Small Cap Value Report (Tue 12 Jan 2021) - Dr Martens, APP, ACRL, SAG

12th Jan '21 by Paul Scott

192 comments 13720 reads

Good morning, it's Paul here with the SCVR for Tuesday.

Thank you to everyone involved in Mello Monday investor webinar last night. The numbers are steadily growing, not far off 500 investors attended last night, a new record. The highlights for me were veteran fund manager from Schroders, Andy Brough, who is always a terrific speaker, full of insights and often very amusing anecdotes! Also, Stephen Clapham continues to impress, with interesting perspectives. I must read his new book, The Smart Money Method. Has anyone here read it? Views please!

Our own Jack gave a good review of Foxtons (LON:FOXT) (I hold) which is an interesting share. I think a lot of people are coming round to the view that the work from home (WFH) trend could gradually reverse. Anecdotally, I'm hearing that the novelty, even joy, of being at home with their children all the time, has worn rather thin with many city workers, who can't wait to get back into the office & bars/restaurants, once normality returns later this year (April/May roughly, is looking likely, given good progress with vaccine roll out).

I almost forgot, of course the boss's review of 2021 Share competition picks was interesting too. A lot of subscribers here clearly share my conviction for Boohoo (LON:BOO) , Saga (LON:SAGA) , and Volex (LON:VLX) - three of my five largest personal holdings, which are at the top of the list of shares picked by subscribers in this year's competition. Let's hope we're right, otherwise I'll have to keep a low profile at investor conferences later in the year lol! However, if those shares do well, I'll be able to excitedly hold court in the bar again, without buying a single pint all day, and repeat my previous performance of accidentally spraying fragments of salt & vinegar crisps over my adoring fans (sorry about that again Peter!).

Timings - an all-day job today, to catch up with a backlog from yesterday. Today's report is now finished.

Agenda -

Dr Martens - intention to float, for this well-known brand of boots.

Appreciate (LON:APP) - Trading update

Accrol Group (LON:ACRL) - Half year results

Science (LON:SAG) - Trading, business, and board update from yesterday

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Gromley

12th Jan '21

I'm certainly not an expert - probably not on anything likely to be discussed around these parts and definitively not on Virology.

However on the subject of Asia - I did read a "study" early on suggesting that Japanese subjects appeared to show a "T cell response" to the virus much earlier than expected and in advance of the antibody response.

The suggestion was that they had some degree of "immunity" due to earlier exposure to similar viruses in past years.

I haven't seen any more on this recently , so it might have been just another Covid tale, but it did have a ring of credibility about it - In my numpty opinion.

mojomogoz

As Gromley says I probably didn’t - erroneous self diagnosis...however if I had it twice it was pretty mild both times...only temporarily acute first time when I thought was over it and decided to chase whatever bug out with a bit of circuit training...then I had about 2 hrs of thinking I might need hospital treatment! A sort of acute short term spiral down (and a bit of suppressed panic)...so slept instead was a bit better but ‘post viral’ like for few days.

However, seems like second time I must have had it.

Anyway, I do wonder if people have resistance other than thro antibody response and that’s partly where the Asian question comes from. Their resistance seems just too good relative to us even allowing for better procedures. It’s so virulent in Europe/US/latam even prior to new variant that it seems Asia should have had more bite than they have

At the beginning of this I looked at studies and scientific papers. I’ve given up on that. Lots of dissonance when seeking to understand the whole imo

Yup. Saw that sort of stuff. Then read stuff saying it’s mad...vice versa and etc.
Japan do seem to have performed very well without doing too much..yes they are super hygienic (regular visitor...always worried as dirty foreigner I’d trip border health screening!) but they are dense and old. Literary tightly packed

Paul Scott

13th Jan '21

Hi The skier,

You often mention buying books and have mentioned Amazon. Have you looked instead at supporting local bookshops by buying through Bookshop.org?

I've got lousy eyesight, so I tend to get most of my books on audible, or kindle (where I can enlarge the font to very big, hence comfortable to read). I can't read paperbacks at all now, as the fonts are just too small.

So that only really leaves hardback books, which have a font large enough for me to read if I go outside on a sunny day.

Therefore, Amazon (which also owns Audible as I'm sure you know) is the best bet for me, and also instant, and convenient, and stocking such a gigantic range.

I know it sounds cruel, but I don't really care if local bookshops survive or not. They're nearly all gone now anyway, because online is so much easier.

Regards, Paul.

Caper4

Two important reasons many Asian countries coped better. 1). They mostly all wore face masks when told to do so,especially in Japan,South Korea,Singapore and Taiwan. 2) Obesity is nowhere near the major problem it is in most western countries .
Of course they also had experience of coping with the earlier virus a few years ago which did not spread to western countries .

timarr

We'd better all hope that you haven't had it twice as it would knock a pretty big hole in assumptions that the vaccine is coming to the rescue..

The consensus medical expectation is that immunity will be short lived (i.e. a year or less) in common with other coronaviruses. We'll probably need annual booster jabs.

Obviously there's lots of chat around about antibodies and T-cells, mainly by people who don't know anything about them but the truth will be revealed by the data. There are studies going on at the moment to try and figure out if it recurs.

