Small Cap Value Report (Mon 22 Aug 2022) - CINE, SMV, NGHT
Good morning! Paul & Graham here today.
Last week's podcast roundup is here. It's quite a good one, even if I say so myself :-) These will update automatically, if you put the website URL into your podcast provider. I do them every weekend, usually around lunchtime on Saturdays, summarising the week's SCVRs and other random thoughts about the markets & macro. All a bit gloomy this week.
Agenda -
Paul's Section:
Cineworld (LON:CINE) - Sunday Times ran an article saying it's shortly to file for bankruptcy. The company issues a response today saying that is one option being considered. Shares are almost certainly worth nothing.
Graham's Section:
Smoove (LON:SMV) (£39m) - this owns a website that matches mortgage brokers with solicitors, and a cloud-based platform designed to make the conveyancing process easier. FY March 2022 results are not too great: revenue growth is modest at 13%, and the company burns through £4m of cash. But the cash balance still finished the year at £20m, giving the directors the scope to propose a share buyback while also providing a few years of runway to develop the business. I like this one in theory but there’s no doubt that it’s on the more speculative end of the investing spectrum.
Nightcap (LON:NGHT) (-2.7%) (£28m) [no section below] - this bar group announces the opening of “what will be one of the world's largest Tequila-focussed bars”. Based in Covent Garden, it will be the new flagship site for Barrio Familia, a Latino-themed chain of cocktail bars. Nightcap has 35 sites and 21 possible premises that it is currently working on, and sees “favourable market conditions for site acquisitions”. The company’s net cash position was last reported to be £0.6 million as of 3rd July 2022, and it recently reported a new £10m facility with HSBC. Almost half of that facility is earmarked to be used in development capex. This stock IPO’d as recently as January 2021, at an IPO price of 10p (latest share price: 14.6p). It has raised significant debt and equity finance since then and with a debt-fuelled expansion underway in a sector littered with investment horror shows, I would approach this one with caution.
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.
Paul’s Section:
Cineworld (LON:CINE)
4p (Friday’s closing price)
Market cap £56m
The Sunday Times ran a story saying that Cineworld is considering filing for bankruptcy in the US and possibly elsewhere too, due to its insurmountable debt pile of c.$5bn, and a legal case which it lost (but is appealing against) for about £800m. The legal claim would only rank as an unsecured creditor, so would effectively be wiped out in an insolvency. That, and the need to ditch some uneconomic sites is why insolvency looks almost certain now. Hence the shares are worthless, because equity ranks behind all creditors in law.
The response this morning from CINE repeats its previous statement. It says both “additional liquidity” and restructuring its balance sheet are being considered.
Its cinemas are open for business as usual, and expects “no significant impact on its employees”.
Although the Sunday Times says some sites in the US are likely to be closed.
“Strategic options” being considered include a Chapter 11 filing in the US, and “associated ancillary proceedings in other jurisdictions…”.
As regards shareholders, it says -
As previously announced, any deleveraging transaction would, however, result in very significant dilution of existing equity interests in Cineworld.
That sounds an understatement. Shares usually end up worth nothing in insolvencies, although US law is different to UK.
My opinion - CINE took a long time to implode, but the balance sheet is ridiculously over-geared, so there was a big question mark over these shares even before the pandemic struck.
In the short-term this share price could be volatile, as some shorts may want to close before the share is suspended, to bank their profits. The trouble is, when companies actually go bust, short positions can take an eternity to actually be paid out in full. In the meantime, sometimes CFD/spread bet companies put them on 100% margin, so you end up with a load of capital tied up, sometimes for c.6 months, before they finally get marked to zero and paid out. Hence it does make sense to close a short position before the share is suspended.
As for longs - well there’s really no excuse. What on earth were you thinking?
Graham’s Section:
Smoove (LON:SMV)
Share price: 59.6p (-0.7%)
Market cap: £39m
This was previously known as ULS Technology - not a very inspiring name, so I can’t blame it for changing to “Smoove”!
