisingly told that I (we all) can find great mid- and large-cap coverage everywhere and anywhere ... and Paul usually also gets a bit randomly rude to amplify things a little bit uselessly (despite it's not about him). But I am looking for a good service, covering a wide spectrum of investment opportunities all in one place. Stocko has the data and analytics across a broad range of LSE-quoted companies (for my package) ... but then limits its commentary to a tiny proportion of this ... wtf?. I just don't understand this.

P.S. in case anyone thinks I am totally weird to be posting on Stocko in the early hours of Christmas morning, I live in a time-zone that is way off GMT. :-)

Gostevie

Sorry, duplicate post.

Hello Paul, and best wishes for the season. I think the mix between general market commentary and stock-specific analysis is just right. For me, it is essential morning reading.

My only (hopefully constructive) suggestion is that the comments section should be more strictly moderated when it drifts off-topic or degenerates into personal attacks.

Very best wishes,

Steve

Mark B

25th Dec '21

Merry Christmas all

Antehelion

perhaps a weekly market preamble/update on a Friday when it is generally quieter in terms of company news?

i still think the gap scvr fills in terms of detailed small company analysis is hard to find elsewhere and wouldn't want to sacrifice too much of this rare detail for wider info that can be seen elsewhere.

a regular weekly preamble from a small caps perspective would definitely add value however imo.

cheers Paul, Jack and Roland and Merry Christmas to all.

mevans6890

stocko would lose a lot more people, me included, if they removed the small cap focus. If you don’t like it and the approach is very clearly set out then yes go elsewhere.

I like the pre-amble where it concerns matters such as portfolio management. When to sell is often the hardest issue for a lot of people. Not always hard to pick winners but a lot harder to know when to take money off the table etc..
however, for me the most valuable part of the SCVR is the detailed individual company analysis. The quality is unbelievably good - it throws up new ideas regularly. The insight into how you assess a company is extremely valuable.thank you very much for all your hard work and so openly sharing your ideas and experience and of course to Jack and Roland too

I'm happy enough that Paul speaks whenever he thinks he has something to say. No need for a system.

@mevans ...it's great that Stocko covers small caps so well and has a clever, witty and knowledgeable/interesting team focused on that job. It's just that I buy and hold large stocks, miners, mid caps, and trusts, too. And, mostly, my money is not in small caps, although I am interested and keep some of that stuff in my portfolio.

I am constantly disappointed by the lack of coverage that the great majority of my holdings receives in Stocko. And I will cancel my subscription if this does not soon change. I am not seeking any reduction in the coverage that small caps receive. I think it's great, and I know many value it highly and are here largely because of it. For me, that is not the case, however. I don't want to leave ... but I will if Stocko cannot find a better balance. It doesn't offer sufficient value to me.

Hey ... that won't be the end of the world. Not for Stocko, not for fellow subscribers, nor for me. But I think Stocko is missing a trick or two. Why does it leave such huge gaps in its focus?

Norfolk'n'Good

26th Dec '21

The only think I would say, is that we build up an archive here, which we can all refer back to, and see what the balance sheet position is, pension deficits, etc. So it's arguably a good reference bank.

Hi Paul

I for one think that last line is an understatement. There's no argument about it all in my mind - it is an extremely good reference bank that I (and I'm sure others on here) find incredibly useful. I've always thought it must take a long time and a lot of hard work to put these reports together but I feel they give such valuable information and insight they are indispensable.

Best wishes from Norfolk!

Rusty2

I have been on Stockopedia for around 6 years now, I’m seeing more coverage of large and mid caps than years ago. But apart from Boohoo (LON:BOO) which attracts a lot of attention there seems to be very little interest on most of those posts. I remember the £BP article which l hold, the post attracted a few posts but most were debating about large cap coverage not about Bp (LON:BP.) I really don’t want Stockopedia to use their resources on stocks such as the largest FTSE stocks. Small caps get a lot of coverage because there is a lot of interest, information elsewhere is not well covered, also there are a lot of them but I feel there could be more coverage on the mid caps such as between 800m to 2bn. Which stocks would you like to see covered?

