Small Cap Value Report (Mon 26 Mar 2018) - TAP, BVXP, SAL, SAT, YOU, PURP

Monday, Mar 26 2018 by
62

Good morning!

The following stocks are on my radar today (edited @ 14:30):



Taptica International (LON:TAP)

  • Share price: 380p (+1%)
  • No. of shares: 67.6 million
  • Market cap: £257 million

Full Year Results

This is a mobile advertising platform based in Israel but with offices around the world.

Facebook

I've just been reminding myself about what it does, looking at the case studies on their website. For example, this one (PDF file) explains how Taptica improved a US company's success in recruiting new users to download an app via Facebook.

Taptica is described as the customer's "Facebook Marketing Partner", and used its custom-built, "Facebook-optimised" platform to run the ad campaign. The Taptica platform was supposed to be a lot smarter than the default Facebook ad manager at the time.

Facebook has been on the receiving end of huge negative press and seen its share price take a tumble as users realise how much data the company has about them.

Its long-term dominance as a social network is certainly questionable, and my guess is that it will be inconvenient for Taptica if Facebook's influence begins to fade away. Facebook is probably one of its biggest venues, since its one of the most heavily-used mobile apps, so there might be a little bit of friction if its app usage suffers and people start using something else.

But Taptica seems be diversified among many advertising venues, mentioning Amazon, Disney, Twitter, Expedia, etc. on its website. 

In any case, the uproar over how Facebook apps have used people's data is not directly relevant to Taptica. It says today that recent press coverage "does not affect its business model".

Results

Today's results show massive growth rates. We need to be careful about this, as there were some acquisitions during the year.

"Non-video" revenue growth is 35% - I think this is a bit closer to like-for-like growth, as there was a big video acquisition during the year. Clearly…

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Disclaimer:  

All my own views. I am not regulated by the FSA. No advice.

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Taptica International Ltd offers data-focused marketing solutions that drive execution and brand insight in mobile, leveraging video, native, and display to reach the users for every application, service, and brand. The Company’s technology is based on artificial intelligence and machine learning at big data scale. The Company works with more than 450 advertisers, including Amazon, Disney, Facebook, Twitter, OpenTable, Expedia, and Zynga, and more than 50,000 supply and publishing partners worldwide. more »

LSE Price
320.6p
Change
-1.4%
Mkt Cap (£m)
220.8
P/E (fwd)
8.3
Yield (fwd)
1.7

Bioventix PLC is a United Kingdom-based biotechnology company. The principal activity of the Company is the development and supply of antibodies. The Company specializes in the development of sheep monoclonal antibodies (SMAs) for use in immunodiagnostics focusing on the areas of clinical diagnostics and drugs of abuse testing. The Company's non-vitamin D business consists of antibodies, NT proBNP (heart failure), testosterone, Free Triiodothyronine (FT3) (thyroid hormone), estradiol, and various drugs, such as tetrahydrocannabinol (THC)/cannabis, and progesterone. The Company offers products for indications, such as thyroid, fertility, oncology, cardiac, vitamin D, drug of abuse, infectious disease and miscellaneous. Its sheep hybridoma technology produces cell lines that secrete SMAs. The Company offers a panel of SMAs to 25-OH D and has various 25-OH D2 and 25-OH D3 specific antibodies. It sells its products through direct sales and through distributors. more »

LSE Price
2800p
Change
 
Mkt Cap (£m)
143.9
P/E (fwd)
24.0
Yield (fwd)
2.8

SpaceandPeople plc is a United Kingdom-based media specialist company. The Company is engaged in marketing and selling of promotional and retail licensing space on behalf of shopping centers and other venues throughout the United Kingdom, Germany, France and India. The Company's segments include Promotional Sales, Retail, Head Office and Other. The Company markets, sells and administers promotional space in a range of footfall venues across the United Kingdom, including shopping centers, theme parks, garden centers, retail parks and airports. The Company offers a service covering from consultancy services to the provision and management of retail merchandising units in shopping centers. It enables venues to market, administer, promote and sell their promotional space. Its subsidiaries include MacPherson & Valentine Limited, SpaceandPeople GmbH, Retail Profile Holdings Limited, POP Retail Limited, Retail Profile GmbH, SpaceandPeople India Pvt Limited and S&P+ Limited. more »

LSE Price
20.5p
Change
 
Mkt Cap (£m)
4.0
P/E (fwd)
5.3
Yield (fwd)
7.5



  Is LON:TAP fundamentally strong or weak? Find out More »


53 Comments on this Article show/hide all

tony777x 26th Mar 34 of 53
1

In reply to post #345418

Hi Ricky, I am also a Minervini trader. You are right in as much this is not a Minervini stock and 98% of the time I would not touch it. I have seen this pattern with other stocks before and you need to watch it like a hawk. I am a trader and not an investor and decided to buy into as there was a lot of support crucially with volume on Friday and the same seemed to be happening again. I bought at 3.65 and have since sold 90% of the holding at an average of 3.71 Not too sure if it was worth the stress though. Will keep a very small amount to see if the dust settles in the next few days. If not will sell. Like Minervini for me the most important thing is to watch the market closely and no to let losses accumulate or start by taking small profits and or breaking even in volatile stocks. Best to be able to fight another day. For what its worth I hold Sopheon a more classic Minervini stock which I increased my holding this morning.