The name change was announced back in April, and was described as giving the company a “refreshed, refocused and empowering brand”. The company also got a funky new website.
So what does it do? It owns econveyancer.com and digitalmove, tools designed to help the process of moving house go more smoothly (cough).
Let’s take a look at these results for FY March 2022 (it feels late to be publishing these):
- Revenues +13% to £19m
- Gross profit +13% to £7.8m
- Underlying EBITDA loss of £3.8m (last year: £0.4m profit)
- Pre-tax loss £5.4m
One of the few bright spots among the numbers is that the gap between the underlying EBITDA loss and the pre-tax loss isn’t bigger.
The revenue growth might also be considered encouraging. But I prefer to see higher growth (over 20%) from loss-making companies, to help justify the cash burn. At Smoove, the major KPIs grew at rates of between 10% and 20% in FY 2022.
Smoove says that the financial loss reflects “investment in the core eConveyancer business and in new product areas.”
There is a major factor supporting the market cap: cash balance of £20m (as of March 2022), thanks to disposals previously made. So at least Smoove will not need to raise money for some time.
And here are the post-period end highlights (a very important section, since the period ended five months ago!):
- Operational restructuring to align cost base with product development and growth strategy (cost cuts?).
- Launch of Smoove Start, a client onboarding service for estate agents, in pilot phase.
- Tender offer to return up to £5m to shareholders.
- New Chief Financial Officer.
Outlook - the CEO argues that the economic headwinds facing first-time buyers make Smoove’s offering even more important. There’s nothing too concrete in this outlook statement.
My view - I really want to like this company. I agree with it when it says “the home ownership process remains broken and provides huge opportunity for radical change”. And I want it to succeed in its mission of “revolutionising the home ownership market while simplifying processes and reducing the stress and frustration for everyone involved.”
The first-time buyer process, from my perspective, was a trip to the Dark Ages: it involved vast amounts of paper, written signatures, snail mail, and obscure, time-consuming requests for information involving many different people. Everyone was very professional and reasonable, but the process was archaic and not what you’d expect in modern business. I couldn’t help thinking that there should be a better way.
Maybe Smoove’s DigitalMove can help to promote a better way?
The eConveyancer product, meanwhile, has received some industry recognition this year from the Specialist Finance Introducer Awards. They say that 2% of UK conveyancing goes through them - I wonder how big this could get?
Valuation - if we used the year-end cash balance of £20m, that leaves an enterprise value for the business of £19m.
The trailing revenue figure is also £19m, so the business is available to be bought at around 1x sales.
I generally don’t buy shares in loss-making, speculative companies, because most of them don’t work out. But if I had to buy one, this would be on my shortlist.
My reasons for liking it are:
- It’s easy to understand what they are trying to achieve, and the mission makes sense - the house moving process needs to be modernised.
- I like to invest in “portal” businesses (e.g. I own shares in Rightmove (LON:RMV) ) and eConveyancer might have the potential to be a portal with good market share in its niche.
- The cash balance reduces short-term funding risk and supports the valuation, although it won’t last forever if losses continue. The £5m tender offer, if approved, is unlikely to change much.
My reasons for caution are:
- The cash will run out in a few years, unless the current rate of burn can be stopped (£4m was burned in FY 2022, and the cash balance will be less than £15m after the proposed tender offer).
- Gross profit would need to grow by over 60% to reach breakeven, based on the FY 2022 numbers. As I’ve already mentioned, the revenue growth wasn’t at the rate I’d normally want to see from a business at this stage of its development.
These are my initial thoughts. I’ll be eager to read what other people think of this one!
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63 comments
No sympathy for any holders of Cineworld.This is a company who stopped showing a film earlier this year because of a group of islamic extremists protesters.Just prior to Covid they refused to show the latest films from Polanski ironically about Dreyfuss and Woody Allens.In the past Cineworld would have made money from Allen and Polanski films but when me too totalitarians turned the heat up Cineworld showed no will or courage to stand upto them and fight for the Allen and Polanski audience right to decide whether we wanted to see their latest films or not.
