Small Cap Value Report (Mon 20 July 2020) - BOWL, VLG, INS, TUNG, OPTI, PTD

20th Jul '20 by Paul Scott

98 comments 11553 reads

Good morning, it's Paul here with the SCVR for Monday.

I hear from CNBC that the average American has put on 16ibs during lockdown. I can quite believe the same might be true here. Certainly, basking in the sun on Friday afternoon, I caught a glimpse of myself reflected in the window, and it reminded me of a documentary about a mudslide that had engulfed a whole village. Time to do some sit-ups, methinks!

There was some weak economic data in the US on Friday, with flash consumer confidence numbers coming in well below expectations, and importantly below June's numbers. That's not consistent with the V-shaped recovery that the stock market has priced-in. Combine that with a dearth of guidance from companies, and I remain cautious, and have shorted the US indices again, just as some downside protection. After all, if companies are not putting out guidance, then it doesn't suggest things are going well, does it?

On the upside, news on treatments/vaccines sounds promising, and the wall of money thrown at the markets is artificially propping up everything very well, for now. We'll see what happens with US earnings season this week, as that obviously sets the tone for UK markets too. Netflix results were interesting last week, as the stock dropped sharply - not on the numbers, but on soft expectations for Q3 and beyond. Are things priced to perfection? Some seem to be.

Whereas UK small caps generally seem quite cheap still. No sign of any euphoric bulls over here.

On to today's RNS. Not much news today in the samll caps world, so estimated timings - should be complete well before 1pm official finish time.
Update at 13:45 - today's report is now finished.

Hollywood Bowl (LON:BOWL)

Share price: 158p
No. shares: 157.5m
Market cap: £248.9m

Centre re-opening date

Hollywood Bowl Group plc ("Hollywood Bowl" or the "Group"), the UK's market leading ten-pin bowling operator, announces that following the Government's announcement on 17 July 2020, it will reopen all of its English centres on 1 August 2020.

Pre-booking has started already, as you can see from its website here.

COVID-secure operating measures are being put in place. It will be interesting to see how this pans out. A number of members here left negative comments about the idea of going bowling, pointing out that putting your…

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chrismorris44

20th Jul '20

Where on Twitter was all the noise?

Michael Tee

Hello Abtan.

The agreement with the Chinese client is for collection from VLG factory in Italy. From the point that the products leave the factory VLG are no longer responsible - no transporting, freighting distributing or selling. Additionally the contract is for payment on collection from factory also (I do like this) Normal transit times are 6 weeks but 10 weeks at present due to C19 so VLG have slightly softened their payment terms until Q4 when it is hoped transit time will have normalised. Further details in my write-up.

Michael

GrahamF

Re MTI Wireless Edge (LON:MWE)

Stocko’s news is listing this announcement as a RCS rather than an RNS. My understanding of that is the news is not significant enough for a RNS. So, general comment from the company rather than something expected to materially change their financial situation.

Perhaps I have misunderstood what these RCS announcements are, but had the impression that we should read too much into them.

Silver Moon

Bournemouth in the News this afternoon, had Paul been creeping round the back of the beach huts his contribution to the Fire Service would have been welcome, might even have put the fire out before it arrived!

Smile please Paul,

smegster

I use investigate to pick up RNS's. I always click on the the "category" section, then choose the "Results and trading reports' - so that this only pulls up annual results and trading updates rather than all the other fluff

MichaelFBS

Thx doublelutz. The idea that C19 will be around forever is a nonsense (sorry to be categoric Paul). It make take years (2 to 3?) or it might be over sooner but it will certainly not be around forever. Further I see no particularly punitive measures.

As Housemartin2 says people are not very good at assessing risk and also think linearly. That which is happening now will continue ad nauseam in to the future (direction of £TSLA share perhaps.

Don't get me wrong what we are going through is horrific (for some more than others) and I am sure people will agree that when I say I cannot wait for it to be over. But remember "This too will pass".

Sorry rant over.

Kind regards

andyfwwrench

Optibiotix Health (LON:OPTI) though a general and not specific comment, and very much my opinion. Far too much store is put on what CEOs have to say and not enough on objective analysis. A spokesperson for any company will rightly put the strongest spin on what the company does; that is what they are paid to do. It is up to the individual investor to investigate bull or bear propositions and see if they hold water. If they don't congratulations, you may have an edge. If an investor just laps up the words of a smooth talking CEO then one day they will run headlong in to a Wirecard, Globo, Theranos, etc etc.