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Graham Neary 26th Mar 35 of 53
1

In reply to post #345133

Thanks Gus - am taking a look at Spaceandpeople (LON:SAL) and Satellite Solutions Worldwide (LON:SAT) now. G

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purpleski 26th Mar 36 of 53

In reply to post #345183

Hi

On Bioventix (LON:BVXP) can you post a link to your forecast EPS of 85.9p? I suspect that this figure is for the full year and the 54p in their RNS this morning is for the half year against 38.67p for the same period last year.

So Bioventix (LON:BVXP) continue to perform well and as post elsewhere here there very conservative forecasting in the past makes me confident that they will deliver for the year end generally and on the Troponin project. Further their comment:

“The majority of our scientific resource remains focused on our research projects and we are encouraged by the steady progress made in existing projects and the identification of exciting new projects for the future. We will comment in more detail on these activities in our next report.”

makes me optimistic for the longer term.

Bioventix (LON:BVXP) is my fourth largest holding at 9.5% of my portfolio and I think that in light of the 24% decline since October high I am tempted to top up here.

I would also welcome Graham’s comments, particularly if he thinks the bulls like me have missed something!!

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herbie47 26th Mar 37 of 53

Bioventix (LON:BVXP), the outlook is far more upbeat than at last year's results, so that is a good sign.
It should be pointed out to non investors that Bioventix (LON:BVXP) is very illiquid and the spread at times can be close to 10%. I should have topped up Friday, c'est la vie.

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mammyoko 26th Mar 38 of 53

Lovely comments on Bioventix (LON:BVXP) Graham. I think there is potential for more pleasant surprises whether from troponin or China. So this may head back towards its highs subject, of course, to any adverse market conditions.

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TQ12 26th Mar 39 of 53

In reply to post #345348

SR means ?

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gsbmba99 26th Mar 40 of 53
4

A few thoughts on Bioventix (LON:BVXP) . A rather key question is whether the unanticipated prior year revenue bonus is relating to a continuing revenue earner or not (eg the expired portion of NTproBNP). It has to be a very material product for a very material customer if it's worth £250k/annum. It also means that prior year revenues were off by up to mid to high single digit percentages for the company as a whole. It's also at least the second time that a customer has found a material error or understatement of royalties. From the full year 6/14 results: "There is an exceptional revenue item of £190k which resulted from an internal audit at one of our licensees that revealed a product code on which back-royalties were owed for preceding years." I believe that Bioventix have the right to audit customers. I can understand why it might be problematic to exercise that right but maybe it ought to be routine.

Expectations for VitD were tempered by comments at full year results: "Our prudent belief is that the vitamin D market will plateau in the near future." In these H1 results: "Vitamin D antibody sales continued at the healthy levels seen in the prior six months and were approximately £0.4 million above the levels in the comparable period." If there was no sequential growth, does that mean the "plateau" has been reached?

"Growth in other antibody sales (progesterone, drug antibodies, contract NT-proBNP) also amounted to around £0.4 million." Eyeballing the full year results presentation, full year revenues for NTproBNP (contract) (about £550k, +10%), drug antibodies (about £490k, +50%) and progesterone (about £200k, +51%). If the +£0.4m increase in a six month period is related only to those 3, then it seems to be an exceptionally good rate of growth.

On troponin: "In October 2017, we conveyed our expectation that the commercial development of this exciting new product would not gear up until calendar year 2018 and this expectation has been manifest in the reporting period. We remain confident that sales will build during 2018, though our detailed understanding is limited by a six-monthly information feed through the royalty reporting mechanism." I'm hoping this means that they have received a reconciliation from Siemens that has monthly royalties due so that they can see that the December monthly run rate vastly higher than July but may be wishful thinking on my part.

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Gromley 26th Mar 41 of 53

In reply to post #345498

TQ12 - SR I believe refers to stockopedia's StockRank measure.

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Graham Neary 26th Mar 42 of 53

In reply to post #345493

You're welcome, mammyoko.

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ricky65 26th Mar 43 of 53

In reply to post #345463

Hi Tony,

Ultimately, everyone makes a decision on how to trade/invest. For the last few years all I've done is buy Minervini stocks because I noticed that when I made exceptions I lost.

As I mentioned before, I don't like the look of Taptica International (LON:TAP) at the moment so I was hardly surprised to see it close -4% today. IMO it's looked poor, especially since closing below the 200 MA on 20th March. Like Minervini, I don't like holding shares through results unless I have a good profit cushion as you always trust a bit to luck on results.

