Small Cap Value Report (Thu 30 Dec 2021) - CRL

30th Dec '21 by Paul Scott

49 comments 7927 reads

Good morning, it's Paul here with the SCVR for New Year's Eve eve.

I'm not sure if there will be much news today, but as for yesterday, here is a placeholder for reader comments.

Agenda - just the one company reporting today -

Creightons (LON:CRL) - interim results. Tough prior year comparatives, due to the (previously flagged) one-off sales last year from pandemic-related products. Operating profit down about 14%. I flag up a couple of points of concern, re excessive share options, and negative cashflow. Overall, it looks a decent business, and maybe priced about right for now. Worth considering perhaps?

Also,

Parsley Box (LON:MEAL) - my mystery shopping experience is now concluded, you may be relieved to hear, with all the product consumed. My conclusion is that product quality is too variable, and the target niche looks too small. Shares remain uninvestable, due to it being close to running out of cash. Big dilution (or insolvency) look likely. Hence uninvestable until it's raised more cash.

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.

Parsley Box (LON:MEAL) mystery shopper - I've finished off all my remaining product from Parsley Box (LON:MEAL) and the last few were OK. So I think it's clear that MEAL has a real problem with variable product quality. Some items are OK quality (e.g. salmon & asaparagus, sweet & sour chicken, fish pie, toffee cake,…

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Albertos

30th Dec '21

Beximco Pharmaceuticals (LON:BXP)

On a quiet day announced @ 1 hour ago that it is producing a generic version of Pfizer's COVID-19 treatment Paxlovid (nirmatrelvir and ritonavir tablets, co-packaged for oral use).

https://www.investegate.co.uk/...

Quite an interesting, if illiquid share.

Phil

(I hold)

davidjhill

on a very quiet day an interesting little green hydrogen play called Atome Energy (LON:ATOM) came to market this morning, fortunately without much hype and fanfare. It spun out of Peter Levines President Energy (LON:PPC) vehicle (he is of Imperial Energy fame where he built a $2.4bn business, so he has decent pedigree).

Has a couple of very interesting projects signed - cash + standby facility of £9m so no funds needed ahead of FID and a market cap of circa £25m so not expensive by green hydrogen play standards either.

Could be an interesting one to follow.

Gostevie

I think it's important to support the hospitality sector as much as we can at the moment...

The sacrifices you make for Queen and country are truly heroic Paul! :-)

sharw

On a quiet day and being on the eve of the eve of the closure of the Stocko Challenge I've had a peek at the current scores.

The top 10 have all made it on just one of their five picks being a multibagger. The companies involved were:

1 Brightcom National SE India

2 Sawaca Business Machines Bombay SE

3 Lake Resources Nl Aus SE

4 Gstechnologies LSE

5 Province Resources Aus SE

6 Province Resources Aus SE

7 Sayona Mining Aus SE

8 Aurum Proptech National SE India

9 Athabasca Oil Toronto SE

10 Zephyr Energy LSE

So how did we, the fallible subscribers to Stocko perform? Not very well, I'm afraid - down 21% on the top 5 subscriber picks. With rough % change at time of writing these were:

Boohoo (LON:BOO) -65.0%

Sylvania Platinum (LON:SLP) +1.7%

Saga (LON:SAGA) +5.7%

Volex (LON:VLX) +12.5%

4d Pharma (LON:DDDD) -59.1%

ridavies

Good morning all. I enjoyed Paul's Christmas Eve review.

I am not a regular visitor to Trust Pilot but thought that I would have a look at the ratings for a number of companies, given his mention of poor reviews for Joules (LON:JOUL) especially recently.

As a holder and a big loser after the 30% hit on the day of the last market report, I am particularly sensitive to what happens next for Joules (LON:JOUL) and I didn't like Paul's comment about the possibility of a further profit warning one little bit! Why hold on to a share with a second profit warning looming? I did a bit more digging on Trust Pilot.

My choice of companies on Trust Pilot may not have been the best, but these are my findings for better or worse. Before I give the figures, I think there are a few special factors at work here right now.

First, customers are particularly sensitive around Christmas. Deliveries = presents = special meals, and so immediacy is particularly important.

Secondly, customer sensitivity is probably heightened too, so customer service - or lack of it! - becomes increasingly important too. (I am in that category. I can readily forgive a fault if it is put right quickly and I am treated promptly, fairly and courteously)

Thirdly, Covid 19 levels are really affecting staffing, and distribution issues which have been covered in depth for weeks/months now are having big effects - all when the seasonal volumes of business are at their height.

