Small Cap Value Report (Mon 14 June 2021) - TED, ESKN, SAGA

14th Jun '21 by Jack Brumby

49 comments 9994 reads

Good morning, it's Jack here with the placeholder for the first of this week's SCVRs.

If you have any suggestions or requests on what to cover just leave a comment and explain a little as to why you think the stock might be of interest to the community.

Agenda:

Ted Baker (LON:TED) - final results - the shares have rerated but trading is mixed and there is still a lot of execution risk here.

Esken (LON:ESKN) - Ettyl transactions for Stobart Air (SA) and Carlisle Airport fall through. SA to cease trading but residual obligations remain. Possible strategic funding could change the situation but this remains high risk. More detail is expected from the company later this month.

Saga (LON:SAGA) - Holding statement. Travel cash burn at lower end of guidance, insurance is ok (and benefitting from lower loss ratios), financial position is stable, ships remain ready to capitalise on pent-up demand once restrictions lift. 'Outstanding' customer loyalty so far.

Quick note - we said last week we would create a disclaimer for these posts. For now, just a friendly reminder that we don’t recommend any stocks. We aim to cover notable trading updates of the day and offer our opinions on them as possible candidates for further research if they pique your interest. We tend to stick to companies that have news out on the day.

A central assumption is that readers then DYOR (do your own research) and discuss in the comments below. The comments, incidentally, add just as much value as the blog post itself!

Ted Baker (LON:TED)

Share price: 165.6p (-0.48%)

Shares in issue: 184,608,786

Market cap: £305.7m

Ted Baker (LON:TED) is one of the more dramatic turnaround situations on the market right now.

A flurry of bad news marked a calamitous fall in the share price, with a deeply discounted share placing at the nadir locking in the value destruction and equity dilution for shareholders at the time.

The share price fell by nearly three quarters in 2019 alone.

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You can also see though that the price does appear to have been firming up recently, with the buyers beginning to outweigh sellers. Turnarounds can languish for a long time, but when they do turn, the rerating can be substantial.

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Rusty2

14th Jun '21

Well it is usual that only stocks with news today are reported on. Good luck if you are investing in STM (LON:STM) but it is too uncertain and illiquid for me.

Jonathan Upite

ok yes I missunderstood what the ideas was asking for i thought in general.

MiserableJacktPotato

Sutherland? As in Co-Op bank fail and Superdry fail? I'll pass.

grumpy5

That's the one (and Kingfisher (LON:KGF) too) . You buy Saga (LON:SAGA) in spite of him, not because of him. Roger de Haan is much more crucial.

I think you are right, plus to avoid a disorderly market in the first few days of trading as a lot of PIs dump their small holdings.

Rambo

Excellent overview dconnor85, appreciated - I also hold Open Orphan(LON:ORPH)

Jack Brumby

I've had a look Berksbee. As a neutral, I feel it's better to hold off until the more detailed preliminary results are announced later this month. A lot hinges on this potential strategic investment, IMO. Could come good but there's no way to know right now. High risk!

greensiax

Sorry for the absence, but school holidays have 'distracted' me for the last couple of weeks.

Here are my SCVR heat maps for today (prices as at ~10:40am).

I share these heatmaps with the intention of giving a visual indication of what is going on in the SCVR world: who’s reporting (and it's impact on the share price); and what’s moving more than 'normal'. There are no associated recommendations, implied or otherwise, just information. How, or indeed if, you choose to use that information is up to you. Please feel free to ignore them if you don't find them useful.

Please read my heat map thread for a great deal of explanation of how the heat maps are formed and how I use them to guide me with my research, and for a full key to the contents.

I very much welcome feedback so if you do have any feedback, not already covered in the heat map thread, it would be very helpful if you could post your comment in the heat map thread rather than the SCVR thread. The more specific and constructive the feed back is, the more that likely it is that I will be able to act upon it. Thank you all for the feedback so far.

Small / Micro Caps reporting today:

Big movers today in the SCVR world (moving more than a 20d EMA of the ATR against either yesterdays close, or today's open):

Warm regards, stay safe, and best of luck!

Indie

Thanks, mighunter, v interesting indeed.

(Cambridge Cognition Holdings (LON:COG) study "High frequency assessment of mood and cognition in major depressive disorder using the Apple Watch)

CamRaid

IGotPoesJacket - I think the case for investment is quite compelling even with ES.

dconnor85 - thank you so much for taking the time to share that. I really appreciate it.

I love this forum.

Berksbee

Jack, a quick note to say thanks for your work on LON:ESKN - excellent and merits much more than just a thumbs up.

23jez

Mind Gym

Absolutly excellent and mind boggling presentation. Putting this on my "seriously consider buying list". The following points come immediately to mind.

It is likely to be of interest to senior levels of many organisations both public and private.
If I were still working for one of these organisations and not yet at a very senior level would I survive, as I am the Emperor has no clothes sort of person
Following on from 2 . How easy would it be to game the syatem if at all?

mort1980

Hi Jack,

Would be great and extremely helpful if you could review Saga (LON:SAGA) based on their update today, share price etc.

Thanks.

JohnEustace

Thanks dconnor85. I imagine that the talk at the G7 of accelerating future vaccine development targeting 100 days to implementation can only further boost Open Orphan (LON:ORPH) through further human challenge studies being needed, though at some point I have to think the US and others will have to build out their own capabilities.

simmsc

Esken has just raised £120m via a convertible bond

FREng

Re Cambridge Cognition Holdings (LON:COG) illiquidity. One data point: A J Bell sold 10,000 COG shares for me inside the spread today, (and 2p above the limit price I set). I find AJB are very good at trading limit bids and getting a better price if it's available.

dcon85

CamRaid, novice_investor, Happy to help! As I have benefited from the writings and recommendations from many others on the site.

JohnEustace I hadn't followed the G7 so that is interesting to know. I shall have to read up on that further.

My view is that the impact of covid on the economy and upon many peoples lives has been devastating, and I don’t think anyone wants to see a re-run of what we’ve just been through. Whether the next pandemic is a variant of covid or something entirely new, the framework we develop to deal with these events is going to be critical. I’m hoping world leaders and governments are taking the long view on this – especially if the next one is more contagious/more deadly – and it wouldn’t need to be by much.

And for perspective here’s a breezy write up of the Swine Flu pandemic of 2009 during which time I was travelling across America without a care in the world.

https://www.nhs.uk/conditions/swine-flu/

Britain has been pushing for this since February:

It took 314 days from the first identification of a COVID-19 cluster in China in December to the first successful vaccine trial results.

Britain hailed that as a huge achievement but said next time it must be done faster, backing a 100-day target previously set out by the Coalition for Epidemic Preparedness Innovations.

https://www.reuters.com/world/...

Leading to the Carbis Bay Declaration

gregatr0n

Saga (LON:SAGA) - they announced he was being replaced as Insurance CEO in today's RNS, so it's a start:

"We are delighted to announce the appointment of Steve Kingshott as Insurance CEO, who will be joining the business from Tesco in the Autumn. Steve has a strong track record of strategic delivery, having spent more than 30 years in a variety of senior roles within the insurance sector. Euan Sutherland will remain as Interim CEO of Insurance until his arrival."

Small Cap Value Report (Mon 14 June 2021) - TED, ESKN, SAGA

Ted Baker (LON:TED)

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Jack Brumby

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