Small Cap Value Report (Mon 17 Jan 2022) - MORE, CNIC, HAT, PEBB, PIER, ACC

17th Jan '22 by Paul Scott

66 comments 11034 reads

Good morning, it's Paul & Jack here with the SCVR for Monday. Today's report is now finished.

End of week SCVR podcast

On Friday last week, we trialled a SCVR summary podcast. As it was an unplanned thing, I published the audio file on my personal website here. Jack & I managed to cover 29 companies in 31 minutes, so it's a quick rattle through everything that we looked at during the week in the SCVRs. On the same page, I also typed up a written summary of all those companies which we reported on - mostly trading updates, but a few accounts as well, which you might find useful, colour-coded to show profit warnings & distressed financial situations in red, and out-performing trading updates in green. It's quite good I think, so do take a look.

If people find the podcast & written weekly summary useful, then we'll keep doing more of them. If not, then we'll drop the idea, which is extra work on a Friday afternoon, when I would normally be winding down for the weekend.

Thank you also to the people who kindly left donations towards admin costs on my website. I'll pass those on to ZANE, and will try to change the donate button's function so that it sends any donations direct to ZANE, as I'd prefer any kind donations go to charity, rather than for my admin costs, which are not very much, and I can absorb those myself. EDIT: that's now fixed, the donate button on my website now pays donations direct to ZANE, and I've paid over the money already received to ZANE.

Agenda

Paul's Section:

Hostmore (LON:MORE) (I hold) - a positive end of year trading update ( "well ahead" of mkt exps). This share looks the wrong price to me, much cheaper than listed peers.

Pebble (LON:PEBB) - a positive trading update, but given the premium PER, it needs to be. Profitability has now returned to pre-pandemic level. Quite aggressive accounting, capitalising some costs into intangibles. Doesn't appeal to me.

Brighton Pier (LON:PIER) - a positive-sounding update, but it's only "comfortably in line", so not madly exciting. Forecasts out from Cenkos today make it look attractively valued. Could be worth a closer look.

Access Intelligence (LON:ACC) - profit warning, shares down…

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Rambo

17th Jan '22

Excellent weekly summary of the SCVR, so good work by yourself and Jack. Your website is also a very useful source of information for the PI so would definitely recommend readers to have a visit if they have not done so already..... both yourself and Jack's input to the SCVR much appreciated.

davidjhill

Nice update from Petrotal (LON:PTAL) which is starting to look a bit ludicrously cheap in my view.

Todays key takeaway for me was that they are doing 20,000 bopd of production and are finalising deal to extend Brazil export capability to 13,000 pobd. That massively mitigates reliance on the PetroPeru pipeline, which we have seen can be disrupted for political purposes by local communities even though they have very good relations with Petrotal (LON:PTAL) itself.

Petrotal (LON:PTAL) appear to have a good relationship in government as well so political risk appears to be well mitigated in general.

Couple that with an $85 oil price and looks to me like you will be able to buy Petrotal (LON:PTAL) at a negative EV within the next year.

Logical David

Looking at Petrotal (LON:PTAL) it has some attractive metrics but unfortunately I don't have any spare cash at the moment. One to watch.

Revs8

Hi Paul,

I found the colour coded summary very useful to quickly check if I missed anything during the week.

Zipmanpeter

Paul, For me the weekly, colour coded written summary is brilliant and will be fast to refer to in 3 months time. I suspect the video will take much more time for you and me!

But either is another brilliant service to us here on SCVR/Stockopedia - just don't burn yourself out. I need to read and enjoy your entertaining and informative blog every work day!

Boon

It amazes me that after so many years of trying, the BOD for Dp Poland (LON:DPP) can't get something as tried and tested, straightforward as rolling out a franchise network and at least squeaking out some profits. They should all be banned from taking any future directorships.

What was the accepted outcome of Patisserie Valerie? That Luke Johnson was involved or knew and therefore culpable? Or was he in the dark, fooled and duped?

Harry Hindsight

Distil - small/illiquid - lol

WAG Payment Solutions - maybe footballer are looking to improve their financial liabilities

CentralNic - is that a govt thing

Hostmore - sure they would like to

Sorry thought Russia invading Ukraine was smoke and mirrors - Ferrexpo (LON:FXPO) - but who said invest when there is blood on the street - a bit too pertinent even for me

Volex (LON:VLX) looked like some electrons working today but nope, the fuse burst again.

sharw

GarryC don't understand your fuse burst again comment re Volex (LON:VLX) - intraday looks OK to me:

Sorry I'm not a day-trader but do look at the daily/hourly when mine are in trouble - and have the time for screen watching.

