Small Cap Value Report (Thu 18 May 2017) - CHH, IND, STAF, ITQ, BMY, MTC

Thursday, May 18 2017 by
65

Good afternoon! It's Paul here.

I had another second wind in the evening last night, and added more sections to yesterday's report, which now comprises comments on;



On to today, the header above shows the companies that I'm aiming to report on today.

Obviously the backdrop this week is a bit of a market wobble in the USA yesterday, driven by political events surrounding Donald Trump's chaotic presidency. I think a stock market correction is overdue, so sometimes the market just looks for any excuse to sell off.

Personally, I've de-geared, and opened some shorts in my spread bet accounts.  However, I've not made any significant changes to my ungeared, long-term portfolio.




Churchill China (LON:CHH)

Share price: 1068p (up 1.2% today)
No. shares: 11.0m
Market cap: £117.5m

AGM Statement - covering the first 4 months of the current financial year (ending 31 Dec 2017).

This is a UK-based manufacturer of crockery, mainly for restaurants.

Today's update is short & sweet!


"I am pleased to report that we have made further progress against our objectives in the first four months of the year. We have continued to benefit from strong export demand and our new product launches have been well received.

As a result we continue to anticipate that we will meet our target performance levels for the year."


Looking at the Stockopedia graphical history (which is my shortcut for getting a handle on how any company has performed), we can see that there is a steady progression of revenues. Plus there seems to be good operational gearing, as profits & EPS have risen considerably more in % terms, than revenues;


591d84a4e331eCCH_graphs.PNG


There's also been a positive move in forecast EPS in the last 12 months, which is another thing I like to see. Companies which are seeing earnings upgrades are usually on a roll, so…

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Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested. ?>


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Churchill China plc is a United Kingdom-based manufacturer and distributor of tabletop products to the hospitality and retail sectors across the world. The Company's customers include pub, restaurant and hotel chains, sports and conference venues, health and education establishments, and contract caterers. The Company's segments include Hospitality and Retail. The Company primarily offers ceramic tableware. The Company also manufactures and sources product sold through Retail customers for consumer use in the home, in various markets across the world. The Company offers Churchill branded manufactured products. The Company offers various types of products, such as accessories, beverage pots, bowls and dishes, cake stands, cookware, cups, mugs, cutlery, dip pots and sauce dishes, glassware, jugs, melamine items, plate towers, plates, saucers and wooden items. Its collections include Alchemy Fine China, Churchill Super Vitrified, Art de Cuisine, Sola Cutlery and Lucaris Glassware. more »

LSE Price
1505p
Change
0.7%
Mkt Cap (£m)
165.3
P/E (fwd)
19.9
Yield (fwd)
2.2

IndigoVision Group plc is a United Kingdom-based company engaged in the design, development, manufacture and sale of networked video security systems. The Company's segments include Europe, the Middle East and Africa; North America; Latin America, and Asia Pacific. Its cameras, encoders, network video recorders and software are designed both internally and with technology partners and manufactured in Asia and Europe. The Company's end to end Internet protocol (IP) video security systems allow full motion video to be transmitted around the world, in real time, with digital quality and security, over local or other area networks, wireless links or the Internet, using market compression technology to minimize the usage of network bandwidth. Its subsidiaries include IndigoVision Limited and IndigoVision Pte Ltd, which are engaged in marketing of its products, and IndigoVision Solucoes De Seguranca Eletronica Ltda., which is engaged in product repair and warehousing, among others. more »

LSE Price
176p
Change
 
Mkt Cap (£m)
13.2
P/E (fwd)
n/a
Yield (fwd)
n/a

Staffline Group plc is a holding company, which is engaged in the provision of recruitment and outsourced human resource services to industry and services in the welfare to work arena and skills training. The Company has two segments: Staffing Services, which includes the provision of temporary staff to customers, and PeoplePlus, which includes the provision of welfare to work and other training services. Its Staffing Services focuses on providing complete labor solutions in agriculture, food processing, manufacturing, e-retail, driving and the logistics sectors. Its recruitment business operates from well over 300 locations in the United Kingdom, Eire and Poland. The Staffing brands include Staffline OnSite, based on clients' premises providing both blue and white collar, out-sourced, temporary workforces. Its Employability includes work program, prime contractor in over nine regions and sub-contracts in approximately five regions in England. more »

LSE Price
239p
Change
-2.5%
Mkt Cap (£m)
66.8
P/E (fwd)
1.9
Yield (fwd)
11.9



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


31 Comments on this Article show/hide all

simoan 18th May '17 12 of 31
1

In reply to post #185797

Yes I think it was to do with Trump, the US market was down heavily yesterday evening, so on opening I guess Somero Enterprises Inc (LON:SOM) was marked down. Ashtead (LON:AHT) which also has high exposure in the USA was another heavy faller this morning but has recovered since.

Yes, Keller (LON:KLR) also dropped 3%+ too, early doors. Somero Enterprises Inc (LON:SOM) is my largest holding so I watched the drop in real-time with morbid fascination while downing my first mug of Yorkshire Tea of the day. I was only really looking at real-time data at the open to see the reaction to Burberry (LON:BRBY) FY numbers having accumulated a fair lump of them recently. Must admit they had not been on my radar before so I'd like to thank Graham for mentioning them here and bringing them into my (to quote Terry Smith) "Investible Universe"

All the best, Si

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Funderstruck 18th May '17 13 of 31

Paul; With regard to IND , I trust you top sliced in 2007 but curious to know why you did not pull out altogether in say 2011 whilst still in profit and reinvest in a growth company , as you so often do. Just attempting to learn what successful investors do at such times. Cheers.