Not gloating over anyone losing money in Cineworld. Some seemed to have put life changing amounts into seeing comments on other boards and even though obvious very risky, plus not very good for wider economy firms going bust, less capital and spending power, goverment reaching limits of borrowing to make up. Been there anyway, younger, gung ho and less wiser, almost wiped out after the miilennium tech crash. Time does give everyone a chance to recover.
With the talk of inflation accelerating into next year, and the pound dropping in value (now below 1.18 to the USD), there has to be a scenario in play where the BoE does an emergency rate hike?
We haven't had the US or UK or EU central banks do an emergency rate rise yet, as they try to assure markets that they have everything under control. But surely there must be some panic signs in the BoE at the moment?
When was the last time the BoE did an emergency rate rise? (the last cut was in 2020 when the pandemic started).
Big drop in Boohoo (LON:BOO) today, off the back of this.
Is it possible that Boohoo knew nothing about this before buying up stock?
Revolution Beauty to suspend stock trading on accounting concerns
19 Aug 2022
Aug 19 (Reuters) – Revolution Beauty Group said on Friday trading in its shares will be suspended from Sept. 1 as the beauty products maker does not expect to release its 2022 results by Aug. 31 after auditors flagged accounting issues.
The news comes days after British online fashion retailer Boohoo acquired a nearly 13% stake in Revolution Beauty Group, making it the third-largest shareholder. ... ...
Shares in Revolution Beauty Group plunged 41% to 15.5 pence.
I notice that their last CFO Andrew Clark was replaced in May with the handover period lasting up to July. I wonder if their new CFO Elizabeth Lake was aware of the can of worms when she took over the role. (edit : 24 'directors' listed on their website seems excessive IMO. I do not hold)
cheeky_minnows post is referring to Revolution Beauty (LON:REVB) by the way.
Please try to remember to put the company name or ticker in comments, as some thread/non-threaded views don't necessarily place your comment next to the thing you're commenting on! Ta.
I certainly hope they didn’t know otherwise we can add insider trading to Boohoo (LON:BOO) (I hold) woes. (These things happen; Slater bought a 10% stake in Best Of The Best (LON:BOTB) at £26.)
I first bought Boohoo (LON:BOO) back in Nov 2015, Feb 2016 and April 2016 at 37p, 44p and 48p.
In Feb 2016 it had revenues of £195m and net income of £12.4m. Mkt cap was £466m.
To Feb 2021 it had revenues of £1,745m and net income of £93.4m. To Feb 2022 those figures £1,982m and -£4m.
I am not the best investor (my 10 year record speaks to that) but I am at a loss to see what the market is seeing that I am not and am struggling not to add to what is now my second smallest long term holding.
The decline since its one year high is 82.9%. For ASOS (LON:ASC) that figure is 81.3%. It is almost as though the city boys and girls think that the sale of clothing online is finished and everybody is going to shop at Next (LON:NXT) and Primark.
Stating the obvious I disagree. The value of the apparel market in the U.K. is £55 billion and in the US $370 billion. Worldwide it is $1.5 trillion and IMO most of that will be online within 10 years.
Regards
Michael
I certainly hope they didn’t know otherwise we can add insider trading to Boohoo (LON:BOO) (I hold) woes. (These things happen; Slater bought a 10% stake in Best Of The Best (LON:BOTB) at £26.)
I first bought Boohoo (LON:BOO) back in Nov 2015, Feb 2016 and April 2016 at 37p, 44p and 48p.
In Feb 2016 it had revenues of £195m and net income of £12.4m. Mkt cap was £466m.
To Feb 2021 it had revenues of £1,745m and net income of £93.4m. To Feb 2022 those figures were £1,982m and -£4m.
I am not the best investor (my 10 year record speaks to that) but I am at a loss to see what the market is seeing that I am not and am struggling not to add to what is now my second smallest long term holding holding.