The trend is your friend.

Trying to find a base support to top up but todays 'doji' is not that day. I will want a strong move up above 350 and then think about it. Not a 'system' (sorry Roland) can't help myself - too much - er - fun.

The big Question is why has this been marked down so badly. I don't have the time for DYOR so use Stock for that. It seems more than a 'tree shake' - weak hands are long gone, leaving us 'believers'. But maybe the days of PER are upon us.

Sorry the above a daily chart my bad. Weekly chart. This cannot be normal otherwise will sell up tomorrow and do something else - maybe repair my roof. MACD close to a weak base so the risker among us - back up the truck - lets go. Not quite yet IMO. Volume not high so there is something going on.

ISAallowance

Surely the big issue isn't likely to be the fine, but any remediation payments required to customers or ex-customers.

Joe Turner

Agree. I'm a holder & very hopeful for a good year but I was a bit surprised when you said that they've got good relations with the local community as there were 3 locals shot dead during protests outside their facility last summer ! There's alot of location risk but dirt cheap on fundamentals.

I've just had a look through the trading update from H & T (LON:HAT) , but am very puzzled. I seem to come to the conclusion while "trading" and therefore revenues have improved in H2 vs H1, it seems like PBT has stood still.

H1 did £4.7m PBT, and H2 looks like.... £4.3m to £5.3m, with midpoint of £4.75m. Seems disappointing? Then I realised nowhere in the trading update was there mention of margins, except for "retail sales".

So could one conclude that they have been busier in H2, but making less margin. In which case, are the broker forecasts for a jump from 19.5p EPS to 33p EPS from FY21 to FY22 sensible? After all, H2 did £4.75m PBT (and c12p EPS), and H2 is meant to be the seasonally stronger half of the year too, for earnings.

I note that Shore Capital has not updated FY22 EPS forecast, waiting to do so in March. But they did re-state, as did the CEO in his statement, that they are cautious about inflationary pressures. Maybe a veiled caveat/asterisk to what will be disappointing margin numbers published at the time of FY results, and a FY22 EPS downgrade from 33p to circa 20-25p?

luckym

I believe there is a Serious Fraud Office investigation taking place wrt Patisserie Valerie. i do not know the detail of Luke Johnson's involvement but as he was a major shareholder I doubt he knew what was going on.

KevinS1

Jack - thank you for your great and extensive write-up on Centralnic (LON:CNIC) which was extremely informative - especially following your chat with the CEO.

I can see this share having a lot further to go, if it continues to deliver and can avoid issuing more shares. I do hold and will be keeping a close eye to time a potential top-up.

All the best. K

drainbolt

The experimental weekly summary is an excellent idea, and it would be great if you are able to continue it without pushing yourselves too hard. All your hard work and incisive comments are greatly appreciated by me and I am sure by most other readers. Just one small request: Like many others suffering colour blindness I have great difficulty distinguishing greens from reds so it would be very helpful if you could, say, switch from the green to, say a blue at the start of each company summary to highlight its performance..

BnB

18th Jan '22

Centralnic (LON:CNIC) has done very well but I would not anticipate much more in the way of multiple expansion from here if US valuations are a guide. Godaddy, which has much better cash generation and margins, is on the same p/fc. Meanwhile US adtech (TTD aside) is on very cheap multiples relative to the growth rates - just like CentralNic!

I’d look at is as a successful roll-up with room to run rather than offering intrinsic value - though I agree it can run further with good M&A.

john2

As far as Volex (LON:VLX) are concerned, I think that a number of basically sound shares have taken unjustifiably large falls recently. Today Sanderson Design (LON:SDG) rose 22% on a good but hardly outstanding trading statement after a long period of falling on no news. I am hoping that Volex (LON:VLX) will follow the same path.

Raleigh4343

9th Feb '22

Happy with my Fulham Shore FUL shares. Nothing happening for now. I expect people going out more will happen despite the cost of living crisis. In fact, people might well choose a better value meal out like Franco Manca or Fat Greek. Hopefully, new openings will happen soon to coincide with the announcement of the end of all Covid rules after the school holidays as he announced today.

Small Cap Value Report (Mon 17 Jan 2022) - MORE, CNIC, HAT, PEBB, PIER, ACC

End of week SCVR podcast

Agenda

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Paul Scott

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