Probably the most likely to get the answers is a large study going on in the Amazon city of Manaus where CV-19 has run rife. Over 75% of the population have had it and it's being looked at as a field test of what happens when CV-19 isn't mitigated at all. If you scale those numbers up against the age specific case mortality rates in the UK / US you'd get some pretty grim looking numbers:

https://www.npr.org/sections/g...

Unsurprisingly it's also the most likely origin of the Brazilian mutation that's starting to worry people.

The other underlying concern is that Manaus is over the expected herd immunity level (about 66%) of infection but cases are stil increasing. They'll be looking for recurrances of the infection going forward - with such a high percentage of people infected any significant increase in disease rates would be an early warning of a problem.

Finally, there are questions about the data collection method in Manaus - it's certainly not perfect, but I don't think anyone disagrees that the prevelance of CV-19 in the city has been extremely high.

Appointments of new Nomad and Broker this morning seems to be proximate catalyst for Bango (LON:BGO) house cleaning update last night

JimMcLad

Hi JohnEustace,

You beat me to it – I was intending to review the video as I was sure AN mentioned the DNA / RNA scenario and stressed the Angle (LON:AGL) approach was superior. Welcome aboard – I’ve held since 2014 and periodically topped up. As of today I’m breaking even !!

peterg

I can accept that much of Asia coped and managed better. But I suspect this doesn't explain enough. Increasingly I think they may have some better developed body capability to cope with the bug. Has anyone seen good stuff on this beyond conjecture?

I think the biggest factor was probably the far eastern experience of SARS in 2002-3. The result was they were much better prepared than the rest of the world. In contrast the UK ran an exercise in dealing with a pandemic in 2016, which exposed several weaknesses, and did little or nothing about it.

JohnEustace

Of the companies I know in the liquid biopsy area, my Guardant shares are up similarly. Their market cap is now $16bn. Illumina are buying Grail for $8bn. Foundation Medicine were bought by Roche in 2018 at a $5.3bn valuation.

Angle is clearly an early stage pre real revenue tiddler by comparison and still needs to satisfy the FDA that it's superior technology works. I doubt I would have had Jim McLad's patience or foresight to hold since 2014 but I can see the attraction. If these big boys can do what they do with fragments of DNA then they must be able to do a lot more with complete cells - RNA as well as DNA.

Thornabian

SARS related T cell response linked to Covid:

https://www.nature.com/article...

John

Thank you for the kind use of ‘patience’ and ‘foresight’. I’ll accept the latter – the former was a mistake – until now. I take the view that FDA approval is almost a given as they have been working closely with Angle (LON:AGL) on what’s required in the submission as it’s a first for them as well. Bit embarrassing for them if they delay.

I got the link I posted from an ADVFN blog.

https://uk.advfn.com/stock-market/london/angle-AGL/share-chat

There are several sensible posters as well as the usual few troublemakers. There’s been a lot of mention of US companies and their fields of expertise as well as their comparatively huge valuations. The obvious hope is Angle (LON:AGL) we be rerated when US investors join in.

Thanks. I had read this sort of thing previously too

jonfieldsend

14th Jan '21

Appreciate had £33.5m in cash at 31st December and whilst the business used to have wild swings in cash when it sold Christmas hampers the cash levels should be more steady now. The cash associated with vouchers is kept in a separate trust account so the £33.5m really does belong to shareholders. With reference to redeeming vouchers they only recognise the turnover from this on multi-retailer vouchers when the vouchers are used.

Alexander Shea

17th Jan '21

for anyone interested, the FT has a feature on Permira IPOing of Dr Martens todayhttps://www.ft.com/content/aeb...

and this much more interesting comment piece from John Gapper! https://www.ft.com/content/fa9...

Thanks Thornabian - I too had missed that particular article, but had seen other speculation and theories on the subject.

For those that don't want to read the detail, my precis would be that there are reasons to be cheerful, if not absolute proof, about the longevity of the immune response.

Everyone seems to be too busy either getting depressed or maintaining that Covid-19 is a hoax that balanced and informative content gets squeezed out.

Actually that reasons to be cheerful link, royally stinks - this one is much better for anyone uninitiated.

MontanaDawn

24th Jan '21

Dear Paul,

Apologies, I'm not sure how to direct this question for your attention! I too hold Saga and I hope they make it through the other side of this.

I've been trying to work out why the Stockopedia rating is 'Value Trap' I've read a bit about what a value trap is but I'm afraid I'm not any wiser about the specifics in Saga's case about what 'the system' is seeing to generate this.

Thanks for your easy to read, enjoyable writing style.

Best wishes and keep safe,

Rusty2

Saga (LON:SAGA), value trap is to do with the Stockopedia ratings for Quality, Value and Momentum. Quality is only 24, Momentum is only 36 and Value is 61. So high value, low quality and momentum.
The last results Saga was making a large loss.

There are some articles on Stockopedia about what the terms mean, if you do a search you should find them.

Small Cap Value Report (Tue 12 Jan 2021) - Dr Martens, APP, ACRL, SAG

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Paul Scott

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