Agreed that Sopheon (LON:SPE) is a Minervini stock.

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gus 1065 26th Mar 44 of 53
2

In reply to post #345468

Hi Graham.

Thanks for including Spaceandpeople (LON:SAL) and Satellite Solutions Worldwide (LON:SAT) in today’s write ups. Have been in both for a while in small size - generally both have seen more “downs” than “ups” but both interesting plays in their respective niches. One thing on Satellite Solutions Worldwide (LON:SAT) I meant to mention is that occasional small cap predator Harwood Capital have built up a 17% stake in the company in the recent past which could lead to a (low premium) bid in due course.

Gus.

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tony777x 26th Mar 45 of 53

In reply to post #345578

agreed Taptica International (LON:TAP) now not looking good on the technicals and will have to watch closely in next day or so. Will look to put a tight stop loss on remainder as do not like it below 200ma. As the fundamentals do not look bad I am hoping it does a Computacenter (LON:CCC)

I am not going to let it off the leash for long and will choke the trade if necessary.
I do not know what you think but at the moment in the UK market it is hard to find breakouts that succeed and so I am mostly cashed out. The UK market at the moment seems to have a neurotic investing psyche. If its not Brexit which it gets nervous about its then the trade wars. At this rate I am surprised that the clocks going forwards has not caused a crash.

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ricky65 26th Mar 46 of 53
1

In reply to post #345618

Sounds like a good strategy. I think first priority should always be to manage risk. It could well bounce back like Computacenter (LON:CCC).

It's been a tough period for the market and I'm seeing less breakout opportunities. My most recent breakout buys are Equiniti (LON:EQN) and Ibstock (LON:IBST). Both have pulled back but have not hit my stops so I continue to hold. Gresham Technologies (LON:GHT) and Everyman Media (LON:EMAN) are a couple of bases I'm keeping an eye on.

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INVESTOR53 26th Mar 47 of 53

In reply to post #345618

Thanks for that punchline tony777x. It made me laugh on what was otherwise, for me, a depressing day.

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tony777x 26th Mar 48 of 53
2

In reply to post #345638

Thank you for your comments. As we both use similar Minervini trading techniques I will message you with any potential stocks I see and maybe we can exchange opinions if you like.

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tony777x 26th Mar 49 of 53
1

In reply to post #345643

problem is about a month ago I used to drink a cup of coffee a day. Now I am a veritable coffee junkie

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tony777x 26th Mar 50 of 53
1

In reply to post #345638

Ricky, It might be a good day tomorrow(hopefully) as US markets were strong today with buying volume coming in right to the end. I will be looking at UK futures for signs of bullish sentiment(fingers crossed)

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ricky65 26th Mar 51 of 53

In reply to post #345678

Sure. I'm on Twitter @TacticianTrader where I post Minervini breakouts.

You're right about the US markets being strong today, one of the strongest days I've seen! Hopefully bodes well for tomorrow as you said. I'm guessing it will gap up at the open.

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matylda 27th Mar 52 of 53
1

Graham,

Thanks again for a great report.

I am not sure of your residential status, nor do I wish to know - However, UK based clients with a Spread Bet account can short Purplebricks (LON:PURP). I certainly can with IG Index. If memory serves me correctly those resident in Ireland can also open an account with IG Index for Spread betting purposes, I am sure my friend in Dublin did so not so long back - Not able to contact him this morning.

Might help when the conventional process via your broker is not available.

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VegPatch 27th Mar 53 of 53
1

In reply to post #345503

Great analysis GSBMBA99

FWIW I think the underlying growth rate of 13% includes a currency headwind of at least 3%. I get this because the 2015 R&A broke out the revenues by region and showed 43% in USD and 40% in EUR. EUR has strengthened about 3% Feb 18 on Feb 17 (use the monthly average for Feb for H1 and Aug for H2 as this is when BVXP normally gets paid by customers in a bullet payment for the period and converts it at the prevailing rate). USD has weakened by c12%. So net net that's roughly a 3% drag on sales. It makes the revenue growth of c16% more impressive as the NT Pro BNP took c 12% off sales in the half.

Re customer audits, I was discussing this with a business owner yesterday who sells data to clients. He said it was a routine practice to "seed" data sets with an immaterial error or two. He tells the client the data has a couple of "seeds" in it. The seeds then identify when the data has been used and the data owner can cross reference what they know about the clients use of that data with what the client says they have used. If the two don't roughly correlate a conversation ensues. He said one or two clients often "forgot" to pay for all the data they had used. Maybe it's time for BVXP to think about the next level of antibody compliance or auditing ?

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About Graham Neary

Graham Neary

Full-time investor and independent analyst. Prior to this, I spent seven years in the financial markets as an analyst and institutional fund manager. I'm CFA-qualified, also holding the Investment Management Certificate and the STA Diploma in Technical Analysis.Away from finance, my main interests are recreational poker and everything to do with China, especially Mandarin Chinese. more »

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