The decline since its one year high is 82.9%. For ASOS (LON:ASC) that figure is 81.3%. It is almost though the city boys and girls think that the sale of clothing online is finished and everybody is going to shop at Next (LON:NXT) and Primark.
Stating the obvious I disagree.
The U.K. apparel market is £55 billion, the US $350 billion and worldwide $1.5 trillion and I’d wager that most of that will be online within 10 years.
Regards
Michael
I must have asked about this same issue 3-4 times last week. These transactions from Boohoo make no sense.
Still no answer or even a valid opinion that will help everyone here. I thought that this was the purpose this forum was created.
Well what do you expect, if you post messages like that!!
I think this has been misinterpreted by the media. Revolution Beauty (LON:REVB) had already stated that it was having problems with the audit, and what the specific issues were. Its latest statement said that the shares would be suspended (NB temporarily) if results could not be published by 31 August, which is the 6-month deadline for shares to remain trading.
So another delay would cause temporary suspension of REVB shares, but they should then resume trading once the accounts are published.
Some media reports (not the one above) seem to have missed the fact that the likely suspension of REVB shares would be due to this technical reason, over timing of the results publication. It's not due to solvency issues (as far as we know).
BOO bought its stake in REVB in full knowledge of the accounting/audit issues, because they had been publicly disclosed.
There's a good fit between REVB products & customers (targeting young females mainly), and the BOO group (I hold) whose biggest brands also target that same demographic. So I can see why BOO would take an interest in REVB, to have closer supply ties. Also possibly to get a seat at the table in any refinancing, sale, or breakup of REVB possibly?
The amount invested was not material to BOO anyway. They're known for being particularly shrewd, so BOO will have thought this through, and will be getting a bargain I think. Otherwise they wouldn't have done it.
Take the Debenhams deal as another example. BOO only paid £55m for it, but what they had spotted, is as well as the opportunity to re-launch DEB as online-only, there was also a lucrative licensing revenue stream from the Middle East, where large DEB stores are operated under licence in countries like Saudi Arabia. This also opened up a big new wholesale channel for all BOO's other brands, to be supplied into the M.East. So it was a cracking deal.
Regards, Paul.
thx Paul for this comment (and for following me on Twitter!).
It strikes me that Boohoo (LON:BOO) management are simply ignoring the noise around the share price and just getting on with running the company and executing on a plan to spread their net far and wide and that eventually the weighing machine that is the market will cause the share price to rise.
Yes there horrendous headwinds ahead for a company like Boohoo (LON:BOO) (or any company?) but the lowest point I had when running my own company was 2008-2010 (when it was probably worth next to nothing) but we just carried running the business and executing our plan and sold the business 8 years later for a tidy though not life changing sum.
I just hope they don’t take it private or some larger company (Inditex?) doesn’t snap them up.
regards
Michael
I think a FTSE short at +7500 is a fair FTSE small cap hedge. Even with a five percent stop loss its not been anywhere near there since May 2018.
Not sure Oil, Gas and Resources can keep propping up the FTSE 100 for ever. 7600 would be a better opening, but I have opened a small short position for now, and can add to it.
Maybe eating my words in a week or two :-0
Paul Scott, yet again really enjoyed you podcast, as my wife said, its like listening to a friend, very easy listening, balanced, calm and relaxed. TY!
In the context of Cineworld (LON:CINE) Stockopedia has the stock with a value ranking of 90, which I think it is safe to say (correct me if I am wrong) is a nonsense. I would think that there is a 90%+ probability that the equity is worth nothing and therefore the value rank should be 0. Should the algo not be tweaked to avoid these sorts of anomalies? It (the algo) can pick up that it is a “value trap” but still assign it a value rank of 90.
Not, though it might sound it, a criticism of Stockranks per se, more of a suggestion. I have submitted via the support button but was interested in what others might think.
Regards
Michael
MichaelFBS,
I could not agree more - I was literally having the same thought earlier but you beat me to it! What appears cheap can still become cheaper...as the old adage goes.
