Good morning! It's been such a busy week, that I think today is likely to be taken at a leisurely pace.
This week's small caps podcast is here.
Agenda -
Graham's Section:
Zoo Digital (LON:ZOO) (£99m) - Excellent results from this media services company that provides services such as subtitles and localisation streaming platforms. The outlook looks positive, too, and it’s hard to imagine that it won’t hit its $100m revenue target before long. The growth in sales has finally enabled it to earn a meaningful operating profit, despite heaving spending on growth such as the leasing of a new office and international acquisitions. In a bull market for growth companies, I can imagine that the valuation here would be vastly higher than its current level.
DX (Group) (LON:DX.)(£172m) - This suspended company is still publishing trading updates and its broker continues to publish earnings forecasts. Trading is said to be ahead of expectations, and EPS forecasts are raised accordingly for FY 2022 and FY 2023. The corporate governance problem, whatever it is, has taken up the attention of Board members for a very long time now (an internal investigation started some time before July 2021). But if the costs related to it remain low, and it doesn’t derail the business of the company, then shareholders can still emerge unscathed.
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.
Graham's Section
Zoo Digital (LON:ZOO)
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