Stockopedia endeavours to present objective information, the last thing it needs to do is to allow company reps to pollute that.

Not wishing to be long and wanting to be short are completely different positions. Shorting is easy to get wrong, and works best when there is a definitive catalyst like an upcoming debt repayment that can't be made. There are literally thousands of listed equities and not only is there absolutely no need to have a buy / sell view on all of them, it would simply be impossible. A good filter to reduce the opportunity set is to look at companies that never actually do what they say they are going to do. Specifically with respect to this expression, the perennial exhortation that either revenues or profits will take off in the next period, and they never do. They can simply and safely be ignored with no money lost or gained.

Lord Gnome

Several things in my view. Firstly TXP is going places and TRIN isn't - yet. Secondly TXP has several other monster prospects and a big drilling/ development programme. Thirdly it has huge near term cash flow with the gas from Cascadura being sold to a buyer so keen (The Trinidad gas co) that they are paying for the pipe to connect the new supply to their system. We await news of the price to be paid. Finally, for now, the Cascadura development is gas not oil, so no SPT to be paid.

Having said all that, TRIN is also on my watch list. As you point ut, the value on offer is compelling and sooner or later it will be recognised.

Otemple3

I am baffled at the difference in EV between the two. Trinity Exploration And Production (LON:TRIN) is less exciting having made its big discovery a few years back and is just diligently driving down costs and further building up the significant cash balance.

I think the market view of them is starting to shift and expect a step change in valuation later this year when hopefully we will get the FID for TGAL / Echo plus potentially an asset acquisition (every rns gets more bullish on this so hopefully something soon).

PJBY

''Pollute''? Surely we all want correct facts? Precedence has been set imo by previous Paul Scott articles, and an unhealthy relationship between Stockopedia and sharesoc. . However. I do accept my summary of OPTI make be clouded as a shareholder, as you point out.

Watch the video above.

Albertos

Hope you didn't short the NASDAQ Paul.

Either I or the US markets have totally lost the plot - not even sure I'd back myself at the moment.

We certainly do live in interesting times.

ambrosia

no thats terrible news!!

barnetpeter

Tesla soared over 142 dollars tonight.

The sort of people who when they say it might be a good time to take a profit on a stock a discount placing turns up the next day....or in one recent case that very same night via primary bid. Of course its all luck / in the charts. You have to find them yourself I am afraid.

abtan

21st Jul '20

Venture Life (LON:VLG)

Hi Michael

That's quite some arrangement Venture Life (LON:VLG) has signed up to.

I can only assume therefore that the Chinese company must be receiving a serious discount to take on the hassle of shipping/customs/etc.....

Out of curiosity do you know if there are clawbacks or penalties if they don't actually order up to €168m over the next 15 years?

It will certainly be interesting to see how margins are affected going forward.

Cheers

23rd Jul '20

OPTI-some interesting articles below, for some balance and discussion, including a detailed contrast to Pauls review, one also being promoted via Shareprohets.

OptiBiotix Health plc (AIM: OPTI), a life sciences business developing compounds to tackle obesity, high cholesterol, diabetes and skin care announces it has extended the terms of its original manufacturing, supply and profit-sharing agreement with Agropur MSI, LLC (Agropur) as announced on 24 June 2019.....

https://lemminginvestors.blogspot.com/2020/07/optibiotix-health-wellbiome.html

On Monday 20th July Paul Scott put out another poorly researched hatchet job on OptiBiotix Health Plc (OPTI) and again today in what is nothing more than a rant at the company CEO. Stephen O'Hara - his crime? Having the brass neck to seek to assist Paul Scott in his understanding of the company and address non-factual errors by Paul Scott.

https://lemminginvestors.blogspot.com/2020/07/optibiotix-health-paul-scott-being-bitch.html

simoan

25th Jul '20

Interesting name for a blog - Lemming Investor. Who wants to be one of those?

If the CEO did contact Paul directly, rather than a PR minion, or some such, it's a huge red flag for me. Get your head down and get on with your job mate!! Prove Paul wrong the best way possible by growing revenues and generating profit and positive cashflow.

If I'd held this company (which I have absolutely no interest in based on the fact it is a small healthcare company listed on AIM) I'd have sold on that news alone. Management credibility is a very large factor in my investments. If the CEO can't put his ego to one side then it's uninvestible for me.

All the best, Si

Small Cap Value Report (Mon 20 July 2020) - BOWL, VLG, INS, TUNG, OPTI, PTD

Hollywood Bowl (LON:BOWL)

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Paul Scott

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