The algos need to somehow be better in deciphering a high value stock because it really is undervalued and could be a potentially lucrative investment vs. garbage that has cheap looking metrics because the share price is on a downward trajectory. Seeing a 'sea of green' on the value metrics can be misleading.
Oliver replied very quickly:
“The ValueRank is only a measure of cheapness and as such it wouldn't reflect he risk of bankruptcy. It just signals if the stock is cheap based of historic valuation measures.
Solvency risk is more handled within the QualityRank (which includes Altman and Beneish). With the rather low score here, this looks like it is fairly well reflected.
Of course with any quant system there will be qualitative elements that it cannot pick up, which is where the DYOR element is so important and value adding.”
Obviously there are many ways to skin a cat but on the basis that, in the words of Charlie Munger, “all investing is value investing” let us assume that what our experience and intuition tells us and that on 22nd August Cineworld (LON:CINE) is worth £0, then I do think that the predicative nature of the Stockranks should be able to reflect that. It is not a value stock, it is garbage. Just my opinion of course!
Though to be fair to Stocko having just run a quick screen there is only one other company UniVision Engineering (LON:UVEL) with a Value Rank of more than 90 and the other two ranks less than 11.
In some ways, not too surprising.
In the same way as we never really thought through "what do you do when RPI is negative" back in 07-08 as no one near me had ever thought that possible,
"what do you do when RPI > 10%" is probably not well understood by most people under 70 (I am not over 70) and some unconscious assumptions of low ( real and nominal) interest rates are possibly baked in the stocko algos.
The question is - is this the new normal (and so need stocko V2) - personally I think it is too soon to tell.
In the larger sense, relying on any one opinion or indicator is not a good idea. Ed Croft has warned that there will be times when the SR does not work and there are times when Paul is wrong.
But there are many many more times when I am wrong if left to myself :)
They’ve got Joules at 90 as well.
Revolution Beauty is at 73. It shouldn’t be even at 3!
Very reliable service probably updated once a year (if at all).
In my view, you're looking at this the wrong way, or at least in a far, far too narrow way. The Stock Report tells you all the information you're requesting.
The 'value' is correct in the strict sense, i.e. (and I'm very much paraphrasing the detailed info. behind the value rank here) a very low share price to the earnings, a very low share price to value of its assets, a very low share price to sales etc.. These are all correct and not a nonsense.
But all you need to do to see that it's not a good value investment is to look at the quality rank, the momentum rank, the mkt cap, the EV, the bankruptcy risk indicator, the debt levels etc. etc.. All of this information is there in the Stock Report, you don't even need to click through any links. It also tells you that it's a value trap.
It's always been the case that value in itself was no indicator of a good value investment in any specific share, hence why Piotroski came up with the F-score. He only wanted to buy a basket of high 'value' stocks which also had decent enough solvency and quality profiles.
Best of luck.
Chris
Mkt cap of 55mn v EV of 7.56bn is all you need to see there....
For Cineworld (LON:CINE) , the "Quality" rank (currently 9) should be considered as it includes:
- Long Term Average Return on Capital Employed
- Long Term Gross Profits to Assets - (made famous by Robert Novy-Marx)
- Long Term Average Free Cashflow to Assets Ratio
- Long Term Operating Margin Stability
- Long Term Sales Growth Consistency
- Piotroski F-Score
- Altman Z-Score, a bankruptcy meter
- Beneish M-Score, an earning manipulation flag
- Current Leverage (Net debt to assets)
It's clear from this score that Cineworld is a very poor quality company.
The "Value" score includes:
- Price to Book Value
- Price to Earnings
- Price to Free Cash Flow
- Dividend Yield %
- Price to Sales
- Earnings Yield %
Was about to say this. Anyone who invests purely on the Value score should deserve to lose their shirt. You need to balance out a decision against Quality, or Momentum.
That's why the secondary Stockrank filters have QV, QM, VM as other worthwhile combinations to look at.
