Small Cap Value Report (Fri 3 Sep 2021) - CMCX, ECEL, JSG, PPH

3rd Sep '21 by Paul Scott

49 comments 9025 reads

Good morning, it's Paul & Roland here with the SCVR for Friday.

I'm writing this from an AirBnB apartment in Bormla, near Valletta in Malta. I've got good aircon & wifi, so can write these reports from anywhere like that. Hence I thought why not grab a fortnight in the sun? Malta recognises England's NHS vaccine proof app, so it was very straightforward to get here, no additional testing required, and just a couple of forms to fill in online.

Agenda -

Paul's Section:

Eurocell (LON:ECEL) - really good interim results, I'm impressed! Dividends are resuming, the balance sheet is strong, and it gives a positive outlook statement. Valuation looks reasonable too. The main question is how to value it? Where are we in the earnings cycle? That's the key question.

Roland's Section:

Cmc Markets (LON:CMCX) - Shares in this financial trading firm crashed yesterday when it revealed a slump in client activity. This could be a temporary slump, if volatility picks up again.

Johnson Service (LON:JSG) - A strong recovery seems to be underway at this textile rentals group, but the shares already seem priced for a return to normal. Not sure there’s much value here.

Explanatory notes -

A quick reminder that we don’t recommend any stocks. We aim to cover trading updates & results of the day and offer our opinions on them as possible candidates for further research if they interest you. Our opinions will sometimes turn out to be right, and sometimes wrong, because it's anybody's guess what direction market sentiment will take & nobody can predict the future with certainty.

We stick to companies that have issued news on the day, with market caps up to about £700m. We avoid the smallest, and most speculative companies, and also avoid a few specialist sectors (e.g. natural resources, pharma/biotech).

A key assumption is that readers DYOR (do your own research), and make your own investment decisions. Reader comments are welcomed - please be civil, rational, and include the company name/ticker, otherwise people won't necessarily know what company you are referring to.

Paul's Section

Eurocell (LON:ECEL)

267p (yesterday’s close) - mkt cap £298m

Half-year Report

Eurocell plc is a market leading, vertically integrated UK manufacturer, distributor and recycler of innovative window, door and roofline PVC…

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portugull

3rd Sep '21

Thank you Ken and others who responded today to my post on Fireangel Safety Technology (LON:FA.)

Early last year Fire Angel raised £6 million in an Open Offer & Placing and earlier this year they did the same for £9million.

I am going to contact their Customer Service Dept in a months time and see if things have changed!

I am a great believer in the power of the Internet and Stockopedia to bring about change for the better. We shall see. In my Diary for the week commencing 4th October.

Dieselhead2

Hi Paul, I appreciate this relates to yesterday's section from Roland on Headlam, but do you have anything to add to Roland's comments? I took a starter position yesterday and will look to add on weakness..

ps enjoy the sunshine and break...

DH2.

Alan Partridge

Jonno,

Agreed. There are definitely some winners in there. And the risk is spread somewhat.

AndyCDC

Ive held DSCV for 5 years since it was a small Cap and its certainly done well. Good company IMHO

Paul Scott

Hi DH2,

Re Headlam (LON:HEAD) (I don't currently hold) - this company reported results, and it was my travel/settling in day to Malta, hence so far I'm lagging behind, and have not looked at the results myself, although I did quickly read Roland's excellent review.

I was forced to close some positions in my geared account a little while ago, when a big margin call arose, and I decided to close HEAD, in order to avoid having to close other higher conviction positions, but I still like the company, and it still looks good value.

I'll take a look over the weekend. I see it's fallen about 10% recently, so that could be a good time to buy back in. Leave it with me, and I'll report back next week, although I can't personally buy back in as I don't have any spare cash. So HEAD would have to be sufficiently compelling to make me want to sell something else.

Decisions, decisions!

I see that a smaller competitor I think run by the former CEO of HEAD has recently floated, or is thinking about floating? Can't remember anything specific.

Best wishes, Paul.

Fireangel Safety Technology (LON:FA.) has looked an absolute disaster area for a long time in my view, I wouldn't go near it personally.

shanklin100

Hi Roland, Re Cmc Markets (LON:CMCX) , my thoughts are as follows:

Why couldn’t the company have the simple courtesy to advise the market as to the likely range of PBT outcomes associated with Net operating income of £250-280m?
Are we really credibly to believe the company was tracking for £330m NOI on 27th July, at the time of the prior TS, and that everything went wrong purely in the 5 weeks since then?

