Small Cap Value Report (Fri 4 March 2022) - TENG, AXS, DPEU

4th Mar '22 by Jack Brumby

82 comments 10255 reads

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

Jack's section:

Ten Lifestyle (LON:TENG) - FY adjusted EBITDA to be below expectations due to reduced member requests following Omicron disruption. This is in the context of previous downgrades. This group has yet to make a profit and is not self-funding, and I don't feel as though that is reflected in the valuation. Not for me.

Accsys Technologies (LON:AXS) - an interesting company, which is spending quite a lot of money building substantial production capacity for its wood products. It looks like the demand is there, but the company has frequently raised new equity in order to finance capital investment. If it is nearing the end of a capex-heavy phase, then it could soon become sustainably profitable, and revenue growth looks set to continue. I’d like to learn more, but I’m not tempted to prioritise it at the current levels.

Dp Eurasia Nv (LON:DPEU) - short comment to acknowledge concerns over Russian business following a steep fall in the share price.

Explanatory notes -

A quick reminder that we don’t recommend any stocks. We aim to review 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 are analysing the company fundamentals, not trying to predict market sentiment.

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.

Jack's section

Ten Lifestyle (LON:TENG)

Share price: 106.5p (pre-open)

Shares in issue: 83,741,801

Market cap: £89.2m

Trading update and notice for half-year results to 28 February

This is a ‘global concierge platform’, that helps wealthy and mass affluent individuals and their families to organise leisure activities. It typically partners with blue chip corporate…

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Caper4

4th Mar '22

And corrupt rulers

Roger Baron

Good luck which ever road you take. Personally my view is there are 2 ways this will pan out. Either the market will recover - it's impossible to get your timing right so sit it out.

Or It won't recover in which case your cash isn't going to be worth anything either.

TheFloatingInvestor

House renovation is a great investment that will yield better returns perhaps

Nice to hear!!

Deegee Eff

That is a risky bet. Will Russian's who have suddenly found themselves 30% poorer in a dead economy with 25% interest rates blame Putin or the West ? if it is the West as I expect whoever replaces Putin may be even worse.

gmtrader

hedging with gold producers is another option in the current climate. Precious metals is due a run after a few years of decline.

Tommy H

Well despite putting most of my SIPP to cash, I have taken an opening position in Legal & General (LON:LGEN) today within my ISA whilst the Chart is appalling, not that I am that good at reading them or base life on those, it just is getting to that point where you say it has to be a good decision really.

Doug2b will probably suddenly let me know something has changed that I have totally missed, held in other family members for a while, just not mine...watch this space!

Bouden54

Yes Golden Prospect Precious Metals (LON:GPM) up 6% today and on a big discount (around 20% last time I looked). Good way to get diversified exposure to gold producers without individual mine risks.

ed_miller

"I can confirm that Stoli and Smirnoff are made in Latvia, NOT Russia! Stoli also has operations in Ukraine."

Russian ownership though?

gus111222

The SMX: FTSE SmallCap Index and AXX: FTSE AIM All-Share Index trends on Google Finance helped my decision to convert to cash earlier on. The all share and ftse not helpful at all.

DaviStoVest

Smirnoff is a Diageo brand. Stolichnaya is a property of S.P.I. Group, which is owned by Yuri Shefler. He's Russian.

Revs8

Epsilon

No need to be rude.

If you play a game where being wiped out is a realistic probability then the expected average return does not apply. You’ll eventually get zero.

It’s why Joel Greenblatt does not advocate shorting stocks. His analysis showed he’d get wiped out at certain points and you can’t come back from that.

JohnEustace

I read the sequel : The Power of Geography, Ten Maps That Reveal The Future of Our World, over Christmas. While not as strong a book overall as Prisoners of Geography the chapter on the strategic importance of Ukraine was eerily prescient and well worth the £1.79 on Amazon by itself.

TStubbs

I have Accoya windows and doors and think it’s a great product- it should see me out and looks really good too.

nevilleaustin

After reading some of the comments below and Jack's last comments above it got me thinking about how to cope with the mental strain of holding a portfolio with a significant exposure to Small Caps during periods like we have had since October.

And then it came to me, ie - for those of us who did not go to cash, for a period of just a year or two we could switch our mindset to 'Coffee Can'. Obviously the portfolio should not be geared and must be holding good companies with sound balance sheets.

Maybe this is what to do with the 'Coffee Can' theory, just turn off the screen, and then in six months or a year or two, be brave and come out from behind the sofa and take the lid off the 'Coffee Can' and have a peep inside lol

jamesalastair

The much better way of gaining exposure to leverage in the Gold market, and particularly in an inflationary environment, is to buy the quality Gold Royalty companies. The best two are Franco Nevada and Wheaton ....... both have all the upside exposure and non of the exposure to operating cost inflation. Gold mining requires a lot of water and a lot of fossil fuels.

was that really necessary?

Thanks will take a look at those. On the royalty front there is also the recently listed Trident Royalties (LON:TRR) which has a big exposure to lithium, along with some gold and copper.

Lucky dip

5th Mar '22

legal and general, Aviva and MNG are the three sisters who give generously over any time horizon longer than 6 months.

6th Mar '22

I could be more polite, but that wouldn't change the reality of things. The possibility of ruin is present in all of our porfolios with a probability far higher than we dare mention.

"A share price is nothing more than a probability-weighted average of all possible states of the world. And ruin is always one of those states, with probability varying by company."

Which of us 'knew' a year ago that Boohoo (LON:BOO) would fall by 80%?

More presciently, which of us at the start of 2022 could 'forsee' that Studio Retail (LON:STU) would soon go bust?

Or 'knew' that Evraz (LON:EVR) was about drop 80%.

The presence of unknown unknowns should keep us all humble.

Small Cap Value Report (Fri 4 March 2022) - TENG, AXS, DPEU

Jack's section

Ten Lifestyle (LON:TENG)

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Jack Brumby

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