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Howard Adams 18th May '17 14 of 31

In reply to post #185797

Hi Herbie

Thanks for the insight about Ashtead (LON:AHT), and Si's comment #12 about Keller (LON:KLR). Both are Industrials as is Somero Enterprises Inc (LON:SOM). I note that other Industrial sector shares are also quite down today.

Maybe a Trump/US thing plus an Industrials thing in combination.

Regards
Howard

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Howard Adams 18th May '17 15 of 31

In reply to post #185811

Hi Si

See my comment #14, building on your insight about Keller (LON:KLR).

Regards
Howard

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JohnEustace 18th May '17 16 of 31

In reply to post #185769

Yes I think Trump issues. I sold Somero Enterprises Inc (LON:SOM) recently when the pound strengthened after the election announcement, which is another factor. I think it's fundamentally a very good company that was being undervalued, but the recent increases were driven by expectations of a Trump construction boom that now look less likely than his impeachment.
I never thought that Trump boom would help Somero much as I think their kit isn't so relevant for big civil infrastructure projects as opposed to high bay warehouses, but that was the reasoning being expressed here and elsewhere.

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dscollard 18th May '17 17 of 31
5

In reply to post #185839

mainly because Somero Enterprises Inc (LON:SOM) is pretty illiquid with around 81K shares traded a day, it doesn't take much selling to push that around. If you believe it was a good share last week then media hysterics on Chump's future doesn't make a damn difference. Last week's good share just got better

net-net the Houses run the US and not the POTUS, it doesn't matter if it is Chump, Pence or a Cat-in-a-Hat once both houses are dominated by republicans who are business friendly.
GPB strength may revalue the SP based on USD denominated earnings but not 10% in one morning

The reality is most likely profit taking and over anxious selling... looks like some people were buying too,

Website: runprofits.com
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Howard Adams 18th May '17 18 of 31

In reply to post #185839

John

Thanks for the comments. I also think it is a good company and looking now at the days recovering SP movement it seems the market is also comfortable with it. I guess it's a big trader doing something 8am to 8:30am not entirely related to the quality of the SP and stock.

Regards
Howard

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herbie47 18th May '17 19 of 31

In reply to post #185867

Well I think it could have an effect if Trump goes then the US spending could well change, Trump is the one who is promising all this spending on construction and infrastructure. It's a bit like if Labour win the election in June, the future for many companies will change, some may even be nationalised.

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simoan 18th May '17 20 of 31
1

In reply to post #185888

I guess it's a big trader doing something 8am to 8:30am not entirely related to the quality of the SP and stock. 

Of course it would not be the first time this has happened... I remember buying Somero Enterprises Inc (LON:SOM) at 120p or thereabouts a while back when an institution was constantly dripping shares. What a bunch of muppets!! I think there's money to be made buying good quality companies when an institution is getting out. It happened with Lavendon (LON:LVD) too. If anyone sees this happening, please let us all know as it's proved a lucrative approach to date :)

All the best, Si

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purpleski 18th May '17 21 of 31

In reply to post #185769

Hi Howard

I think others have answered your question.

I hold as well and only wish had been able to see the early trading, I would have definately bought some more if I had know they were on sale at a 10% discount. I suspect in 10 years (when Trump is long (8 years?) gone) this will have prooved to be a lovely investment.

My 6th largest holding 7.2% of folio.

Kind regards

Michael

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purpleski 18th May '17 22 of 31

In reply to post #185811

Hi Si

What do you use to watch in real time?

Thanks

Michael

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AlanJenkins2 18th May '17 23 of 31

In reply to post #185721

There's a decent [if somewhat downbeat] article on Safestyle by Richard Moore on Shareprophets.

| Link | Share | 1 reply
simoan 18th May '17 24 of 31

In reply to post #185958

Hi purpleski,

I use MoneyAM: http://www.moneyam.com/ because it meets my very limited needs for real-time prices. Registration is free. I find that generally watching prices is not helpful as I'm not a trader by nature. However, it can be interesting to watch price action of companies that have released news at the open on occasions.

All the best, Si

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purpleski 18th May '17 25 of 31

In reply to post #186028

Thanks. No I am not a trader either (13 buys/sells this year) but I think it would be good to have a source.

I will take look.

Best Michael

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AlanJenkins2 18th May '17 26 of 31

In reply to post #186021

Steve Moore - apologies.

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Paulmullley 18th May '17 27 of 31
2

Probably also worth mentioning that Indigovision don't have any R&D capitalised on the balance sheet and they had quite a lot of cash so whilst trading is erratic the balance sheet is strong. Company has historically paid dividends including a special dividend to return surplus cash to shareholders during the last 5 years

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FREng 19th May '17 28 of 31

Revolution Bars (LON:RBG) please, Paul!

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Trident 19th May '17 29 of 31
1

FREng

I would imagine Paul is reeling at the shock. Quite late in the day for Revolution Bars (LON:RBG) to say that matters which have been on the horizon for quite some time i.e min wage, apprentice levvy and business rates have affected them. Actually the rates haven't gone up yet have they?

I though re the minimum wage was countered by the argument that Revolution Bars (LON:RBG) paid above average to managers etc.

Anyway look forward to Paul's take

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rouleur1 19th May '17 30 of 31
1

In reply to post #186434

Yes, eagerly awaiting Paul's thoughts on this. As a holder, I'm tempted to buy this morning, but not sure the stomach is strong enough.

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deucetoace 23rd May '17 31 of 31

I see one of the NEDs that wouldn't recommend the ITQ offer has been voted off the board at the AGM!

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 Are LON:CHH's fundamentals sound as an investment? Find out More »



About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for Stockopedia.com on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »

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