In Cineworld (LON:CINE) case, the Quality score is a horrendous looking number, and is accurately saying they are prone to financial trouble.
TBH that was not what I was suggesting. My point was that to me a high value rank implies to me that the stock is a value stock. Not that one should buy a stock with no research because it has x rank.
I think you were very clear Michael.
Personally I did understand your point.
Thank you yiammos1. Sometimes I think I am going mad.
Inflation to peak at more than 18 per cent, reckon Citi forecasters:
https://www.cityam.com/citi-uk-to-suffer-18-6-per-cent-inflation-peak-near-50-year-high/
"As for longs - well there’s really no excuse. What on earth were you thinking?"
In older times, I would have asked Paul if he has a list of companies like this - but just as he cannot recommend stocks, I assume he cannot publish a bargepole-list either
So, the question is what screens do people use?
I am a big fan of the Piotrowski F - Score - for me must be 6 or more to buy, and 4 or less counts towards selling. Following that rule has saved me from expensive mistakes on the buy side and not following the rule on the sell side has cost me.
I am looking for something a bit more sensitive - like if short term interest rates hit 13% and profit drops by 50%., can the company cover the interest costs.
andrewdb, I have been looking at companies with decent margins, particularly if they have variable input costs.
But I guess margins coupled with pricing power, also low or no debt, maybe a cash pile, and a decent/low P/E are all tail winds against a substantial head wind in the coming months.
These companies do exist but are few and far between. I do find Stocko share screen can allow you to rule companies out pretty quickly.
I use Earnings upgrade, Jim Slater, SIF and Naked trader, but many come up when I look through the RNS's in a morning. TBH i maybe find 1 investable share a week ATM, onto a shortlist.
TBF am down 5.2% this year, so its by no means a golden goose screening process :-)
Hi Paul,
Thanks for the podcast - very helpful.
You mentioned Aeorema Communications (LON:AEO) and not fully understanding what they do from their website. If you go to the website of their main subsidiary (Cheerful Twentyfirst) there are quite a few case studies there that may be helpful:
https://cheerfultwentyfirst.co...
Some pretty impressive case studies I think.
The other division (Eventful) is an events company - they primarily do events for companies and incentive trips (i.e. taking top sales people away for a holiday etc.): https://www.eventful.co.uk/
Thanks
duplicate - deleted
Supreme (LON:SUP) is down about 12% today. No idea why as cannot see anything in news outlets . Anyone know ?
Also enjoyed your podcast Paul. Many thanks for going to the trouble.
Dock strikes hitting importers. Knee jerk reaction. See also Shoe Zone (LON:SHOE) (I hold).
Dock strikes hitting importers. Knee jerk reaction. See also Shoe Zone (LON:SHOE) (I hold).
Enjoyed your podcast Paul. Thankyou.
Super weekend podcast, Paul. I was interested to hear your on going concerns around energy price increases and the impact on business.
I have a more positive view on future energy costs. With Liz Truss odds on to be next PM and Kwasi Kwartang her potential choice for Chancellor I think Government action on energy cost will be high on the agenda. I think the Bloomberg article below describes the potential removal or restructuring of the 'marginal cost of production' method for setting electricity prices. This would reduce the impact of surging gas prices on the price of electricity in the UK for both businesses and consumers. Not a panacea but certainly a big help.
https://www.bloomberg.com/news...
Hi
For anyone looking for strong dividends plus stocks with a reasonable share price growth, then a couple of RNS's today might catch your attention.
Nothing spectacular, but what I think are useful portfolio holdings as the offer:
Growth, quite low volatility, large and growing dividends (paid quarterly), global and national political tailwinds, inflation linked revenues for parts of their revenues, government subsidies (for parts of their revenues), additional revenues from trading in energy markets, green credentials to attract ESG investors and institutions, growth from innovation in the technologies they operate (innovations will improve efficiencies, effectiveness and thus profitability), buy and build expansions in the UK and non-UK regions.