Here are my figures

Total Reviews Excellent/Good % Bad/Terrible %

Joules 5,851 74/9 2/13

Next 5,339 18/5 8/66

M&S 6,095 20/4 9/63

ASOS 138,103 67/5 2/24

Boohoo 177,663 63/14 6/11

Amazon 20,291 36/8 6/46

Make of those what you will. Some were a bit surprising to me. Given the time of year, and reading the most recent comments, all were likely to be worse than normal and heavily polarized. The only significant differentiator seemed to be, and especially frequent with Boohoo, if the customer spoke to someone personally then the matter was usually dealt with to the customer's satisfaction, and much appreciated.

For Joules vs Next vs M&S, probably the most similar companies, Joules doesn't look so bad in comparison. However, it will be their absolute figures which will be affecting their business so in the end the comparisons are probably not very meaningful. for Joules.

FuzzyHaha

The psychology of investing is fascinating. My view tends to be for the long term 3-5 years. I.e I have a sort of price target in mind, and there's enough uplift in that target for the end result to be a number of years away.

Many commentators promote the idea of cutting your losses quickly, which I can't argue with, but just doesn't sit right with me.

So the way I view my holdings is bit like buying a property to do up. You buy it and know it will achieve an end value BUT you're going through some pain in the mean time.

It sort of works as a philosophy. Clearly if something turns into a pile of poo, then it must be flushed away. But I'm generally waiting till those projects flourish

mojomogoz

The money hasn't been made in UK stocks it seems. I've been slowly slipping back and now at position 70. Doesn't look like I'll get a romantic weekend with Stocko in NY this time...so next year I'll need to spiv up the picks even more (though I do hold all the stocks I put in so not just random)

https://www.stockopedia.com/ch...

I do want a stewards inquiry though as Plateau Energy Metals was acquired by American Lithium mid May and LI is up 1.25% from that point....so I make that a c.400% return for Plateau/LI and I get a return of c.145% for the ytd and maybe into the top20! ;)

Obvs I just need a moonshot 2 days for uranium stocks to take me higher...though the volatility could easily slip out of the top100 before the year is over!

PS plus I have in the money warrants on LI...which add a nice bit more...but I'm not going to argue that one.

nevphillips

I haven't really followed the challenge for last few months, as I'd seen lots of folks with multi-baggers, which I hadn't invested in, and most of my stocks I knew had faded in the last quarter. So I have to say I am very pleasantly surprised to see I have made it into the top 100 (at #100 admittedly) .

£IPX is my biggest personal holding after I sold out of Jubilee Metals (LON:JLP) earlier in the year for a very tidy profit (albeit it was a bit of a forced sale). Impax Asset Management (LON:IPX) has doubled over the year as it has done for past few years, so very happy with that pick and I think 2022 will be equally good as the ESG trend continues strongly.

Caduceus

Mind if I ask how's your buy price calculated buddy?

Boon

This is why, one of my strongest anti-buy signals is when the Stocko community rating on a share goes >35%. It signals that the trade is too crowded; and the price is likely to be up with events already, if a lot of people think it's a good buy and have bought recently.

I do wish Stockopedia will have a new feature, showing the top buys, sells, watchlists (as per Stocko portfolios) to see what's popular in the community. Like how Hargreaves, Robinhood, etc have their top traded lists...

Trustpilot reviews have to be taken with a pinch of salt, as many companies game the system. You have to dig into whether the company is proactively asking for reviews, and how they are doing it too.

Tortoise investor

If you mean when I buy a share I include the cost in the calculation. If you mean what share price I use at the year end for those I still own: I use the price on Google which for smaller shares might be the buy rather than the sell price - but this year the difference between those at year end was only about half a percent for my portfolio overall.

GN100

Wow! I hold the first four but I had totally forgotten about the Stocko Challenge. Obviously, Boohoo (LON:BOO) currently makes a big dent in my figures.

stockdave

With regard to Meal, I was concerned about MDs role in Orbital see year 2000. No idea which funds bought in at 200p.

I do not do shorts but I would have shorted this.

Not happy at the moment about

Botb

Boo

PHD

and of course my market timing.

But seriously considering giving up on AIM and just moving into Its.

Can anyone let us know who invested in meal at 200p?

many thanks

turbo

To answer your question stockdave, yes I did purchase Parsley Box (LON:MEAL) in the IPO, but luckily sold very early on @ £2.0035!

Well, you are currently 661 out of 3285 so that's better than most of us:

SaarfLondon

Agree ,not only Stocko but all heavily promoted stocks on various platforms.Early 2021 I counted 4D Pharma to be the most favoured by PI's on Twitter . My best performing stocks rarely appear in print anywhere.I never thought Stocko would end up being a great source for stocks to short !!

yiannos1

31st Dec '21

Good research, well done.

Perky

Is there no competition for 2022??

Small Cap Value Report (Thu 30 Dec 2021) - CRL

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Paul Scott

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