I agree Cmc Markets (LON:CMCX) may now be very cheap, but do I really want to be invested in a company that I now believe is not being open and honest, in a timely fashion? Perhaps it’s now cheap enough that it’s okay by some people to not necessarily know what’s going on.

For me it’s a reputation issue and if I cease to trust management, I feel obliged to sell. So I sold yesterday at 08:05, as soon as it exited auction,

Thoughts welcome. Best wishes, Martin

gus 1065

Possibly slipped under the radar today, but Science (LON:SAG) withdrew their 6.5p indicative offer for Tp (LON:TPG) this afternoon citing non-cooperation by the TP board. Will hold their current 24% investment as a strategic stake and potentially increase to a maximum 29.9% in the open market. Reiterate their desire for a shareholder vote of confidence in the TP board as soon as possible. Probably not the last word here.

https://www.investegate.co.uk/...

Tp (LON:TPG) shares down 8% to 5.5p on the news.

Gus.

ijh9547

Does anyone know how to trade on the LSE who lives in France? I moved to France and have been advised by my stockbrokers (Barclays) that I may no longer trade. Unfortunately they have no suggestions as to how this could be overcome. Does anyone know a stock broker who could help?

Indeed, last time I was in Malta, an absolutely lovely Stockopedia subscriber contacted me & bought me lunch at the Royal Yacht Club with his charming partner. It was a lovely afternoon, and I've wracked my brains & searched emails etc, to find his name & details again, to reciprocate, to no avail.

So if any Stockopedia subscribers are reading this, and fancy a beer or coffee in Malta (Valletta area), then get in touch, I'd love to meet up & chew the cud about small caps. Or anything really!

As Count Arthur Strong once said, our testicles spread far and wide! Actually no, delete that, as it's the sort of thing that creates a shit storm amongst the humourless.

Took me a while to work out what you meant! :-)

Thanks Martin,

I've been there c.2019 (the car museum). It was shut. So I had to hang about for a few hours to get the bus back to Valletta. They've blown their one chance with me LOL! ;-D

Actually, thinking of car museums, I'm thinking about starting a museum of Bournemouth Jaguars - my XJS is immobilised due to a malfunctioning alarm (not helped by me ripping the wire out of the actual siren, as it was so noisy), and of course my almost perfect V12 Daimler Double-Six being too good to use. Also she seems to have a 4500 rpm rev limiter, which stops the V12 thunder just as it's really getting going.

I can see why Maggie and the Queen had Daimler Double Sixes. They are precisely balanced V12 150 mph vehicles, mine has all the suspension bushes replaced last year, and has 35k miles from new, so it runs like a perfectly balanced sports saloon.

Paul.

4th Sep '21

Good morning Paul, thanks very much for your reply, it's really appreciated.

csmcsm

Likewise (LON:LIKE) is the competitor, floated about 2 weeks ago on AIM

Wilbraham

A good friend of mine has lived in Thailand for 10 years and has no problems using ii (including the recent transfer from Eqi). However, this could be because he gives my UK address for any physical correspondence (none, as entirely on-line) and still pays UK tax and retains a UK bank account. Possibly this is more a tax-jurisdiction issue?

jimrog64

Jonny Vegas bought one of those old buses from Malta and had it shipped to the uk to be done up for his glampsite. If anyone saw the TV programme the bus looked like a total rust bucket and definitely not a sound investment

JohnEustace

Yes, I would think if someone completely moves to another country they would need to open an account with a local broker in their new country.

https://www.angloinfo.com/how-...

dsh

Hi Paul, recently spent three months filming at the studios there. Different kind of boat… apologies completely off topic.

Then for a French resident/tax resident I'd expect Flatex DeGiro would be perfect, being an EU entity https://flatexdegiro.com/en/co... Much lower commissions than many UK online brokers, sometimes offset by poor dealing prices for UK stocks. Maybe Saxo also. The questioner was a little vague as to their status.

peterg

5th Sep '21

Interactive Brokers is another good option. Low costs, wide range of global markets, ability to hold and trade in multiple currencies. Not always the most user friendly, but came out top of a recent review of international brokers available in France.

Of course, they don't do ISAs, but then a non UK tax resident is not eligible anyway.

Small Cap Value Report (Fri 3 Sep 2021) - CMCX, ECEL, JSG, PPH

Paul's Section

Eurocell (LON:ECEL)

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Paul Scott

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