First RNS was from NextEnergy Solar Fund (LON:NESF) the RNS is here
https://www.investegate.co.uk/...
Second RNS is from Bluefield Solar Income Fund (LON:BSIF) the RNS is here
https://www.investegate.co.uk/...
As you will see they are both Investment Trusts investing in solar farms. Usefully, they are now also co-locating battery storage alongside the solar farms to capture and help with trading the solar energy.
Below the YTD share price of NextEnergy Solar Fund (LON:NESF) and Bluefield Solar Income Fund (LON:BSIF) I have also added in NextEnergy Solar Fund (LON:NESF) and Gresham House Energy Storage Fund (LON:GRID) two other examples.
In addition to these share rice rises, if you are interested look at the sizes of the dividends (range from 4% to 6% approx).
Disclosure I hold NextEnergy Solar Fund (LON:NESF) Foresight Solar Fund (LON:FSFL) £GRID but not Bluefield Solar Income Fund (LON:BSIF) . I also hold JLEN Environmental Assets (LON:JLEN) which is similar but stretches beyond solar into wind and Biofuel sourced energy. I also hold Greencoat UK Wind (LON:UKW) which is an IT focused on wind farms (but going into solar now). For further diversification I also hold Drax (LON:DRX)
Clearly these might not interest many - SCVR holders do not necessarily favour ITs, nor favour energy stocks (which I avoided) - but after digging into this sector quite extensively I came to a conclusion that in these volatile times there seemed quite a bit to commend this 'green energy' sector.
I thought on this slow news day some might like to take a look.
Regards
Howard
Hi
For anyone interested to look deeper at £NESF they have a 40min vid for their March 31st 2022 results on the 'Investor Meet Company' YouTube channel. Broadcast 30th June.
This is an informative presentation and offers an insight into the wider Solar Energy market place through the lens of this fund.
Trying to link directly to the vid itself seems not to work in these comment sections of the SCVR, so here is the link to the YouTube channel. Simply use their search to locate the NextEnergy Solar Fund (LON:NESF) vid.
https://www.youtube.com/c/Inve...
Regards
Howard
I hold all these trusts too they have been excellent return in last year .I wish stockopedia could give more comments on IT .I am slightly worried renewable energy funds being hit by windfall tax.
A good place to start if interested in these themes, is the Renewable Energy Infrastructure sector on the AIC. https://www.theaic.co.uk/aic/s...
Graham -
Thanks for your report on Smoove (LON:SMV)
I looked at this before as Kestrel, who are fairly shrewd, hold 29.5% with a seat on the board. They last commented a while ago here:
https://kestrelpartners.com/ul...
One thing that puts me off is a lack of forecasts. There is one shown (for these results) on Stocko that has not been changed since 2020. I have had a go about this before but if forecasts are withdrawn or suspended it would appear that Refinitiv do not tell Stocko so they just stay there.
Another thing putting me off is that they do not appear to want to engage with PIs. The presentation this morning was for analysts - no IMC or PIWorld or similar.
Back in December Jack concluded "On balance, I think there could be an interesting story at ULS. But I’d want to do more research before taking any position". https://www.stockopedia.com/co...
Well, yes, I would like to do some more research but with no forecasts and no chance to ask the directors when they expect to reach breakeven where do I start? There are more fish in the sea that are easier to look into.
Hi Graham / Sharw,
Good report here, important to note all the other services this company will be monetizing to capture end-end home mover market, i.e. not much details in the accounts on Smoove Start / Smoove Complete / Smoove Home. Their presentation slides provide a better overview. Hopefully link below works.
https://hellosmoove.com/media/...
Regarding PI engagement and forecasts the slides highlights:
AGM in September
• Capital Markets Day Oct/Nov
• Demos
• Strategy update
• Commence forecast guidance
Thanks very much for the additional insights into SMV, sharw.
