Small Cap Value Report (Mon 6 Mar 2023) - WAND, CPI, SEE, FOXT, CRW, CKN

6th Mar '23 by Paul Scott

61 comments 8313 reads

Good morning from Paul & Graham!

Weekend podcast - went up on Sunday. I was pleased with this one, some interesting stuff in it, even if I say so myself! See Friday's SCVR here for the mystery shares (3 of them last week). I'll also add a reader comment below to list the mystery shares (my best ideas from the week).

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:

WANdisco (LON:WAND) (Paul holds)

1318p (pre market open)

Market cap £911m

Response to press speculation

This is self-explanatory -

As a dual UK and US headquartered technology company, WANdisco has long-stated its intention to consider an additional listing of its ordinary shares in the United States. The company can confirm that it is in the early stages of proactively exploring this option.

The Company also confirms that it remains committed to London's Alternative Investment Market ("AIM") and to maintaining its current UK AIM listing.

My opinion - I met management last week, with the overall picture being the same as my previous comments here on the company. The story is that it’s won a series of big contracts (which take time to convert into revenue) over the last c.9 months. WAND has special software for handling & moving large amounts of data, and it claims to be the only software capable…

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cheeky_minnows

6th Mar '23

As a novice investor, I wonder whether wiser heads here can help me ?

I sold my holding in Craneware (LON:CRW) this afternoon (at pretty much breakeven, so this is a learning exercise for me, more than anything else).

The results today state that their H1 23 profit before tax is $5.2m(as opposed to $6.2 H1 22), so the outlook for the full year one would expect to be slightly less net profit than last year $9.41m.

The interim statement claims 'we are confident in delivering results for the year in line with consensus and look to the future with confidence'

The current consensus for me is the 86.3c EPS and $30.7m net profit - does this mean that they intend to make 5x the profits in H2 than they made in H1 ? In my calculations the current PE should be about 70x assuming that they do about as well as last year..

What am I getting wrong ? !

bryaz

just gone through exactly the same with santander there excuse was i was drawing the same amount every month to pay a bill it was my wages!!!!!!!!!!!!!

Roger Baron

Coral Products (LON:CRU) I have held for many years. Anyone know why such large trading volume today? 4 mil shares traded. There's only been one month in last 12 that the Monthly volume has been over 4 mil!

Westway001

Tipped today by Simon Thompson in Investors Chronicle

Thanks Westway001

The Boon Fund

I've also been thinking of this "volatility" in the markets recently, where it looks like we do have wild swings in prices. I wrote about it more in my Feb commentary yesterday.

My thinking is that to mitigate being "unlucky" with your buy or sell pricing, the way to do it would be to break down your buys and sells to take place over multiple days. This also gets over the problem of low liquidity, by tapping multiple days.

Big investors do this all the time when buying or selling big chunks; but it looks like we might need to start doing this too, as smaller investors.

GavSmith01

Paul,

I have moved two chunks of SIPP to HL, including one a couple of weeks ago. One transfer took two weeks, one transfer took one week. You may find you are surprised to the upside.

If you haven’t heard back from HL within a week of submitting your transfer, chase them via secure message.

Snowbum

Interesting results out from Batm Advanced Communications (LON:BVC) today, growth prospects look excellent. Admittedly hard to get a handle on this company though as I don’t really understand all the IT jargon! Partnerships and contract wins look encouraging. Worth a look at current price imo (I hold).

peterg

The only thing stopping me transferring out of Barclays is the time it takes. I joined Charles Schwab decades ago, who were great, but sold out to Barclays Stockbrokers, who were OK, but then the transfer to "Smart" Investor has increaed charges and lowered service. Someone finally rang about a complaint I made months ago the other day and effecively admited that the whole system was based around Barclays Bank Acc holders and those of us who bank elsewhere are effectively 2nd class citizens. Not sure where I'd go. II are fine, but I already have an account there, so I'd want to go somewhere else.

yiannos1

Terrible results from BATM Advanced Communications burning about $25m. I think there is also a criminal investigation involving one of its subsidiaries in Italy.

Thanks for your response yiannos1. R&D spend it looked like, which does seem to be a theme. Although the balance sheet was reported as strong and revenue growth looked pretty good, but admittedly, I’m no accountant.

This was a recent entry for me with trade plan defined, so will wait and see what happens. Do you have a link to the Italy story?

Paul Scott

Thanks GavSmith!

I'll report back once my SIPP has transferred to HL. Hopefully my experience might mirror yours, of only 1-2 weeks, I'd be very pleased if that is the case. Although I suppose it depends on the counter-party.

Regards, Paul.

The Jayman

My experience of HL and their efficiency and customer experience has always been very positive.

Their transaction charges are lower than you suggested earlier as they fall with only modest transaction levels.

The only downside is that sometimes - in volatile market conditions and particularly for smaller cap stocks - it can be hard to transact, even to buy.

Tommy H

Thank you Roger and Westway001, just looking today and seeing it had a big rise and big volume, obviously here is me looking at 21:18 so not a lot I can do, but nice to see it bounce back...

As always should have bought more a while back :)

Tommy

ps. I hold Coral Products (LON:CRU)

abtan

Hi Jayman

"The only downside is that sometimes - in volatile market conditions and particularly for smaller cap stocks - it can be hard to transact, even to buy."

I've found the same issue when using the HL website on my laptop, however, even in the most volatile times, I'm able to continue trading on their (Android) app.

I am afraid I do not have a link but I do remember that it involved Adaltis , its subsidiary in Italy.

BATM is one of those companies that borrow money every year , but at the same time claim that they have 3 times that amount as cash in their balance sheet. Maybe they do , but it is always a red flag for me.

Good luck though.

garbetklb

Hi Roger

II SIPP - I've had one since Alliance Trust were taken over by them. Pretty good - altough the recent "upgrade" of their site is far from that. It's become (laptop / Chrome) clunky with needless clicking needed.

It seems pretty cheap & there are quick replies to messages sent. And it's possible to speak to a human!

I recently went through probate for mum - Iweb were much slicker & responsive than II.

Overall though, I'm happy & see no reason to move. However, it's fairly early days as part of abrdn...........

Hope this helps

Andy

Damien McCaffrey

All this was prompted by FCA's fine of ever £100 million on Santander in December.

Did they want you to provide any documents ?

Question is what information can a bank legitimately ask of its customers

7th Mar '23

Hi abtan,

Interesting. I've been on their app for about a year and found it an excellent tool and soooo convenient but its doesn't quite have all the functionality of the website.

Not sure about "market access/execution" issues. Certainly in volatile conditions for small caps there have been issues and not just the 2nd/3rd weeks of March 2020, as an extreme example. I'm sure they would have, even then, have been trading in FTSE250 stock just fine, but the community interest here is in the much smaller caps.

I'm defo paying only about £9 per trade which makes even small, incremental purchases/sales (say only £1.5k) economic.

Helpful to get others' perspectives of the respective offerings of all of the competing platforms.

The idea of paying commission of hundreds of pounds as Paul was suggesting is ludicrous.

Regards

Tombholliday

9th Mar '23

Well sniffed

Small Cap Value Report (Mon 6 Mar 2023) - WAND, CPI, SEE, FOXT, CRW, CKN

Paul’s Section:

WANdisco (LON:WAND) (Paul holds)

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Paul Scott

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