Maybe you have a different view from most Stockopedia subscribers, as I believe you are not located in the UK?

DavidMcCabe

A big thanks to Paul, Jack and Roland for the coverage, and for the often enlightening comment BTL too. My personal view is that the detail around individual stocks is invaluable, although I also enjoy the market commentary and other more general comments too.

On the subject of small cap vs mid and large cap coverage, although it would be great to have an equivalent level of coverage of the latter, that we get for the former, I think that would involve getting a whole new team involved, as it would be too much for the current commentators. My personal focus and investments, are on micro and small cap companies, as that is where the evidence suggests that the widest range of performance exists, and hence the greatest potential gains (or losses!) can be made.

Paul Scott

bAA hUMBUG!!! :-d

Sending you a big supportive & kind kiss, on Boxing Day. Mwah!

As Noddy Holder says, ITS CHRISTMAS!

Let's talk about all this nonsense in 2022. It can keep, it's only shares!

Best wishes, Paul.

yiannos1

27th Dec '21

Flippant response!!!

I liked that , nice one , not far from the truth.

BIACS

28th Dec '21

How do you know the elephant's name? I would have gone for the optional Buffalo Arthur personally... :-p

bullhead

Haven’t been on here since Christmas Eve have been to busy with family and friends

Agree with your views on Covid Paul the news does seem to get better by the day markets do seem to be moving on to a post covid view

Although it would be nice to have more coverage of larger stocks think you are right to stick to smaller stocks in general as you can’t cover everything and it’s a good niche and your more likely to find something there that the Market has missed

Hope everyone had a good Christmas

Tonysaparito

Thank you Paul for all that you have written and shared with us during 2021.I hope you and your Mum had a lovely Christmas break..Please can you tell us when we will see the results of the 2021 Share tips and the entry form for the 2022 competition..Best. Wishes

ridavies

29th Dec '21

Good morning all on Wednesday morning. I enjoyed Paul's Christmas Eve review. I am not a regular visitor to Trust Pilot but thought that I would have a look at the ratings for a number of companies, given the mention of poor reviews for Joules (LON:JOUL) especially recently.

As a holder and a big loser after the 30% hit on the day of the last market report, I am particularly sensitive to what happens next and I didn't like Paul's comment about the possibility of a further profit warning one little bit!

My choice of companies on Trust Pilot may not have been the best, but these are my findings for better or worse. Before I give the figures, I think there are a few special factors at work here right now.

First, customers are particularly sensitive around Christmas. Deliveries = presents = special meals, and so immediacy is particularly important.

Secondly, customer sensitivity is probably heightened too, so customer service - or lack of it! - becomes increasingly important too. (I am in that category. I can readily forgive a fault if it is put right quickly and I am treated promptly, fairly and courteously)

Thirdly, Covid 19 levels are really affecting staffing, and distribution issues which have been covered in depth for weeks/months now are having big effects - all when the seasonal volumes of business are at their height.

Here are my figures

Total Reviews Excellent/Good % Bad/Terrible %

Joules 5,851 74/9 2/13

Next 5,339 18/5 8/66

M&S 6,095 20/4 9/63

ASOS 138,103 67/5 2/24

Boohoo 177,663 63/14 6/11

AmazonUK 20,291 36/8 6/46

Make of those what you will. Some were a bit surprising to me. Given the time of year, and reading the most recent comments, all were likely to be worse than normal and heavily polarized. The only significant differentiator seemed to be, and especially frequent with Boohoo, if the customer spoke to someone personally then the matter was usually dealt with to the customer's satisfaction, and much appreciated.

For Joules vs Next vs M&S, probably the most similar companies, Joules doesn't look so bad in comparison. However, it will be their absolute figures which will be affecting their business so in the end the comparisons are probably not very meaningful. for Joules.

Hello Boule54 Which SONG is that then? There are 3 to choose from on Stocko, and I suspect yours is a fourth?

Small Cap Value Report (Fri 24 Dec 2021) - SNWS, MEAL

Preamble from Paul

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Paul Scott

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