Yes, I noticed that the Stocko results weren't current, and I couldn't find any current broker notes on the company. They don't seem terribly interested in PIs, I agree. Maybe that's not such a bad thing - might help to keep the valuation grounded!
Graham
Hi Paul. Really enjoy the SCVR podcast. Used it to dull the monotony of cutting hedges today! A far cry from listening on the beach last week.
As I said last week. I don’t agree with the idea of the government trying to skew the energy market. I don’t believe handing out money to everyone is going to combat inflation or save failing businesses in the long run.
Many unviable business would have failed months or years ago but Covid handouts kept them all open. I remember reading an article at the time that said we were just sitting up trouble for the future and it looks to have been pretty accurate.
Sorry to be so negative but like you I’ve gone short on the US indexes and the DAX. I’m still hopeful that the FTSE100 might do better that other world indices.
The high energy costs have to be tacked at source, waste of time to hand out money except to the very needy, as it is just a sticking plaster that does not treat the underlying disease.
Morning all,
After a positive July for small caps, I see August has reverted back to type. Most of my holdings drifting back down, certainly no end to the bear market in sight yet!
Hopefully September will be better for your portfolio. Luckily bought some energy stocks last year due to inflation worries and mostly moved out of growth ones for now.
Hi Paul - given its a low news Monday and week, I'd be interested on your thoughts regarding the economy now that the gas price is 555p/therm - up nearly £1 in an hour following Putin's announcement on Friday evening on the Nord Stream 1 pipeline. Price cap extrapolated for this has roughly increased by c£1k in the last hour! Impact on the UK consumer and small-caps will obviously be enormous if action is not taken by the UK government. https://tradingeconomics.com/c...
the key moment in all of this was 2010? japan earthquake and the nuclear power station issue put germany of going to nuclear power and others?
On the topic of highlighting significant insider purchases of shares:
Ten days ago, the wife (I think) of the CEO of River & Mercantile, now part of Assetco (LON:ASTO) has bought a couple of pennies shy of £350k of shares in £ASTO.
Now I'm assuming the CEO of R&M and family are not short of money, but that's still a decent chunk of change that they didn't have to spend.
Love the podcasts by the way Paul, you're a natural content creator :)
Chris.
How badly will the Felixstowe port strike impact supply chains again? Read an article over the weekend saying port handles a lot of furniture, computers and auto parts shipment.
How badly will the Felixstowe port strike impact supply chains again? Read an article over the weekend saying port handles a lot of furniture, computers and auto parts shipments.
And is this the start of an autumn of strikes? First Felixstowe port. Then maybe truck drivers. Maybe rail again.
Most exciting small cap investing news is your return to twitter Paul!
Who's with me?
I think Twitter is a waste of time and energy. Enlighten me - what is the point of posting on twitter?
It is the thief of time.
Dopamine and reach and who doesn't enjoy a good rant. More I rant on Twitter, less at my wife - immeasurable benefit right there and she isn't even posting on Twitter
Depending on who you follow and you need to be selective there are a fair few savvy private investors on Twitter. So it can be a good place for investment ideas but as always one needs to do the research before investing.
In general yes it is a waste of time (says somebody who joined in 2012 and has tweet 12,500 times!!) but if you:
- are selective in who you follow (@vitaliyk @greenbackd @rationalwalk to name three)
- use mute and block ruthlessly
- don’t follow too many people
Then I think it can be a positive. Investing is IMO a lonely business and it helps to be part of a community.
Regards
Michael
Paul's return to Twitter doesn't affect me because I was banned permanently during the lockdowns. All I did was "like" and "re-tweet" the "wrong" people, but at least I didn't end up in the clink for 34 years like poor Salma al-Shehab. I can't be bothered to work around the ban with VPNs and suchlike, so I now ignore Twitter completely.
Another great podcast - thanks
That movie would be called 'Cineferno'. Rated 18, (Features Horror, Threat, Danger, Emotional Distress)
That movie would be called 'Cineferno'. Rated 18, (Features Horror, Threat, Danger, Emotional Distress)